The Bigot and the Banks

Pro-gay Wall Street sours on its anti­gay con­gress­man

Bloomberg Businessweek (Asia) - - CONTENTS - By Green Joshua

On Oct. 15 the lead­ing lights of the House Fi­nan­cial Ser­vices Com­mit­tee, Repub­li­can and Demo­crat, ar­rived in Bern, Switzer­land, for a gath­er­ing hosted by the U.S. Am­bas­sador to Switzer­land and Liecht­en­stein, Suzi LeVine. It was the fi­nal leg of a three-coun­try con­gres­sional del­e­ga­tion, or Codel, led by the com­mit­tee’s Repub­li­can chair­man, Jeb Hen­sar­ling of Texas, that had al­ready trav­eled through Ger­many and Eng­land. Of­fi­cially, the trip was a “fact-find­ing mis­sion” to study global bank­ing net­works and bi­lat­eral trade. In re­al­ity, it was a lux­ury Euro­pean va­ca­tion.

Codels are a cher­ished perk, one of the few still avail­able to mem­bers of Congress. Law­mak­ers bring their spouses. Staffers jockey to be in­cluded. The plush ho­tels, for­eign-dig­ni­tary treat­ment, and bi­par­ti­san bon­homie are a wel­come re­lief from Wash­ing­ton’s nor­mal tra­vails. Hen­sar­ling had mag­nan­i­mously in­vited the top-rank­ing Democrats along with his Repub­li­can sub­com­mit­tee chairs, so the mood in Bern was highly con­vivial.

At one point, LeVine gath­ered ev­ery­one for a photo. Then the politi­cians min­gled. A lit­tle while later, though, a ner­vous rip­ple spread among some in the crowd. LeVine had tweeted the photo from her of­fi­cial ac­count, @Amb­Suzi. In do­ing so, she un­wit­tingly pro­vided pho­to­graphic ev­i­dence of an awk­ward drama pre­oc­cu­py­ing mem­bers of the trav­el­ing party: the note­wor­thy ab­sence of Repub­li­can Rep­re­sen­ta­tive Scott Gar­rett of New Jersey, chair­man of the pow­er­ful Sub­com­mit­tee on Cap­i­tal Mar­kets and Govern­ment Spon­sored En­ter­prises.

Gar­rett’s com­mit­tee is vi­tal to Wall Street. “The rules of the road for han­dling money and any­thing with the SEC go through this com­mit­tee,” says Mar­cus Stan­ley, pol­icy di­rec­tor of the non­profit Amer­i­cans for Fi­nan­cial Re­form. “There’s a ton of money at stake.” In Wash­ing­ton, the com­mit­tee is known as the ATM, be­cause banks and hedge funds shower the chair­man with con­tri­bu­tions. Af­ter the Dodd-Frank fi­nan­cial law forced hedge funds to reg­is­ter with the Se­cu­ri­ties and Ex­change Com­mis­sion, Gar­rett, al­ready the re­cip­i­ent of more Wall Street money than al­most any other mem­ber of the House, got mil­lions more. The banks pay to have a voice, en­sure they’re at the ta­ble when new rules are dis­cussed, and insin­u­ate them­selves into the chair­man’s good graces.

Much of the money Gar­rett col­lects from Wall Street is sup­posed to be passed along in the form of party dues to the GOP’s cam­paign arm, where it’s used to help other can­di­dates get elected. So the com­mit­tee is also im­por­tant to Repub­li­cans be­cause it binds the party with the busi­ness com­mu­nity in a mu­tu­ally prof­itable ar­range­ment. But back in July, Gar­rett threw a wrench into this smoothly hum­ming ma­chine.

At a pri­vate cau­cus meet­ing, he got into a heated dis­pute with his col­leagues by declar­ing that he’d with­hold hun­dreds of thou­sands of dol­lars in Na­tional Repub­li­can Con­gres­sional Com­mit­tee dues to protest the party’s sup­port for gay can­di­dates. His out­burst im­me­di­ately caused a rift in the cau­cus. “I was shocked,” says Richard Ti­sei, a Mas­sachusetts busi­ness­man who was one of the can­di­dates Gar­rett ob­jected to. “The first time I ran, I was ner­vous my sex­u­al­ity would be a prob­lem. But ev­ery­one was just great. John Boehner, Paul Ryan—they went out of their way to let me know it wasn’t. Eric Can­tor pulled me aside and said, ‘You know, I’m the only Jew in the cau­cus, so I un­der­stand bet­ter than any­one how im­por­tant it is to have you down here to broaden and di­ver­sify our ranks.’ ”

Gar­rett did have his de­fend­ers in the party’s most con­ser­va­tive re­doubts. “Scott is a very de­vout Chris­tian, and he had some very strong feel­ings about it that he dis­cussed at that meet­ing,” says Rep­re­sen­ta­tive Mick Mul­vaney of South Carolina, who was present when Gar­rett made the re­marks. “It was very re­spect­ful. I think the end re­sult of the meet­ing was that Scott had men­tioned he’d come to some agree­ment that he’d still sup­port the party but in a way that didn’t cause a con­flict with his morals.”

Some of Gar­rett’s col­leagues were sim­ply up­set that he was stiff­ing the NRCC. But oth­ers un­der­stood that he was jeop­ar­diz­ing the party’s elec­toral and fi­nan­cial for­tunes: As the GOP strug­gles to widen its ap­peal, Gar­rett’s com­ments, which quickly be­came pub­lic, reaf­firmed the im­pres­sion of Repub­li­cans as stri­dently in­tol­er­ant.

Al­though both men are deeply con­ser­va­tive, staffers say Gar­rett and Hen­sar­ling fell out over the is­sue—and that Gar­rett’s ab­sence in Bern was no ac­ci­dent. Mem­bers of the del­e­ga­tion had jok­ingly taken to call­ing their group the “Lead­er­ship-mi­nus-Gar­rett Codel,” since he was the only chair­man who hadn’t come along. Now Am­bas­sador LeVine’s tweet had ad­ver­tised this to the world.

The political fall­out from Gar­rett’s re­marks pales com­pared with the an­guish it’s cre­ated in some cor­ners of Wall Street. The fi­nan­cial in­dus­try ranks among the big­gest donors to the Repub­li­can Party. But it has also been a pi­o­neer in ad­vanc­ing gay rights. Gar­rett’s re­elec­tion race presents banks and in­vestors with a fas­ci­nat­ing—and ex­cru­ci­at­ing—moral dilemma: Do they fol­low their fi­nan­cial in­ter­ests and con­tinue sup­port­ing a chair­man whose an­tireg­u­la­tory views largely jibe with their own? Or do they honor their pro­fessed com­mit­ment to LGBT equal­ity by cut­ting off that sup­port and po­ten­tially an­ger­ing a pow­er­ful in­dus­try over­seer?

For all the crit­i­cism heaped on Wall Street, the Hu­man Rights Cam­paign’s “Cor­po­rate Equal­ity In­dex” ranks bank­ing and fi­nan­cial ser­vices firms be­hind only law firms as the in­dus­try most com­mit­ted to pro­vid­ing LGBT-friendly work­places. Prom­i­nent fig­ures such as Gold­man Sachs Chief Ex­ec­u­tive Of­fi­cer Lloyd Blank­fein have made a point of pub­licly cham­pi­oning this ideal. And sup­port has been bi­par­ti­san, en­com­pass­ing ma­jor Repub­li­can donors, such as hedge fund mag­nates Daniel Loeb of Third Point and Paul Singer of El­liott Man­age­ment. “Wall Street un­der­stands this isn’t just a civil rights is­sue—it’s about be­ing able to at­tract and re­tain the best tal­ent,” says Todd Sears, a for­mer in­vest­ment banker who started Out on the Street, a group pro­mot­ing LGBT aware­ness at fi­nan­cial firms around the world.

As Bloomberg Busi­ness­week re­ported in April 2015, Singer and Loeb are found­ing mem­bers of a new pro-equal­ity group that uses busi­ness lead­ers as emis­saries to the mostly Repub­li­can leg­is­la­tures in states that lack nondis­crim­i­na­tion laws. “I bring it up in al­most ev­ery con­ver­sa­tion we have with Repub­li­cans,” Loeb told me in April. “This will be good for the coun­try and good for the Repub­li­can Party.”

Gar­rett’s close ties to the Wall Street lob­by­ists and

ex­ec­u­tives who at­tend his hear­ings and fundrais­ers led many of them to take his out­burst per­son­ally. One gay bank­ing lob­by­ist told me he got the news while driv­ing to work and was so up­set he had to pull over. While Gar­rett’s so­cial con­ser­vatism was no se­cret in Wash­ing­ton, anti­gay sen­ti­ment is rarely stated so bluntly. “Gar­rett, un­like some of the other Repub­li­cans, has em­bar­rassed them by be­ing so ex­plic­itly big­oted,” says Bar­ney Frank, the for­mer Demo­cratic chair­man of the Fi­nan­cial Ser­vices Com­mit­tee, who worked with Gar­rett for years.

But banks and in­vestors in­clined to drop Gar­rett over his anti­gay views would be tak­ing a risk: They rely on him to fight their bat­tles and could open them­selves up to re­tal­i­a­tion. Gar­rett, for ex­am­ple, has led the ef­fort to block the Trea­sury Depart­ment from des­ig­nat­ing non­bank in­sti­tu­tions as “sys­tem­i­cally im­por­tant fi­nan­cial in­sti­tu­tions” and im­pos­ing an added reg­u­la­tory bur­den. He’s pushed to pri­va­tize mort­gage mar­kets and abol­ish Fan­nie Mae and Fred­die Mac. And his jaun­diced view of ac­tivist in­vestors has led him to ex­plore mea­sures that would make it eas­ier for com­pa­nies to fend off un­wanted at­tacks.

Th­ese bankers also rec­og­nize that the is­sue could cause them prob­lems in­ter­nally. Most large fi­nan­cial firms have ac­tive (and pow­er­ful) LGBT groups. They also have political ac­tion com­mit­tees that do­nate to politi­cians. Em­ploy­ees gen­er­ally pay lit­tle heed to how this money is spent—un­less they’re given rea­son to. “When I was at Credit Suisse,” says Sears, “we had se­ri­ous is­sues around [sup­port­ing] the Boy Scouts, given their pro­hi­bi­tion of gays.”

An­other ef­fect of Gar­rett’s re­bel­lion is that it’s dragged into the spot­light the un­com­fort­able ques­tion of what ac­com­mo­da­tions banks were will­ing to make for politi­cians be­fore gay equal­ity be­came a pri­or­ity—and what ac­com­mo­da­tions they’re will­ing to make now. Gold­man Sachs, JPMor­gan Chase, UBS, Cit­i­group, and Brown Brothers Har­ri­man were all among Gar­rett’s top donors in the last elec­tion. “I ar­gue this with Blank­fein all the time,” Frank says. “Their own eco­nomic self-in­ter­est has got­ten them to sup­port peo­ple who have very ex­treme views con­trary to what they pro­fess to be­lieve. Blank­fein told me, ‘Well, I shouldn’t have to make a choice.’ I said, ‘Well, that’s life. You make choices.’ ”

Noth­ing il­lus­trates this ten­sion bet­ter than the man re­garded as the most prom­i­nent Repub­li­can cham­pion of gay rights on Wall Street. Ac­cord­ing to data from the Cen­ter for Re­spon­sive Pol­i­tics, Paul Singer and the em­ploy­ees of El­liott Man­age­ment have been Gar­rett’s big­gest donors by a huge mar­gin dur­ing his 13 years in Congress. It’s no sur­prise that an ac­tivist in­vestor like Singer, with $27 bil­lion un­der man­age­ment at El­liott, would pre­fer Gar­rett to think of him as an ally.

With Gar­rett’s re­elec­tion cam­paign gear­ing up for Novem­ber, all of th­ese in­ter­ests are go­ing to have to choose a side. As one political strate­gist who deals with sev­eral of the in­ter­ested par­ties puts it: “It’s the big­gest scan­dal no­body in Wash­ing­ton or Wall Street wants to talk about.” Sure enough, Hen­sar­ling, Singer, Loeb, and Blank­fein all de­clined in­ter­view re­quests; Gar­rett’s of­fice ig­nored mul­ti­ple in­ter­view re­quests.

Gar­rett’s tim­ing couldn’t be worse. Democrats have al­ready re­cruited a strong chal­lenger for his con­gres­sional district in what is one of the most ex­pen­sive me­dia mar­kets in the coun­try (a fac­tor that un­til now worked in the chair­man’s fa­vor). “Gar­rett’s big­gest political as­set has long been the fi­nan­cial wind­fall he re­ceived pri­mar­ily due to his perch on the Fi­nan­cial Ser­vices Com­mit­tee,” says David Wasser­man, the House editor for the non­par­ti­san Cook Political Re­port. “If that goes away, it could be a whole new ball­game.”

Po­lit­i­cally speak­ing, Gar­rett is a fas­ci­nat­ing anom­aly—a bit like en­coun­ter­ing a pen­guin in the desert. His views are those of a ru­ral Alabama con­ser­va­tive, yet he rep­re­sents a pros­per­ous New Jersey district just over the Ge­orge Wash­ing­ton Bridge from Man­hat­tan that’s home to many bankers, bro­kers, and fi­nan­cial an­a­lysts. New Jersey’s 5th District re­sem­bles a chevron: it stretches up the Hud­son River, runs northwest along the New York state line and then bends to the south­west along the bor­der with Penn­syl­va­nia. For two decades it was rep­re­sented by Marge Roukema, a mod­er­ate, pro-choice Repub­li­can.

Gar­rett, on the other hand, is a found­ing mem­ber of the ul­tra­con­ser­va­tive House Free­dom Cau­cus. He’s staunchly pro-life, has voiced doubts about Obama’s cit­i­zen­ship, and voted to oust his own party’s for­mer speaker, John Boehner. When I vis­ited his Demo­cratic chal­lenger, Josh Got­theimer, in late Novem­ber, the young Mi­crosoft ex­ec­u­tive and vet­eran of Bill Clin­ton’s White House said the best way to un­der­stand Gar­rett’s hold on the district was to drive through it. Our trip be­gan in

the heav­ily pop­u­lated east­ern end. Got­theimer and his con­sul­tant, Adam Sil­ver­stein, picked me up in Ridge­wood, and we soon hit heavy traf­fic in Para­mus, even though it was lunchtime on a Thurs­day. “As you can see, most of the pop­u­la­tion is cen­tered around here, in Ber­gen County,” Got­theimer said. Para­mus, he noted, gen­er­ates more retail sales than any ZIP code in the coun­try. Ber­gen County, which makes up 72 per­cent of the district, is the last true swing district in the state, he said. Obama won it by 40,000 votes in 2012; Gov­er­nor Chris Christie, by 50,000 votes a year later. But it’s inch­ing Demo­cratic. The lat­est re­dis­trict­ing added the blue ur­ban cen­ters of Hack­en­sack and Tea­neck.

We got onto Route 17 and drove north to Up­per Sad­dle River. “This is the wealth­i­est town in New Jersey,” Sil­ver­stein said, wav­ing a hand as we drove past mul­ti­mil­lion-dol­lar es­tates. “Ber­gen County Repub­li­cans tend to have high in­comes and vote with their pock­et­books. But they’re gen­er­ally so­cially mod­er­ate or even lib­eral.” Roukema was the clas­sic Ber­gen County Repub­li­can.

Next we headed south­west along In­ter­state 287. Af­ter 30 miles or so, the ter­rain grew hilly and the towns far­ther apart. We crossed into Sus­sex County, Gar­rett’s home, and stopped for gas. It was clear from look­ing around that horses and cows out­num­bered Wall Street work­ers. Res­i­dents of Sus­sex County and neigh­bor­ing War­ren County are less wealthy and more so­cially con­ser­va­tive than their coun­ter­parts to the east. And there are enough of them to shade the district red.

Gar­rett got his start—and his pol­i­tics—here, win­ning an As­sem­bly seat in 1990. He gained a rep­u­ta­tion as a staunch right-winger, “part of a unique cadre of leg­is­la­tors who took a deep pride in push­ing a rad­i­cal-right agenda and were known in­for­mally as the Moun­tain Men,” says for­mer Demo­cratic Gov­er­nor Jim McGreevey, whom Gar­rett tried to force from of­fice af­ter McGreevey con­fessed to hav­ing a gay af­fair. “The lead­er­ship in both par­ties worked to side­line them, since many of us, Repub­li­cans in­cluded, con­sid­ered their views os­si­fied. What hap­pened in that cau­cus meet­ing was not a sur­prise.” The term Moun­tain Men, McGreevey adds, refers to the ter­rain in the western re­gion from which they hailed— not to the movie Broke­back Moun­tain.

In 1998 and 2000, Gar­rett chal­lenged Roukema in the Repub­li­can pri­mary and lost. But in 2002, when she re­tired, a pair of Ber­gen County Repub­li­cans split the mod­er­ate vote and Gar­rett won the pri­mary and the seat. Early in his first term, he com­mit­ted the lone apos­tasy that blem­ishes his con­ser­va­tive record, bow­ing to pres­sure from Pres­i­dent Ge­orge W. Bush to vote for a Medi­care drug ben­e­fit he op­posed. Ac­cord­ing to a for­mer Gar­rett staffer, an irate con­stituent— pos­si­bly a chi­ro­prac­tor—sent him a life-size model of a hu­man spine and pelvis, with a note sug­gest­ing Gar­rett lacked one of his own. The spine had its in­tended ef­fect. Gar­rett kept it in his of­fice and hasn’t wa­vered from his prin­ci­ples.

Democrats have ar­gued for years that Gar­rett is out of step with his district but have never man­aged to un­seat him. The New York me­dia mar­ket is pro­hib­i­tively ex­pen­sive, so op­po­nents can’t de­fine him through TV ads. Be­fore now, Gar­rett kept a low pro­file, sel­dom flaunt­ing his so­cial con­ser­vatism. “He’s very good at hid­ing,” says Steve El­men­dorf, a fi­nan­cial ser­vices lob­by­ist in Wash­ing­ton and for­mer Demo­cratic House staff mem­ber. An­chored by his strong sup­port in the deep-red part of the district, Gar­rett has had lit­tle trou­ble get­ting re­elected. Most hand­i­cap­pers, in­clud­ing the Cook Re­port’s Wasser­man, still con­sider him a nar­row fa­vorite to win in Novem­ber.

But his at­tack on gay can­di­dates ap­pears to be al­ter­ing that equa­tion. “He’s an ide­o­logue who doesn’t rep­re­sent the val­ues of our com­mu­nity nor my out­look as a busi­ness­man,” says Peter von Halle, a Repub­li­can who owns a bro­ker­age firm in Ridge­wood and is sup­port­ing Got­theimer. “Most peo­ple wouldn’t be­lieve that one of the most rad­i­cal rep­re­sen­ta­tives in the coun­try is sit­ting right here in the middle of north­ern New Jersey.” Von Halle says the is­sue is es­pe­cially sen­si­tive be­cause Tyler Cle­menti, a gay Rut­gers fresh­man who was bul­lied and killed him­self by jump­ing off the Ge­orge Wash­ing­ton Bridge in 2010, was from Ridge­wood. “We are a very tol­er­ant, di­verse, and ac­cept­ing com­mu­nity who wouldn’t want some­one bul­lied over their sex­ual ori­en­ta­tion,” Von Halle says.

If Gar­rett is sub­jected to more scru­tiny in the up­com­ing cam­paign, this is­sue could pose a se­ri­ous li­a­bil­ity be­cause his ob­jec­tion to gay peo­ple isn’t lim­ited to political can­di­dates. Ex­am­in­ing his pub­lic-dis­clo­sure fil­ings, I no­ticed that he’s a co-founder and for­mer trustee of a pri­vate high school, Ver­i­tas Chris­tian Academy, in Sus­sex County, which ex­plic­itly for­bids “ho­mo­sex­ual ac­tiv­ity.” The “Code of Con­duct” on the Ver­i­tas web­site warns stu­dents that any vi­o­la­tion will draw an au­to­matic sus­pen­sion and pos­si­ble ex­pul­sion.

It’s im­per­a­tive for Gar­rett to be seen as firmly in com­mand of the cap­i­tal mar­kets sub­com­mit­tee, be­cause that’s the ba­sis of his Wall Street do­na­tions. A weak chair­man os­tra­cized by his

col­leagues won’t move many bills or sway the full com­mit­tee; the in­vis­i­ble trans­ac­tion of Wash­ing­ton in­flu­ence will stop work­ing for him. Bank lob­by­ists who write checks to re­main in his fa­vor and get their CEOs in­vited to his hear­ings to of­fer their “per­spec­tive” will be less re­cep­tive to fundrais­ing en­treaties.

Yet Paul Ryan, the new House speaker, won’t dare re­move Gar­rett, be­cause pun­ish­ing re­cal­ci­trant mem­bers of the Free­dom Cau­cus is what cost his pre­de­ces­sor, John Boehner, his job. Gar­rett’s big­gest threat is the pos­si­bil­ity that his fi­nan­cial sup­port­ers will aban­don him—some­thing that’s al­ready be­gun hap­pen­ing in the wake of this sum­mer’s con­tro­versy. Banks and hedge funds are loath to ad­dress Gar­rett’s re­marks, but his most re­cent dis­clo­sure fil­ing shows that sev­eral ma­jor donors stopped giv­ing to him, in­clud­ing Gold­man, JPMor­gan, and his big­gest donors, Singer and El­liott Man­age­ment. Loeb and his wife have gone a step fur­ther, per­son­ally con­tribut­ing to Got­theimer.

Still, many com­pa­nies, in­clud­ing U.S. Ban­corp, UBS, No­mura Hold­ings, Cap­i­tal One, and the mu­tual fund firm Cap­i­tal Group, con­tin­ued giv­ing money even af­ter his out­burst came to light. New Jersey’s Demo­cratic Se­nate ma­jor­ity leader, Loretta Weinberg, sent a let­ter pres­sur­ing th­ese banks and oth­ers to “take a stand against hate” and stop giv­ing to Gar­rett; at least one bank, Banco Bil­bao Viz­caya Ar­gen­taria, said it will com­ply. But other banks held firm. In a re­ply to Weinberg, Cap­i­tal One ini­tially de­fended its ac­tions: “We be­lieve that main­tain­ing a PAC fo­cused ex­clu­sively on is­sues that are core to the bank­ing in­dus­try is the most ef­fec­tive way for us to eval­u­ate can­di­dates.” Then, just be­fore Christ­mas, Cap­i­tal One re­versed it­self and an­nounced it would cease do­nat­ing to Gar­rett, af­ter stu­dent pro­test­ers from the Univer­sity of Penn­syl­va­nia de­manded the bank stop.

When con­tacted by Bloomberg Busi­ness­week to ask about their ra­tio­nale for stick­ing with Gar­rett, U.S. Ban­corp and No­mura both said they would cease do­na­tions. “We are a com­pany that is com­mit­ted to di­ver­sity and equal­ity in the work­place,” said No­mura spokes­woman Jen­nifer Will. UBS and Cap­i­tal Group wouldn’t com­ment. Mean­while, Got­theimer raised more money than Gar­rett did in the third quar­ter of 2015, bring­ing in $400,232 to the in­cum­bent’s $175,000. (Gar­rett still has $2.3 mil­lion on hand from hap­pier days, com­pared with his op­po­nent’s $934,000.)

“My take­away from talk­ing to peo­ple in the fi­nan­cial com­mu­nity,” Got­theimer says, “is that they don’t think that some­one who’s a so­cial ex­trem­ist can also be a prob­lem solver who can sit at a ta­ble and do busi­ness with them.” That con­cern ex­tends be­yond Gar­rett’s district. Last cy­cle, the Cham­ber of Com­merce, fed up with Tea Party-driven shut­downs and de­fault scares, took the un­ortho­dox step of en­dors­ing six Democrats; five of them won. Got­theimer could be next. “We’re look­ing for good, probusi­ness can­di­dates who can win in the fall and fo­cus on gov­ern­ing,” says Scott Reed, the Cham­ber’s se­nior political strate­gist.

Gar­rett’s fundrais­ing won’t get any eas­ier, be­cause he hasn’t backed away from his com­ments. Politico re­ported over the sum­mer that he’s worked out an ac­com­mo­da­tion whereby his dues will be paid into the NRCC’s build­ing fund and thus won’t be used to sup­port gay can­di­dates. It’s a po­si­tion that en­sures he won’t get an­other hu­man spine in the mail. But it doesn’t fix his prob­lem with Wall Street Repub­li­cans of­fended by his an­tipa­thy to gays and les­bians. “When I take [Got­theimer] around to raise money, in­clud­ing to ac­tivist hedge funds, it won’t be be­cause they’re ac­tivists or from hedge funds,” said a con­ser­va­tive New York hedge fund man­ager back­ing Jeb Bush for pres­i­dent. “It will be be­cause they’re sup­port­ive of gay rights.”

Such cross-party sup­port could end up be­ing de­ci­sive. “Got­theimer has a golden op­por­tu­nity to drive a wedge be­tween Scott Gar­rett and mod­er­ate Repub­li­cans on so­cial is­sues,” Wasser­man says. That could po­ten­tially give Got­theimer the 10 to 15 per­cent of Repub­li­can vot­ers he’ll need to win the district.

Sears, of Out on the Street, says the sit­u­a­tion banks face with anti­gay Repub­li­cans is sim­i­lar to one they face abroad. “Places like Uganda and Sin­ga­pore are mas­sively anti­gay, yet banks still have to do busi­ness there,” he says. “The key is lever­ag­ing the soft power busi­ness lead­ers have in th­ese coun­tries.” The same strat­egy could ap­ply with Gar­rett. “Cap­i­tal One is sup­port­ing him this time,” Sears said, a few weeks be­fore the bank’s re­ver­sal, “but they might not the next time.” He added that Cap­i­tal One had just joined Out on the Street’s board.

Banks are leery of crit­i­ciz­ing Gar­rett be­cause the com­mit­tee chair­man could well be re­elected. But that strad­dle may not be vi­able for much longer. Wall Street’s near-uni­ver­sal ac­claim for the Supreme Court’s de­ci­sion le­gal­iz­ing same-sex mar­riage was a clear sign of which way the wind is blow­ing. “Cor­po­rate Amer­ica views LGBT is­sues as a ba­sic civil-rights is­sue,” lob­by­ist El­men­dorf says. “If an elected of­fi­cial said some­thing racist about His­pan­ics or African Amer­i­cans, it would be very hard for a cor­po­ra­tion to sup­port that of­fi­cial.” Gar­rett’s con­tin­u­ing fa­vor on Wall Street shows that some firms don’t yet ac­cept this par­al­lel. It will take more con­tro­ver­sies for that to change. “The thing the LGBT com­mu­nity needs to do,” El­men­dorf says, “is put a big­ger spot­light on the peo­ple and the firms who help law­mak­ers like Gar­rett, and let them know, if you want to be known as pro-LGBT, you can’t sup­port some­one like this.” <BW>

Gar­rett adds his as­sess­ment to a Dodd-Frank “re­port card” in 2011

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