NYC House Race Boils Down to Wall Street Visions

It’s an audacious gamble, even with anti-establishment fever running high: a former hedge fund lawyer trying to unseat a nine-term congresswoman popular in her district.

As political newcomer Reshma Saujani takes on Rep. Carolyn Maloney in the Sept. 14 Democratic primary, voters will face competing visions of financial reform in an era when anger against Wall Street excesses and federal bailouts run deep.

Maloney’s liberal, activist record is almost perfectly in sync with her district. But with a compelling biography, impressive fundraising haul and handful of high-profile Democratic connections, Saujani is giving her the strongest challenge she’s faced since her first run for the House in 1992.

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Saujani, meanwhile, served as an attorney for three hedge funds, including the Fortress Investment Group, for which former Democratic presidential candidate John Edwards briefly served as an adviser. Fortress invested heavily in lenders that offered subprime mortgages–higher-priced loans for borrowers considered greater risks. The meltdown of the subprime mortgage industry in 2007 helped fuel the collapse of the housing market.

Saujani’s campaign has also raked in Wall Street cash. She has raised nearly $1.2 million so far, an impressive total for a newcomer, with $300,000 coming from the financial services industry alone. Maloney has raised more than $2.5 million for her re-election.

Financiers like Goldman Sachs president Gary Cohn have contributed to Saujani’s campaign, as have Morgan Stanley board chairman John Mack and JPMorgan CEO Jamie Dimon’s wife, Judith Dimon. Her candidacy has also drawn the support of Democratic Party leaders with strong ties to the financial industry, including Cathy Lasry, wife of billionaire hedge fund manager Marc Lasry, and Maureen White, a former Democratic National Committee finance chairwoman and wife of investment banker Steve Rattner, Obama’s former auto industry czar.

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The daughter of Indian parents who lived in Uganda until 1973, when Idi Amin’s regime forced them to flee, Saujani speaks movingly of her mother slipping out of the country with her jewelry hidden in a toothpaste tube. The family settled in Chicago as refugees, and Saujani attended the University of Illinois, Harvard and Yale Law School before moving to New York.

Saujani is unabashedly following the Obama presidential campaign model, even as the president has endorsed the incumbent. Saujani is trying to develop a multicultural coalition of new and younger voters in the district, which covers the east side of Manhattan and part of Queens.

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