Former Maryland Gov. Martin O’Malley (D) has made Wall Street reform a central component of his presidential campaign.
Last week, O’Malley released a white paper detailing his plan to bring a mix of structural changes including the reinstatement of Glass-Steagall and strengthened regulations to the financial industry. On Tuesday, O’Malley sat down with Business Insider for his first interview about his Wall Street policy push. In that conversation, he railed against what he described as “lawbreakers” in the industry who he likened to bank robbers.
O’Malley also discussed several aspects of his push for Wall Street reform including:
- His thoughts on Democratic frontrunner Hillary Clinton’s policies and how he believes she should “be forced to” weigh in on Glass Steagall.
- The fact he believes Wall Street wants Clinton and former Florida Gov. Jeb Bush (R) to win their presidential primaries.
- And his desire to have a “sit down” with Sen. Elizabeth Warren (D-Massachusetts).
O’Malley’s fiery rhetoric about clamping down on what he describes as the “dangerous activities” of “megabanks” has caused some to brand him an “enemy” of Wall Street.
In his conversation with Business Insider, O’Malley said he doesn’t mind that label and would also be content if taking on Wall Street is seen as his major issue in the presidential campaign.
“I don’t mind. Look, there’s a lot of really good and decent people who work in the financial industry in our country and the vast majority of them are just as saddened at the sort of reckless behaviour and the inability — the utter lack of any sort of restraint and what it’s done to our economy,” O’Malley explained, adding, “So, I’m going to continue to speak truthfully about what I believe is in our country’s best interest. And if that makes me the enemy of a small clique of CEO’s of a small handful of big megabanks, so be it. I don’t really care. I’m running to be president of the United States. I’m not running to be you know wined and dined.”
Overall, O’Malley characterised his efforts as an extension of a vow made by the Democratic Party in the wake of the financial crisis.
“People are rightly angry that we as a party haven’t followed through on what they thought was the commitment and the promise we made to institute Wall Street reform. We got part of the way there with Dodd Frank, we didn’t get all the way there,” said O’Malley, adding, “It makes no sense to think that an industry where this much money is at stake would police itself. You know, if you slap a bank robber on the arm he’s going to rob the bank again. The same holds true with people in suits.”
Even if O’Malley, who is currently polling behind Clinton and Sen. Bernie Sanders (I-Vermont) in the Democratic primary, manages to make it to the White House, there are questions about just how much he’d be able to change Wall Street without congressional support. O’Malley told Business Insider he’s confident he could make a difference. Specifically, he cited his desire to appoint federal prosecutors who would be willing to pursue cases against the industry.
“Some of it comes down to the personnel appointments and the people that we’d put in place at the SEC and the Justice Department,” O’Malley said. “I think that is something that will have a huge impact regardless of what Congress does or doesn’t do.”
O’Malley also suggested he hopes to turn the 2016 elections into something of a referendum on Wall Street.
“I also think it should be stated pretty clearly that the biggest impediments to Wall Street reform have been Republicans in Congress. I’m not saying that there aren’t a few Democrats that have become weak kneed as well, but the biggest impediment is Republicans in Congress,” O’Malley explained. “This national campaign, with the higher turnout numbers that are generally in national elections, is an opportunity for people to make a change and to make a change in their Congress as well.”
Additionally, O’Malley hinted that he will force other candidates to address this issue in the Democratic primary debates.
“I’m not going to assume people aren’t interested. I know they’re interested,” said O’Malley. “Other candidates who think they can just gloss over this and go back to business as usual. … I think that that attitude will only last until the first debates.”
O’Malley also issued a warning to anyone on Wall Street who isn’t worried about impactful regulations coming about as a result of the 2016 election. He predicted there woudl be “a pretty abrupt awakening” for the industry’s “lawbreakers” if his bid is successful.
“People that actually do business and do it honestly on Wall Street would have nothing to fear,” O’Malley said, adding, “I think the habitual lawbreakers will be in for a pretty abrupt awakening here. We need to restore deterrents. We need to put prosecutors in place and people that are willing to take cases criminally when the facts justify a criminal prosecution.”
Wall Street donors are generally an important source of campaign cash for presidential candidates. However, O’Malley said he’s not concerned about his Wall Street crusade hurting his war chest.
“I really don’t care. I’m running my narrow path. It’s the path of putting the national interest first and putting it ahead of powerful wealthy special interests,” O’Malley said. “I know the path is narrow. I know that it’s probably the steepest path, but I also know it has the greatest audience and I know that that’s what people are looking for. They want a president that’s going to fight for them, that’s not going to compromise the national good for the sake of well-connected elites.”
Sen. Elizabeth Warren (D-Massachusetts) is the most prominent advocate of Wall Street reform on the political scene. Her office has not responded to requests for comment on O’Malley’s plan. However, O’Malley said he’s eager to “sit down” with Warren to discuss his platform.
“I’ve met her before. We were together at a fundraiser up in Baltimore when she came in to campaign for the DCCC and I had occasion to meet her there and hear her speak,” O’Malley said of Warren. “I’d like to have the opportunity to sit down with her and I hope I’m able to do that in the not-too-distant future. I think she speaks very clearly, which is hugely helpful to building a consensus on this issue.”
Right now, the politician O’Malley should be most concerned with is Hillary Clinton, who remains the overwhelming frontrunner in the Democratic primary.
Clinton unveiled her economic “agenda” on Monday. At that speech, she faced a heckler who challenged her to say whether or not she supports reinstating the Glass Steagall Act.
Glass Steagall, which was passed in 1933 and repealed in 1999, separated commercial banks and investment banks. Last week, Warren joined a bipartisan group of senators who are pushing to restore Glass Steagall. Both O’Malley and Sanders support its reinstatement, but Clinton has not made her position clear.
In his conversation with Business Insider, O’Malley said Clinton and all 2016 presidential hopefuls should be “forced to answer” questions about where they stand on Glass Steagall.
“I think it’s a pretty important issue. I mean, for 70 years we protected our common good against reckless behaviour by mega-speculation banks on Wall Street. … Wherever you stand, you should state where you stand,” O’Malley explained. “I have stated I am very much in favour of reinstituting Glass Steagall. I believe in doing the things that work, and in the hindsight of history, I think most people recognise that repealing Glass Steagall was a mistake and enabled this sort of reckless behaviour … and the crash that ruined so many families. So, I’m very much in favour of reinstating it and I think that all candidates in both parties are going to be forced to answer that question.”
O’Malley’s first major broadside against Wall Street came in his announcement speech in May where he claimed Goldman Sachs CEO Lloyd Blankfein wanted Clinton and former Florida Gov. Jeb Bush (R) to win their respective primaries. That claim has been called into question, but O’Malley doubled down on it in his conversation with Business Insider and predicted other major Wall Street executives feel the same way based on Clinton and Bush’s “positions.”
“I thought it was pretty widely reported that Lloyd Blankfein sent word to his people that they’d be just fine with either Bush or Clinton. I don’t think I would be on their short list,” O’Malley said. “That’s what I believe. … I mean, given what we know now about the candidates’ positions. And then, as I said at announcement day, I bet Lloyd Blankfein would be just fine with either Bush or Clinton. My guess is that probably Jamie Dimon would feel the same way.”
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