May 24, 2024

“People will change horses,” said Dave Carney, a veteran Republican strategist for both former Bush presidents. “You may get really excited about somebody and then all of a sudden realize, ‘Eh, not really my cup of tea.’”

Where Wall Street puts its money matters because financial industry executives are among the biggest donors in presidential elections. And while bankers and asset managers generally favor lower taxes and lighter-touch regulation, they also value stability and experience — and they spread their money around to candidates of both parties, meaning they’re very much in play in each cycle.

On paper, that should give DeSantis an advantage. People close to Wall Street donors said his national profile and powerhouse fundraising operation that has included support from hedge fund titans like Ken Griffin and Jeff Yass had positioned him as most able to survive a primary with former President Donald Trump.

DeSantis’ gubernatorial reelection campaign is still loaded with cash, giving him big advantages over possible competitors. But many now say he no longer seems so formidable — at least on Wall Street.

His escalation of a feud with the Walt Disney Co. over its opposition to what critics called the “don’t say gay” law has made for a rocky rollout to an expected presidential campaign announcement in the coming weeks. On April 26, the company announced it was suing DeSantis, saying he violated its First Amendment rights — which will force him to do battle with one of his state’s largest employers in federal court.

It was “‘wait and see,’ and this is why,” said an adviser to one top GOP donor in New York, who like others interviewed for this story was granted anonymity to avoid alienating candidates. “We’re not the only ones who are happy with our decision to wait and see.”

With Trump surging in the polls following his indictment on criminal charges stemming from alleged hush money payments, one executive at a New York bank said confidence in DeSantis’s ability to win is flagging.

“DeSantis is certainly a better option than Trump at this point,” the executive said. “But he’s a really weak option.”

The executive said many are growing resigned to the possibility of a general election rematch between Trump and President Joe Biden.

“What we probably wind up with is a choice between a guy who is very old and wants to raise our taxes and reregulate everything, and a guy who could be running from prison,” the executive said.

In the meantime, any hesitation about DeSantis’s viability could be good news for Republicans who have tried to carve out space as business-friendly alternatives to Trump. Former South Carolina Gov. Nikki Haley and Sen. Tim Scott — another South Carolina Republican who has launched an exploratory committee — have started lining their war chests with checks from major investors, according to campaign filings released in April.

During the first quarter, Haley raised about $8.3 million across her campaign, joint fundraising committee and leadership PAC. Scott, the ranking member on the Senate Banking Committee, raised $1.6 million and had $21.9 million on hand through his Senate committee, according to POLITICO’s analysis of his FEC filings. Those funds can easily be transferred to a presidential committee should he formally announce.

Scott is a fixture in New York, turning up for meetings at various big banks, and is beginning to draw backers at firms like Goldman Sachs. Bankers say they appreciate both his personal narrative — rising from humble beginnings — and his positive message about the power of American capitalism.

Still, Scott and Haley’s fundraising totals remain modest compared to those of DeSantis-aligned groups — one state-level committee, Friends of Ron DeSantis, has more than $85 million on hand.

For many Republicans on Wall Street, “there’s a lot of concern about whether Trump will consolidate support in the polls,” said Ken Spain, a partner at Narrative Strategies who advises investment firms. “Then the concern becomes: Does that freeze money in the investor class? Do people sit on the sidelines if they think the chance of defeating Trump in a primary is diminishing?”

Rep. Patrick McHenry (R-N.C.), who leads the House Financial Services Committee, said in an interview at the Milken Institute Global Conference in Beverly Hills this week that the Trump campaign’s tactics over the next two months will be “well-organized, calculated, surgical.”

“This reminds me a lot of ’16 where everybody’s trying to figure out alternatives to Trump,” he said.

Those dynamics won’t make things any easier for DeSantis, who’s been catching flak over everything from the Disney fracas — a “self-inflicted wound,” one financial industry power broker said — to his arms-length relationship with key donors and GOP allies in Florida.

“I call my donors. I call my supporters. And that’s been an issue that people have complained about with him,” said Miami Mayor Francis Suarez, a Republican who has flirted with a 2024 bid.

But Scott, Haley, former Vice President Mike Pence and other potential GOP nominees face their own challenges. While DeSantis has shown he can win big in a swing state, other nominees have won in Republican strongholds. Many also lack national name recognition that would put them within striking distance of Trump or DeSantis.

“Scott is pretty fantastic, and if he can perform the way I think he can he has a real chance,” said one senior banker who is trying to organize support for him. “But it’s obviously a big hill to climb.”

DeSantis allies are taking comfort in the difficulties other candidates could have in breaking through. While there’s “some hesitancy from the Wall Street Journal class,” the Florida governor’s resources should be enough to sustain any surge from non-Trump competitors, said Jason Thomas, a Republican strategist who runs a pro-DeSantis Super PAC.

Even though DeSantis has shown a willingness to wage public battles against big businesses — hardly typical of what Thomas labeled a Country Club Republican platform — Thomas said he expects financial services donors to “eventually come home when DeSantis recaptures his first-place position in the nomination process or is the nominee.”

The first executive at the large New York bank said Wall Street would love a candidate like former House Speaker Paul Ryan “or a younger Mitt Romney.”

But they acknowledged that Trump would likely obliterate any candidate from the increasingly small centrist segment of the GOP.

“We all saw what happened to Jeb Bush, who everybody up here loved,” the executive said of Wall Street donors who flocked to the former Florida governor’s 2016 campaign. “He got crushed and crushed quickly, and that would just happen again.”

DeSantis could face another problem even if he does win substantial financial industry backing: Executives say they worry that raising money or donating to his campaign would give Trump the chance to brandish him as a Wall Street lackey.

“We know everyone hates us and that nobody running for president wants to be seen as the ‘Wall Street candidate,’” the first executive said. “So you’ll probably see a lot of people just sitting this one out.”