Wall Street Runs for Congress

Lots of hedging from Carolyn Maloney's foe, hedge fund lawyer challenger Reshma Saujani

One of them was Carret Asset Management, where she was chief operating officer of a fund aimed at Indian investment. The fund was partly controlled by Hassan Nemazee, who pled guilty in March in Manhattan federal court to a decade-long Ponzi scheme in which he looted $292 million from banks. The money went for a yacht, a Maserati, a Cessna, vacation homes, and generous donations to a slew of Democratic candidates, including John Kerry's 2004 presidential campaign, where he met Saujani.

"He wanted to do an Indian fund, and I was active in the South Asian community," she said. She said she saw no signs of wrongdoing and pointed out that other Democrats, including Hillary Clinton and Maloney, were happy to accept campaign gifts from him in the past. She said she omitted mentioning her work for the fund on her campaign bio because "it wasn't that important."

Saujani also skipped over two years spent with the Carlyle Group, the global investment giant with interests ranging from defense contractors to nursing homes. She was associate general counsel for an affiliate, Carlyle–Blue Wave Partners Management, investing in mortgage-backed securities. The firm pulled the plug on the fund when the market collapsed in 2008.

Morgan Schweitzer

Fortress Investment, where Saujani went next, has also had its headaches. The hedge fund caught reams of bad ink in 2007 when it was revealed to own a subprime mortgage lender that foreclosed on New Orleans homeowners who fell behind on their payments after Hurricane Katrina. She said she was "personally unaware" of the problem. "My work there was very valuable. I learned a lot. I was there when the world was blowing up," she said, referring to the 2008 meltdown.

Her financial colleagues clearly believe the lessons took. Her campaign filings read like a Wall Street who's who: There is Steven Rattner; Morgan Stanley's John Mack; Goldman Sachs' Gary Cohn. Saujani estimates that about one-third of the $800,000 she has raised has come from the financial industry. That's a pretty hefty proportion, although a review suggests that the figure is closer to 40 percent.

Whatever the number, it's a dramatic endorsement for a first-time candidate up against a veteran whose only apparent failing is to have offended the financial powers-that-be. Saujani counters that she has refused all PAC money, while Maloney has hauled in more than $500,000 from the committees. "Look," she says, "Obama got $1 million from Goldman Sachs, and he's been tough on Wall Street. People write checks for different reasons." Including to send a message.


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