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2016-12-13 22:32:15
DealBook: Elizabeth Warren Condemns the Wrong Man

Senator Elizabeth Warren, furious about President-elect Donald J. Trump’s appointments of finance industry insiders, took to Facebook a little over a week ago to fire off a message to her nearly 2.5 million followers.

She took aim at an individual she described as a “hedge fund billionaire” who is “thrilled by Donald Trump’s economic team of Wall Street insiders.”

The hedge fund manager she condemned was Whitney Tilson, who runs Kase Capital. Ms. Warren — the fiery Massachusetts Democrat who is known for her stern mistrust of Wall Street — called him out by saying, “Tilson knows that, despite all the stunts and rhetoric, Donald Trump isn’t going to change the economic system.” Then she added, “The next four years are going to be a bonanza for the Whitney Tilsons of the world.”

There’s one rather glaring problem with Ms. Warren’s attack: Mr. Tilson happens to be one of the few financial executives who publicly fought Mr. Trump’s election and supported Hillary Clinton. A lifelong Democrat who was involved in helping to start Teach for America, Mr. Tilson also happened to be one of the rare Wall Street executives who had donated to Ms. Warren and actively sought new regulations for the industry. Recently, he gave Mrs. Clinton $1,000 so he could see Ms. Warren speak at a campaign fund-raiser. (He’s also far, far from a billionaire.)

“I’ve donated money to her, attended her events, and did everything in my power to stop Donald Trump,” Mr. Tilson told me, talking about Ms. Warren and expressing dismay that he somehow became the target of her derision. “In addition, I agree with her 100 percent that large swaths of the financial industry have run amok and prey on vulnerable Americans, and thus strong regulation, including a muscular Consumer Financial Protection Bureau, is sorely needed,” he said.

Ms. Warren appears to be suffering from the same affliction that Mr. Trump’s critics accuse of him: a knee-jerk, fact-free reaction to something she had read in the news.

In this case, Ms. Warren seems to have come across a Bloomberg News article that includes some quotations from Mr. Tilson. But she didn’t read to the bottom or dismissed it before firing off her zingers.

In the article, Mr. Tilson had said, “I think Donald Trump conned them,” in reference to voters. “I worried that he was going to do crazy things that would blow the system up. So the fact that he’s appointing people from within the system is a good thing.” (He even said he took “glee” in voters’ anger over that.)

The part Ms. Warren may have missed toward the bottom was this: “I’m a fan of Dodd-Frank, I think banking should be boring,” he was quoted as saying, where he was also identified as a Clinton supporter. “I worry about Wall Street returning to being a casino.”

In fairness, depending on how you look at the situation, it is possible some readers and supporters of Ms. Warren will give her kudos for criticizing one of her own well-heeled donors. “She can’t be bought,” might be a generous way to consider the situation. But even a quick Google search of Mr. Tilson’s involvement in the recent political discourse over financial reform would reveal what he clearly meant by his quotation: that he was nervous about Mr. Trump appointing reckless and uninformed people to guide financial policy and that he was heartened that he had not.

As Ms. Warren has made clear, she abhors the idea of anyone who has worked in the financial industry working in government on policy that could affect the economy and Wall Street. This column has covered what I’ve described as her misguided view.

That’s not to say any administration wouldn’t benefit from bringing in some outsiders who could offer new and different perspectives, but that can’t be a qualifying measure. The next time you need heart surgery, do you want to go to a heart surgeon or a psychologist?

In fairness, Ms. Warren’s ambitious efforts to overhaul financial regulation are not without merit: There are large parts of the Dodd-Frank Act that have done a ton of good to protect the American public. She played a hugely important role recently in grilling the chief executive of Wells Fargo about his bank’s sham-accounts scandal, and her questioning appears to have helped bring about his resignation. And at a time when one party is in power — in this case, the Republicans — Ms. Warren’s position is even more important to help hold our leaders accountable.

However, her ad hominem attack on Mr. Tilson only serves to undermine her credibility and some of the good work she wants to achieve.

To make matters worse, Mr. Tilson’s wife, Susan Blackman Tilson, was one of the students in the first Harvard Law School bankruptcy class that Ms. Warren taught, in fall 1992. The student has remained loyal to her professor; Mrs. Tilson wrote in a letter to Ms. Warren last week that she had been “cheering from the sidelines as you rose to national attention for your excellent work on behalf of consumers.”

Both of the Tilsons sent letters to Ms. Warren last week, which they shared with me, seeking to set the record straight and asking her to remove her Facebook post.

The response? An aide emailed them: “She asked me to relay to you that she is removing the word ‘billionaire’ from the post, as you have indicated that is factually inaccurate. The senator has decided, however, not to remove the overall post.”

A spokesman for Ms. Warren declined to comment on the exchange.

When I spoke to Mr. Tilson on Monday, he said he felt that the senator had let him down in two ways: “Personally, I feel betrayed,” he said. “In recent years, I’ve really stuck my neck out by very publicly supporting her, the C.F.P.B., and a tough regulatory approach to banks — none of which wins me many friends — and this is how she repays me.”

Mr. Tilson added: “By engaging in factually incorrect, ad hominem attacks, she’s getting down into the gutter with Trump. This is misguided and counterproductive.”

Despite all of that, he said, “I still support her because I share her belief that banking should be boring.”

Naturally enough, he added, her Facebook post, coupled with her response, “certainly reduces my enthusiasm for her.”