Nearly two weeks after announcing his presidential bid, Texas Gov. Rick Perry has displayed Texas-size ambition and signs of early success in raising the large sums necessary for a national campaign. But unlike other candidates, Perry may not have ready access to one lucrative source of support: Wall Street.
Perry will be hamstrung by new Securities and Exchange Commission rules that inhibit donations from financial services company employees to sitting governors. The regulations are intended to limit contributions that could influence state contracting decisions.
For this and other reasons, Perry is likely to be more reliant on a familiar network of corporate and construction barons and conservative fundraisers who backed his campaigns for governor, as well as a cluster of "super PACs," the new entities that can legally raise unlimited sums from wealthy donors, including corporations, for independent campaign efforts.
The SEC rules could pose a serious hurdle for the Texas governor. In 2008, securities firms alone gave the Republican presidential candidates nearly $20 million, according to data from the Center for Responsive Politics.
Perry can succeed without the support of Wall Street, but it would require strong help from other sectors and could increase his reliance on the super PACs. The biggest of the new groups is the Texas-based super PAC Make Us Great Again, led in part by Michael Toomey, a lobbyist and a former chief of staff to the governor.
Campaign finance lawyers are split on whether financial services employees affected by the rules could simply channel their money to super PACs working on Perry's behalf. Ken Gross of Skadden, Arps is urging affected clients in the financial services industry to be cautious about giving to a super PAC for Perry.
"You don't want to be doing something indirectly that you can't do directly," said Gross, who represents Democratic and Republican clients.
Republican campaign finance lawyer Jan Baran said he believed such donations would be permitted, but agreed that the new rules were worrisome for the campaign.
"Perry will definitely lose some campaign funds because of the pay-to-play rules," Baran said.
When it comes to contributions directly for his presidential campaign, Perry's staff has already created an aggressive finance operation to encourage influential donors to raise as much as $500,000, which earns them the title of Patriot.
The so-called pay-to-play rules that went into effect in March prohibit any investment advisor who contributes more than $350 to state or local officials who can influence investment decisions from receiving payment from that government entity for two years. Legal experts are actively discussing how far the limits extend beyond individual advisors and firm executives.
Of the current Republican field, Perry, as a sitting governor, is the only candidate who would be affected by the regulations.
"This is a very big deal," Gross said. He said the new rules could affect "literally hundreds, if not thousands, of hedge funds and private equity firms."
Wall Street firms and investment banks are paying attention, he said, because the penalties of the new rules are "draconian."
"For investment advisors who do business with the state of Texas, it will have a chilling effect on their ability to contribute" to Perry, said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a lobbying group representing the country's leading banks and investment firms.
Perry's fundraising from the corporate establishment could be hindered further by his statement last week that Federal Reserve Chairman Ben S. Bernanke's plan to tackle the recession was "almost treasonous" — a statement that raised eyebrows on Wall Street. Perry spokesman Mark Miner said the governor was referring to the "frustration many Americans have with out-of-control spending and printing more money."
Perry has to meet ambitious fundraising goals quickly to establish credibility and compete with former Massachusetts Gov. Mitt Romney, who is leading the money race. One of Perry's natural bases of financial support will be the energy sector, but he is also expected to be able to draw heavily from donors in other industries with strong Texas footholds, including defense and construction contractors, insurance firms and technology companies.
Yet more than any other presidential contender so far, Perry is poised to be lifted by the new breed of political committees that can raise and spend unlimited amounts of money on behalf of candidates. Among the half-dozen new super PACs for Perry, several are run by former Perry aides or associates, raising questions about the extent of their independence.
The most substantial effort appears to be Make Us Great Again, which was started by Toomey and G. Brint Ryan, a longtime donor to Perry's gubernatorial campaigns.
Toomey's ties to Perry drew scrutiny in 2007, when the governor signed an executive order that all sixth-grade girls in the state receive the Gardasil vaccine against humanpapilloma virus. Toomey had by then left the governor's office and was lobbying for Merck, the manufacturer of the vaccine.
The governor's office has maintained that Toomey exercised no clout in the decision, and Perry recently called the move a mistake.
Toomey's connections to Perry extend to a partnership with the governor's chief political strategist, Dave Carney. The two own a 2.7-acre private island on New Hampshire's Lake Winnipesaukee.