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Tight Senate race has Wall Street focus

Oct 26, 2012 - By Jim Puzzanghera. MCT News Service

Incumbent Republican Scott Brown is challenged by Democrat Elizabeth Warren in Massacusetts for the seat long held by Ted Kennedy.

Wall Street's philosophy in one of the nation's most hotly contested Senate campaigns could be boiled down to an old proverb: The enemy of my enemy is my friend.

The financial industry has poured more than $6.2 million in contributions into the U.S. Senate race in Massachusetts between incumbent Republican Scott Brown and Democratic challenger Elizabeth Warren, who has made the fight against Wall Street greed and corruption a cornerstone of her campaign.

Nearly $9 of every $10 have gone to Brown, according to the Center for Responsive Politics.

That money has helped Brown stay competitive with Warren, a darling of liberal donors from Harvard to Hollywood, in one of the nation's most expensive Senate races. Altogether, Brown had raised about $27.5 million through last month, compared with about $36.6 million by Warren, the latest filings show.

A race originally dubbed a referendum on Wall Street has broadened into other issues. But Wall Street still has a significant stake in this neck-and-neck battle.

At first glance, Brown seems unlikely to have received more financial industry money than anyone running for Congress this fall.

After all, he was one of three Republicans to support the sweeping 2010 overhaul of financial regulations, providing the final pivotal vote that secured its passage over the strenuous lobbying of Wall Street.

Moreover, Brown refused to join nearly all his Republican Senate colleagues in blocking the confirmation of a director for the new Consumer Financial Protection Bureau. He also sided with consumer groups and retailers over banks in a high-stakes dispute over debit card fees.

Now, he's using those votes to try to gain the advantage in the election.

"I was the tie-breaking vote on Wall Street reform," Brown boasts in a campaign ad that sought to inoculate him from charges that he is too cozy with big business.

He did hold up the final passage to get some changes in the bill favored by the financial industry. So his record, in the words of one executive, is "a mixed bag."

Still, Brown has benefited greatly from being the opponent of a candidate that Wall Street loathes.

Warren, a Harvard law professor and former Obama administration aide, has been one of the industry's most outspoken critics. She's been pounding away at Wall Street in a race widely viewed as a toss-up -- and her fervor has boosted Brown's contributions from the industry.

"People like Elizabeth Warren are scary to me because she's never taken risk," said Larry McDonald, a former vice president at Lehman Brothers who left before the firm's collapse and wrote a book critical of its management. Originally from Massachusetts, he co-hosted a Brown fundraiser this summer.

McDonald said he and other industry executives back Brown because he's been helpful on some issues and is willing to work across party lines.

But, he said, "I have to admit, he's probably raised more money against Elizabeth Warren because she's such a lightning rod."

Brown spokeswoman Alleigh Marre said the senator's break with his party on financial reform shows he's "an independent thinker."

"Both Scott Brown and Elizabeth Warren accept financial industry donations, and in that respect their fundraising is the same," Marre said.

But Warren said the fundraising disparity shows the industry favors Brown.

"Scott Brown, he has some good votes," Warren told a rally of about 500 people Saturday in Beverly. "But too much of the time, he stands with the millionaires and the billionaires and the big oil companies."

Brown won a stunning upset in a 2010 special election in strongly Democratic Massachusetts to fill the seat of the late Ted Kennedy.

In his re-election campaign, Brown has stressed a bipartisan record in hopes of securing the Democratic and independent votes he needs to win in a state where registered Republicans make up just 11 percent of the electorate.

He's painted Warren, who embraced the Occupy Wall Street movement, as too extreme.

Brown is one of a disappearing breed _ a Northeastern moderate Republican. He proudly proclaims himself pro-choice. He touts his work with President Barack Obama. And he frequently votes with Democrats.

Congressional Quarterly this year ranked Brown as the second-most bipartisan Republican, voting 69.6 percent of the time with Obama. Sen. Susan Collins, R-Maine, voted with Obama 71.9 percent of the time.

Some of Brown's votes have complicated his relationship with the financial industry.

Despite his vote on financial reform, Brown has been helpful to the industry, said Ed Mills, a financial policy analyst at FBR Capital Markets.

Brown withheld his vote to get a $19 billion fee on the financial industry removed from the overhaul bill. The fee would have covered the government's cost of implementing the new regulations, but Brown argued that it would have been passed on to taxpayers.

The bill was changed so its costs were covered by an early end to the $700 billion financial industry bailout fund.

Brown also worked with some key Massachusetts Democrats to ease the effect of new regulations on so-called proprietary trading on Fidelity and trust banks, such as State Street.

"Are they 100 percent happy with him? No," Mills said of the financial industry. "But are they mostly comfortable with him? Yes."

And many in the financial industry and the broader business community are anything but comfortable with Warren.

"Senator Brown enjoys overwhelming business support both for his strong legislative record and because Ms. Warren is industry's worst nightmare _ an academic with no business experience who thinks she is smarter and more virtuous than those competing in the real world every day," said lobbyist Bruce Mehlman, a former Commerce Department official in the George W. Bush administration.

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Editor's note: Jim Puzzanghera writes for the Los Angeles Times

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