Apparently it can, according to a report from Politico, a specialized publication that chronicles the goings-on in Washington in minute detail.
The Senate Committee on Banking, Housing and Urban Affairs, which plays a major role in determining Washington policy toward Wall Street, is on the front line of the trench warfare in this year's mid-term elections as Democrats struggle to maintain their majority in the Senate.
Many Democratic incumbents face an uphill battle for re-election and most prognosticators see Republicans picking up at least three or four seats. The North Carolina race is currently rated a toss-up — one of a handful of races that will determine which party controls the Senate.
Hagan is a member of the Banking Committee but focuses more on her other committee memberships and is not campaigning on banking issues.
But well-heeled Wall Street contributors may withhold funding from her because they want to stop Ohio Democrat Sherrod Brown, who is not running for re-election, from becoming chairman of the banking committee if Democrats retain control.
Absolute majority in the Senate may seem illusory when filibuster rules often make it necessary to get 60 votes to pass legislation. The current lineup of 55-45 in favor of Democrats (including two independents) might become 52-48 in favor of Republicans, but the Senate could remain largely gridlocked thanks to filibuster rules that enable the minority to block legislation.
But the party with the majority also gets a majority on all the Senate committees and determines the chairman — a huge factor especially when legislation is hard to come by.
Committee chairmanship is not just a nice perk of seniority. It is the chairman who sets the agenda, schedules hearings, determines witnesses, and otherwise drives the poli! tical debate for the issues covered by that panel.
This powerful role not only influences new legislation but can shape implementation of all existing legislation and goad the government's conduct in one direction or another.
And Wall Street is horrified at the direction that Brown — a passionate advocate of limiting the size of banks and other restrictions — would take government policies on financial regulation.
The current chairman of the banking committee, South Dakota's Tim Johnson, is retiring. Brown, who is only in his second term, is not next in line in terms of seniority. But those who are qualify for other jobs and are likely to choose them.
Jack Reed of Rhode Island is first in line for banking chairman, but is thought to prefer the chairmanship of the Armed Services Committee, which is also opening up.
Chuck Schumer of New York, who is second in line, has been a steady supporter of Wall Street through his long career in the Senate. He would be welcomed by the industry but probably has his sights trained on the leadership position currently held by Harry Reid of Nevada.
Third in line, New Jersey's Robert Menendez, will almost certainly prefer to retain his post as chairman of the Foreign Relations Committee. That would make Brown chairman of the banking panel.
Brown is not Wall Street's only problem, because anti-bank legislation has proven to be one of the truly bipartisan issues in Congress. Brown has won over Republicans like David Vitter of Louisiana to cosponsor legislation that seeks to limit bank size by imposing tougher capital requirements.
And this is precisely why Brown poses such a danger for them. The industry needs someone in the post who would dampen the political backlash against Wall Street, not inflame it.
Brown, for instance, not only commissioned a report from the Government Accountability Office on how government policies subsidize big banks, but as chairman of the Subcommittee on Financial Institutions scheduled a! hearing ! in January to publicize its findings – and to caution the GAO against industry influence as it prepares the second part of the report.
It was Schumer's apparent distaste for the banking post that caught Politico's attention. Those familiar with the New York senator's thinking told the publication that taking a stand on banking issues, one way or the other, would impede his chances of becoming caucus leader, which is his ultimate goal.
If there is a chance Schumer will clear the way for Brown to chair the banking panel, that tilts Wall Street support to Republicans.
"A lot of people on Wall Street would give a lot of money to avoid that outcome," an unnamed "Democratic-leaning executive" told Politico. "People are tired of all the show trials. So if giving to someone like Kay Hagan means you get Brown as chairman? No thanks."
The top Republican on the committee is Mike Crapo of Idaho, a conservative considered more sympathetic to Wall Street complaints about government restrictions. He would be in line to chair the committee if Republicans gain the majority.
Voters in North Carolina, or in other Senate toss-up states like Louisiana and Alaska, may not be aware of it, but their votes could do much to determine the course of financial regulation in the coming years.
Darrell Delamaide has reported on business and economics from New York, Paris, Berlin and Washington for Dow Jones news service, Barron's, Institutional Investor and Bloomberg News service, among others. He is the author of four books, including the financial thriller Gold.
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