It's not just that finance industry players regard Perry with suspicion, thanks in part to his recent attacks on Federal Reserve Chairman Ben Bernanke. Perry's bigger problem is that federal rules actually bar certain finance-sector professionals from donating to his campaign.
Perry is the only presidential candidate in the field affected by the rules, which are aimed at curbing pay-to-play abuses in the lucrative municipal bonds and public pension industries. The federal rules penalize certain investment advisers and municipal securities dealers who make campaign contributions to state officials running for federal office. Perry is the only White House hopeful who fits that bill.
"There are going to be certain people who would like to make contributions to his campaign, or solicit contributions for his campaign, who will not be able to," said Kenneth Gross, who heads the political law practice at Skadden, Arps, Slate, Meagher & Flom. "I wouldn't call it debilitating. But it will certainly put him at some disadvantage in fundraising to all the other candidates who don't have these restrictions."
The unique application of certain financial regulations to the Perry campaign has caused something of a stir on Wall Street, where a client memo that Gross put out has been widely circulated. It's unclear how the rules will play out, but they could potentially hamstring dozens of CEOs and political action committees in the politically generous finance sector.
At issue are two regulations — a Municipal Securities Rulemaking Board regulation dating to 1994 and a Securities and Exchange Commission rule that took effect in March. The former applies to financial services firms that underwrite municipal bonds, the latter to advisers who manage the assets of state pension funds. In both cases, such firms may not do business in a particular state for two years if they donate or raise money for a covered candidate.
"It will definitely affect Gov. Perry," said Jan Baran, head of the election law practice at Wiley Rein LLP. "The issue is how much. First of all, how many investment advisers are likely contributors to any Republican presidential candidate? And second, how many are likely donors to Gov. Perry?"
Indeed, Perry's campaign and its allies have downplayed the rules and their effect. Perry "will do whatever it takes to follow the laws and regulations," said campaign spokesman Mark Miner. He added, "There's a lot of enthusiasm and excitement in and around the country, and we're confident that we'll have the resources to run a credible campaign — from behind."
One Perry backer was more blunt.
"Forget this SEC ruling for a moment, and ponder the question of the degree to which East Coast, Wall Street types are more prone to give to Gov. Perry, or to Mitt Romney, who is more out of their world," said the Perry supporter, who asked not to be named. "I'm not sure how big a pool there would have been there for Gov. Perry to begin with."
But that should be small comfort for the governor. It's hard to imagine anyone more cozy with Wall Street than Romney, the former governor of Massachusetts who was also CEO of the private equity investment firm Bain Capital. Romney is so popular in the financial services industry that dozens of Wall Street executives who backed President Barack Obama four years ago have donated to Romney's campaign this time around, the Hill newspaper reported last month.
Securities and investment donors have given millions to GOP presidential nominees in previous cycles, and they've played a starring role in Romney's fundraising apparatus. Finance industry donors gave more than $1 million to Romney's leadership PAC, Free and Strong America, last year, according to the Center for Responsive Politics.
The SEC and municipal rulemaking board restrictions, moreover, extend not just to donations but to money bundled, or collected on behalf of a candidate. In theory, Perry can fall back on a variety of super PACs, which can raise unrestricted money as long as they operate at arm's length from his campaign.
But though the regulations appear to exempt independent and super PAC expenditures, there are gray areas, noted Gross. The SEC might interpret the law more stringently than the Federal Election Commission, for example.
"The donors have to be extremely careful, and simply won't be able to give in many instances," Gross said. "And they may be spooked when it comes to the super PACs, because they may not have total confidence that the SEC will view them in the same way" as the FEC does.
There is some wiggle room in the rules, which impose penalties only on donors and not on candidates. Covered donors may give "de minimis" contributions of up to $250, for example, and may do business in Texas if they give to Perry, but only if they work for free. Nor is Perry without some Wall Street enthusiasts who are not covered by the rules. He recently wrapped up a New York fundraising tour that included an event hosted by Maurice "Hank" Greenberg, chairman and CEO of C.V. Starr & Co.
It was just the latest stop in a September fundraising sprint, which Perry hopes will demonstrate that he can raise money outside of Texas. The Wall Street pay-to-play rules won't make or break that effort. But they certainly don't help.
This is the first installment of Eliza Newlin Carney's Rules of the Game column, which will regularly chronicle the state of play in the world of lobbying, influence and political money.