In August 2004, then–New York Senator Hillary Clinton rang the opening bell at the New York Mercantile Exchange, the world’s reigning energy market. When she arrived at the trading floor, the traders unabashedly booed her. “It wasn’t because they hate Democrats,” a young man who worked in the trading pits, Ben Kaufman, told me at the time. “A lot of the traders are Democrats. They just hated her. The exchange apologized and forced all the traders to do it over again and clap for her.”
Four years later, that energy exchange was bought by an even bigger market, the Chicago Mercantile Exchange, also known as the CME. In one of Clinton’s recently leaked Wall Street speeches to the CME, dropped by WikiLeaks on Friday, she directly refers to the reason why traders of futures such as crude oil and pork bellies are so wary of her: Clinton scored a bonanza on a series of futures trades in the late 1970s that were potentially unlawful. More concerning, the totality of her leaked speeches, which have been buried under the Trump carnival, display an unsettling camaraderie with not just Wall Street but also Wall Street’s dark side.
Clinton’s own remarks about her questionable trades are a clear example of why even some of Wall Street’s most hardened veterans—its traders—find her candidacy for U.S. president so deeply discomfiting. “Now it’s always a little bit risky for me to come speak to a group that is committed to the futures markets because—there's a few knowing laughs—many years ago, I actually traded in the futures markets,” Clinton said in the paid speech to the CME in November 2013. “I mean, this was so long ago. It was before computers were invented, I think. And I worked with a group of like-minded friends and associates who traded in pork bellies and cotton and other such things, and I did pretty well.” She did so well, in fact, a number of experts deduced her success was virtually impossible.
“I invested about a thousand dollars and traded up to about a hundred thousand,” Clinton recounted of her trades, according to excerpts from the leaked CME speech. “And then my daughter was born, and I just didn't think I had enough time or mental space to figure out anything having to do with trading other than trading time with my daughter for time with the rest of my life. So I got out, and I thought that would be the end of it.”
But it wasn’t. Because Clinton earned what turned out to be $98,540 off a paltry $1,000 investment—without ever having traded before in the futures market, which is much riskier and far harder to make money in than the stock market. When Clinton’s winning trades surfaced in 1994, after Bill Clinton was elected to his first term as president, experts who looked over her trading records found little to explain how she managed to do so well in just several months. According to one report from The Journal of Economics and Finance, which calculated the probability of her earning a nearly hundredfold return in the cattle futures bull market at that time, the most conservative odds for her success was “one in approximately thirty-one trillion.”
For those who believe Hillary Clinton may soon be our next president and face one of the biggest issues of our time—rising income inequality—the leaked excerpts from her paid Wall Street speeches are a must-read. And they confirm, as many suspected, there are two Hillarys: one a lifelong populist, the other a wealthy striver who really doesn’t understand the working class. At best, the excerpts show her oddly cavalier attitude toward matters of grave concern (the financial crisis of 2008) and potential wrongdoing (including her own). At worst, they betray her tin-eared approach to the plight of America’s struggling middle class, which she has never wanted to be a part of, and an eagerness to be embraced by the moneyed classes as one of their own.
“I believe our economy should work for everyone, not just those at the top,” she said in remarks Monday to cheering fans in Detroit. But in a private speech in February 2014 to Goldman Sachs, one of the world’s largest banks, and BlackRock, a global asset manager overseeing nearly $5 trillion, she was far more frank, stating that while many believed the working class was not getting a fair shot, she had no strong stance on the subject.
“I am not taking a position on any policy, but I do think there is a growing sense of anxiety and even anger in the country over the feeling that the game is rigged,” she said. “And I never had that feeling when I was growing up. Never. I mean, were there really rich people, of course there were. My father loved to complain about big business and big government, but we had a solid middle-class upbringing. We had good public schools. We had accessible health care. We had our little, you know, one-family house that, you know, he saved up his money, didn't believe in mortgages. So I lived that. Now, obviously, I’m kind of far removed [from the middle class] because the life I’ve lived and the economic, you know, fortunes that my husband and I now enjoy,” she added. “But I haven’t forgotten it.”
When WikiLeaks released excerpts of Clinton’s Wall Street speeches October 7, critics seized upon this last comment as somehow utterly damning (She’s admitting she doesn’t get the middle class!) But the problem here isn’t that Clinton doesn’t relate to the middle class. We already knew that. The problem is, she feels perfectly at ease confiding her innermost thoughts to Wall Street, but not to the voters she so passionately wants to serve.
“I mean politics is like sausage being made,” she ad-libbed in another leaked speech from April 2013. “It is unsavory, and it always has been that way, but we usually end up where we need to be. But if everybody's watching, you know, all of the backroom discussions and the deals, you know, then people get a little nervous, to say the least. So you need both a public and a private position.”
It’s this acknowledgement of public and private positions that’s been making voters so nervous about Clinton’s candidacy—and, most of all, her sincerity. How do we know which positions she believes in and which are just for show? In recent years, she’s shifted her views on gay marriage, immigration, energy policy and the Trans-Pacific Partnership trade deal, feeding the perception that she’s a political opportunist. What’s more, when asked in public forums to explain the reasoning behind her more abrupt turnabouts, she often deflects or downplays the question. Yet in her leaked speeches, she has no qualms about openly admitting this duplicitous tactic to paying audiences, confirming voters’ worst fears: There’s one Hillary for the privileged classes and another for the voting public she hopes to lead.
“You just have to sort of figure out how to…how to balance the public and the private efforts that are necessary to be successful, politically, and that's not just a comment about today,” she said in the leaked excerpt of the April 2013 speech. “That, I think, has probably been true for all of our history.”
For the past decade, it has become fashionable for our nation’s top political leaders to give private speeches to cosseted audiences for large sums of money. As someone who has covered Wall Street for two decades, I have attended a number of these events and can say the big banks, universities and politically connected organizations that pay hundreds of thousands of dollars for a single speech—as they did with Clinton—expect to hear information not readily available to the public. And they are typically not paying because they love and revere the politician. They are usually paying for easy access to power and because it amuses them to hear leaders’ backstories of major global events. For a smart, intellectual crowd, this is the purest form of entertainment.
So what does that make Hillary Clinton? Effectively, a hired performer.
Yet what should inflame Americans most is that these privileged audiences are paying to receive inside information from Clinton they cannot—information that many voters would certainly value before voting in November. Even after forking over hundreds of thousands of dollars to for a Clinton speech, these audiences are paying cheap relative to receiving direct access to a potential future president. It's a huge advantage to them and a massive disservice to the voting public, who are left guessing what Clinton will really do, what she really thinks. And it does irreparable damage to her oft-repeated assurances of seeking a shared prosperity for all. Remember, these speeches made her and her husband millionaires. How can working-class Americans hope for inroads to prosperity when even Clinton—through her actions—is demonstrating the best path is just to stand under the Wall Street cash spigot?
“New York is a kind of ATM machine for both Democrats and Republicans,” the former New York senator said in another leaked speech to Goldman Sachs, this time at a CEO conference in June 2013. During a third Goldman event later that year, Clinton observed, “Running for office in our country takes a lot of money, and candidates have to go out and raise it. New York is probably the leading site for contributions for fundraising for candidates on both sides of the aisle, and it's also our economic center.”
At the same event, she and Goldman head Lloyd Blankfein briefly joked about how real money can’t be made in Washington, but on Wall Street. “That’s how you have a small fortune, is you go to Washington,” Blankfein quipped. “You go to Washington,” Clinton agreed, “Right.”
While Clinton privately lamented the necessity of appealing to the nation’s wealthiest institutions to run for its highest office, her tone was also telling: This is a reality she seems to accept and doesn’t feel empowered to change—perhaps because it benefits her. In a leaked speech in January 2014, she references the Supreme Court’s Citizens United decision, saying, “It’s so ridiculous that we have this kind of free for all…but, you know, the Supreme Court said that’s basically what we’re in for. So we’re kind of in the Wild West, and, you know, it would be very difficult to run for president without raising a huge amount of money.”
In arguably the most glaring and worrisome example of two Hillarys (one who remains cozy with the top banks and the other a champion of the working class), Clinton’s website firmly puts the blame for the 2008 financial crisis on Wall Street. But her private, leaked speeches tell a different story.
“The financial crisis showed how irresponsible behavior in the financial sector can devastate the lives of everyday Americans, costing 9 million workers their jobs, driving 5 million families out of their homes and wiping out more than $13 trillion in household wealth,” her site says. Clinton, who was junior senator from New York from 2001 to 2009, a period that included the financial crisis, privately confided to the nation’s biggest banks that blaming them was “an oversimplification, we know, but it was the conventional wisdom,” according to her Goldman speech in October 2013. “I think that there's a lot that could have been avoided in terms of both misunderstanding and really politicizing what happened with greater transparency, with greater openness on all sides, you know; what happened, how did it happen, how do we prevent it from happening? You guys help us figure it out and let's make sure that we do it right this time.”
To hear her talk about the financial crisis, one might think Clinton still isn’t terribly clear on what caused it, even as Americans continue to fumble toward full financial recovery. But not to worry, Clinton has a few ideas on where to scout for the solutions. In leaked remarks to Deutsche Bank in October 2014—an institution now facing questions from the International Monetary Fund about its stability—Clinton noted financial reform “really has to come from the industry itself,” calling Wall Street bankers in several of her speeches “the smartest people.” Because, apparently, it’s not going to come from Washington.
In fact, the more one reads the 80-some-odd pages of highlighted leaks from Clinton's speeches covering everything from housing to marijuana to Israel—the more it’s difficult not to see that this financially driven echo chamber of Washington politicians performing for Wall Street dollars may benefit some—like Clinton—in the short term, but has few long-term benefits for Washington, Wall Street or the rest of America.
Luckily, Clinton’s leaked speeches also contains the solution to the possible problem of a Clinton presidency—just in case it’s as unimpressive as her candidacy.
“I don’t care if you’re a liberal icon or a conservative icon,” Clinton told audiences at the Goldman conference in June 2013. “If you are not willing to be active in your democracy and do what is necessary to deal with our problems, I think you should be voted out. I think you should just be voted out, and I would like to see more people saying that.