Wall Street money a canard in DA race

In a year when more than a dozen people are running for New York City mayor, the race for Manhattan district attorney is not getting much attention. That’s a mistake. A vacant seat in this crucial office — which has only had four incumbents in the past 83 years, going back to Thomas E. Dewey — is a rare event. In 2021, the race has become a referendum on reforms being championed by the progressive left.

With eight candidates in a race where a plurality will pick the Democratic nominee — tantamount to election in Manhattan — a familiar media narrative has emerged: “Wall Street” money could well compromise DA investigations. “Wall Street Is Donating to This D.A. Candidate. Is That a Problem?” asks a headline in The New York Times. Other inquiring media minds want to know as well.

The target of the Times and others is Tali Farhadian Weinstein, an Iranian-Jewish refugee and Yale Law graduate who became a Rhodes scholar and served as a federal and state prosecutor. She is married to Boaz Weinstein, founder of the hedge fund Saba Capital, which in certain circles seems to confirm Weinstein’s disqualification. The argument from the left is that Weinstein cannot be expected to act as the “Sheriff of Wall Street” because she received a number of large contributions from the financial industry and is married to a hedge fund manager.

“By running a campaign that’s so tied to Wall Street, Ms. Farhadian Weinstein has put herself at a real political and frankly ethical disadvantage,” sniffed Jamarah Hayner, campaign manager to one far-left wing candidate, Tahanie Aboushi, who has never prosecuted a case.

But the idea that “Wall Street” donations will influence the Manhattan DA’s office is filled with misconceptions and half-truths. Worse, it singles out one type of donor as problematic, while leaving unexamined potential conflicts of interest in the campaign coffers of other candidates.

The biggest misconception is that the Manhattan DA will confront huge numbers of cases involving the finance industry. To be sure, under both longtime DA Bob Morgenthau and current DA Cy Vance, the office has always looked for cases involving banking and securities crimes. But those have tended to involve either penny-stock boiler rooms and other retail investment frauds, or U.S. sanctions violations by foreign banks.

Important as those cases were, the office under Morgenthau or Vance has not been involved in prosecuting the thousands of hedge funds, private equity firms and venture capital firms in the tristate area that do business in Manhattan.

The reasons are not complicated. These firms are much more likely to be investigated for civil and regulatory violations by the Securities and Exchange Commission or the New York State attorney general’s office. Criminal cases — often involving insider trading — have been handled primarily by federal prosecutors, for varied reasons. One key reason is that prosecutors in the DA’s Major Economic Crimes Bureau are hobbled by the antiquated tools available under state law to tackle insider trading and related crimes.

Despite that, the office has always had a robust white-collar enforcement apparatus, which all of the candidates have pledged to enhance. The bread-and-butter cases over the years have been crooked lawyers, fraud by construction companies, crimes by labor unions, cybercrime, Ponzi schemes, and various other frauds committed outside the finance world — as exemplified by the current investigation of the Trump Organization, or the successful accounting fraud prosecution of Tyco executives under Morgenthau.

The reality is that any industry, at any time, can become involved in a Manhattan DA investigation. But the likelihood that a particular company with a close connection to the sitting DA will be investigated is vanishingly small. And when that happens, ethical DAs have rules for recusal in place.

Indeed, if the issue is conflicts and other issues involving donors, the media seem to have missed the boat. One candidate, Diana Florence, has sworn off donations from construction companies, yet has taken nearly half of her campaign contributions from construction unions and their PACs. Another, Aboushi, has collected nearly 90% of her donations from outside of Manhattan.

But the biggest potential conflict of all is criminal defense lawyers. This legal source of contributions stirred an uproar several years ago when Vance accepted their donations. Vance changed his policy and urged a change to state law, but only four candidates have followed suit, including Weinstein, who has by far the strictest policy of all. She limits defense contributions to $1, and unlike some of her opponents, will not take money from entire law firms who handle such cases.

Backbiting is to be expected in politics. Let’s hope the candidates and the public start focusing instead on keeping New Yorkers safe.