Few Americans knew Rep. Patrick McHenry (R-N.C.) before he took over last week as the temporary U.S. House Speaker — and if they know him now, it’s probably for swinging a gavel harder than you might expect, or for sporting a bow tie.
One reason regular people don’t know McHenry is because he hardly represents them. The 10-term congressman projects and personifies the cold, corporate Washington, D.C. politics that systematically preference donors’ interests over those of the public.
McHenry only reported raising $856 from small donors (those giving less than $200) in the first half of the year — or a paltry 0.06 percent of the $1.5 million he collected. According to a Lever review, roughly 90 percent of the campaign cash McHenry has raised this year came from executives in the financial, banking, cryptocurrency, and real estate industries; lobbyists and political action committees (PACs); and payday lenders and debt collectors.
These donations have coincided with McHenry, as chairman of the House Financial Services Committee this year, pushing to weaken regulations designed to rein in some of these industries — part of his long history of repeatedly going to bat for the financial sector throughout his time in Congress.
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McHenry assumed the role of speaker pro tempore last week after a handful of right-wing Republicans and most Democrats voted to remove House Speaker Kevin McCarthy (R-Calif.) from the position.
According to the financial industry newsletter Capitol Account, Wall Street very much wants McHenry to be made speaker on a permanent basis. It likely won’t happen, but McHenry’s temporary elevation and his lengthy career in Congress represent a continuing triumph for the financial industry and other special interests.
Since taking over the Financial Services Committee in January, McHenry has received at least $140,000 from executives at private equity firms, hedge funds, and venture capital firms, as well as from their spouses.
While McHenry is ostensibly the financial industry’s chief regulator in Congress, he has instead acted as its top booster.
McHenry has spoken out against a new rule from the Securities and Exchange Commission (SEC) to block alternative investment firms, like private equity and hedge funds, from giving special rights and privileges to certain favored investors and not to others who have invested in the same funds.
Under current practice, some investors in these funds may pay lower fees than other investors; and certain investors may receive special permission to withdraw their money if things start going south. This obscure but common industry practice likely costs state and local retirement systems — and the public workers whose pension savings they manage — as well as taxpayers more broadly.
President Joe Biden’s SEC weakened its proposed rule on this topic following extensive industry lobbying, but McHenry still slammed the regulations in a statement: “I urge the SEC to rescind this ill-advised rule, which is a thinly veiled attempt to dictate private fund management,” he said.
McHenry has also looked to stymie efforts at the SEC to require public companies to disclose the risks that climate change poses to their businesses, complaining in a letter to SEC Chairman Gary Gensler that the agency “has chosen to flout the democratic process and pursue its progressive social agenda through the promulgation of this extraordinarily expansive climate disclosure rule.”
McHenry has received donations this year from several PACs for entities that have lobbied on the SEC’s proposed climate disclosure rule — including Allstate Insurance, the American Bankers Association, the Investment Company Institute, the Securities Industry and Financial Markets Association, and the U.S. Chamber of Commerce.
So far this year, McHenry has received at least $117,000 from cryptocurrency interests, as he’s pushed to shore up the tarnished industry’s regulatory status.
Digital currencies have struggled over the past year since the implosion of the crypto exchange FTX, and as the Biden administration has accused several crypto exchanges of illegally selling unregistered securities.
McHenry held a crypto hearing in which he criticized Gensler and Biden officials for “driving innovation overseas and endangering American competitiveness.” McHenry has proposed a new crypto regulation bill backed by the industry.
Critics say his legislation would “weaken consumer and investor protections for both traditional and crypto investors.”
Before taking over the top financial services committee role, McHenry authored legislation to allow predatory lenders to bypass state laws limiting the interest rates they can charge on consumer loans — including the law in his home state of North Carolina. This year, McHenry has received $8,000 from donors in the payday lending industry.
What’s most remarkable about McHenry’s reliance on industry cash is how relatively normal it is.
Last election cycle, McHenry raised just $7,655, or 0.2 percent of his campaign money, from small donors, according to data from OpenSecrets. That amount was lower than all but a dozen members of Congress, but it was not an extreme outlier.
More than 50 lawmakers raised less than 1 percent of their campaign cash in small donations last cycle; 60 percent of lawmakers received less than 10 percent of their fundraising hauls from small donors.
McHenry’s top career source of cash has been the securities and investment industry, followed by the insurance, banking, real estate, and finance industries, according to OpenSecrets.
Since taking over the financial services committee this year, McHenry’s top individual source of cash has been the private equity firm Apollo Global Management.
Apollo executives donated $37,600 to McHenry’s campaign starting in early March, around the time the Beltway newsletter and Capitol Hill scoop factory Punchbowl News announced it would hold an event headlined by McHenry about “capital and American business“ — a conversation that was sponsored by Apollo.
