Why are GOP donors betting so heavily on Keith Wofford?

There are many reasons to assume Republican Keith Wofford will lose big time in the New York state attorney general race in November. He’s running in a reliably Democratic state, in year when Democratic enthusiasm is expected to lead to a “blue wave.” He has yet to come within striking distance of opponent Letitia James in any poll and the vast majority of New Yorkers have no idea who Wofford is. He’s also a political novice, running against the New York City Public Advocate who has repeatedly won elected office.

And yet donors are generously funding his campaign. At the same time that Republicans have let Gov. Andrew Cuomo outspend GOP gubernatorial nominee Marc Molinaro by huge margins, they’re keeping Wofford financially competitive with James. In fact, Wofford has a slight edge in money on hand. Campaign filings with the state Board of Elections show that Wofford has $400,977, compared to James’ $383,768.

His campaign says he is about two-thirds of the way through raising enough to fund an ongoing $3.25 million ad buy. But he remains 12 points behind James, according to an Oct. 1 Siena College poll, with 36 percent of likely voters saying they will vote for him, the same support that Donald Trump received in New York in the 2016 election.

Usually donors prefer to bet on a winner. That’s why they haven’t rallied around Molinaro, according to a Republican strategist cited by The New York Times. So why do New York Republicans keep bankrolling Wofford’s campaign? Republican donors and activists say they think Wofford could pull of an upset.

Wofford is African-American and he has none of the baggage that comes with electoral experience, so Republicans think he could chip away at James’ support among minority voters in New York City while running up the score upstate. That the attorney general race is the only statewide election without an incumbent is also encouraging GOP donors to bank on Wofford as the campaign worth investing in. “Right now, the Republican Party sees a real opportunity to capture a statewide office,” Republican consultant Rob Ryan said. “Tish James isn’t really known upstate. Her base is in the city.”

Wofford, one of the most highly regarded bankruptcy attorneys in the country, is selling Republicans on the idea that all is not lost in the Empire State. The assets he brings to the campaign include an inspiring life story, an absence of scandal and a shot of diversity in a party that receives little support from voters of color. Although he is a wealthy corporate lawyer who lives in Manhattan, Wofford resembles many working-class white swing voters in that he went for Barack Obama in 2008 – donating $26,000 to his inaugural committee – before getting on the #MAGA bandwagon eight years later. He’s the only statewide candidate who can say that he voted for Trump without worrying about being considered a racist for backing the candidate who labeled Mexican immigrants “rapists” – though Wofford, unlike many other Republican candidates in New York, is not highlighting his support for the president in TV ads. Trump may nonetheless indirectly help Wofford’s fundraising efforts, since Republicans concerned that the state would pursue legal action against the president would want a sympathetic attorney general.

He even offers geographic diversity: his campaign pitch begins on the east side of Buffalo, where he grew up as the son of an auto worker. In Wofford’s telling, his mother passed on a love of learning by taking him to the library when she wasn’t too busy working odd jobs. Only through Wofford’s inherited work ethic could he make it through Harvard College and Harvard Law, a career in bankruptcy law and his present dark horse candidacy. This is literally the story that donors are buying with all those ads.

Many of Wofford’s donors may see in him more than just a promising Republican candidate, however: for some, especially in the finance sector, installing a potentially sympathetic New York attorney general is an investment that could pay handsome returns. (For a Democratic analogue, note that the real estate industry has given heavily James, as the attorney general is responsible for enforcing some housing laws.)

Wofford does indeed promise to go easy on the industries he would be charged with regulating, although he frames it as a means of stimulating economic growth – an unusual perspective for someone who would be the state’s top law enforcement officer. “People are sick of the decline,” Wofford said in an interview. “They’re sick of the economic stagnation. They’re sick of the corruption and they want someone in the attorney general’s office who is a straight shooter who is going to do something about it.” Democrats have targeted “whole industries,” driving away businesses and setting off a stream of trickle down misery, Wofford says, referring to how previous attorneys general have used the Martin Act.

The 1921 state law was not used much to prosecute securities fraud until the early 2000s, when Eliot Spitzer began pursuing Wall Street firms for using biased stock research to mislead investors, a strategy that Eric Schneiderman would later extend to cases such as investigating ExxonMobil for allegedly misleading investors and the public about climate change. In recent years, cases involving Goldman Sachs, Bank of America, Morgan Stanley, Barclays and Credit Suisse have been brought under the act and resulted in billions of dollars worth of settlement money to the state and the public.

Financial disclosures with the state Board of Elections show that vast majority of donors who have given at least $1,000 to Wofford’s campaign are either corporate lawyers or people working in finance – people, in other words, whose livelihood may depend in part on a relatively lax use of the Martin Act or who might benefit from having a friend on the other side of the table when the attorney general sues their client. Among the biggest supporters to Wofford has been Maurice “Hank” Greenberg, the former head of insurance giant AIG, who hosted a fundraiser for Wofford on Oct. 1. Records show that Wofford raised $285,987 that day. Greenberg has paid millions of dollars in settlements with the attorney general’s office and he is among the most prominent opponents of the Martin Act. “I fought two wars for my country. This is another war,” Greenberg told The New York Times just a few weeks before Wofford emerged from obscurity to become the GOP candidate for attorney general.

Wofford likes to make his case for how the use of the Martin Act hurts everyday people by recalling an auto shop run by two men he met named Rocky and Jason. They have a successful business outside an upstate Army base and want to expand to being open every day of the week. But they can’t access credit they need to do so without jumping through all sorts of bureaucratic hoops. They are victims of the Martin Act, according to Wofford.

It takes a bit of patience to follow his logic, but bankruptcy lawyers thrive in the convoluted corners of the legal system. If only financial institutions did not have to pay so much in fines “just because a politician wants to get a press release,” Wofford said, there would be more money available for them to lend to others. “It’s millions of dollars they spend, you know, defending these actions and complying with all the strong-arming and baloney. That’s money that isn’t available for the Rocky and Jasons in New York.”

Before the party’s May convention, Wofford was unknown in politics. At the time of his surprise nomination, some thought that his position on the ticket was a ploy to use a black man to gain an extra edge in the race. Some Republican insiders who were present say that Carl Paladino – a former Republican gubernatorial candidate known for making racist comments – urged party officials not to nominate a black man as they gathered for drinks the night before the nominating vote at Jake’s Saloon a few blocks away from the convention, which was held at The Ziegfeld Ballroom on W. 54rd Street. But Paladino – not a person known for distancing himself from self-made controversies – has a different version of events. He said in an interview that he urged party chair Ed Cox not to ”nominate a guy simply because he is a black guy from a big firm in New York that’s going to put up $100,000 for him.”

Records show that eight colleagues of Wofford’s from Ropes and Gray would go on to contribute more than $30,000 to his campaign. Others in the same field have also kicked in: Leslie Plaskon, a partner in the finance and restructuring practice and Paul Hastings, donated $7,500 to the campaign because of “the integrity and the independence that I see (in Wofford) and the disappointment with the prior two elected Democratic attorneys general.”

Wofford, 49, says he’s in the race to win and he intends to spend the remaining weeks of the race competing in upstate and downstate alike. He has the money to compete until voting begins, though he has yet to show that he really can rally enough voters to defeat James. However, even in defeat there might still be an upside, both for him, the donors who have supported his political rise, and opponents of the Martin Act. “Here’s a guy who’s made the decision to expend resources that some see as quixotic at best, but it will create a lot of friends for him in the Republican Party,” Democratic political consultant Hank Sheinkopf said. “He may be the future of the Republican Party in New York state. He’s young enough to be that future.”