Welcome back to The Stratosphere.

Today, I’ve got a new back-and-forth with Bill Cohan, who writes about some similar topics to me—Wall Street and 2024, along with the fate of Sam Bankman-Fried. If you’re not reading Bill’s coverage, sign up for it here.

Plus, if you’re reading Puck, you might be interested in this news that I broke the other day about the ouster of Rick Cruz, the C.E.O. of the philanthropy consultancy—and dark-money target of the right—Arabella Advisors.

See you all next Tuesday.

Teddy

I know this turf very well, but the Wall Street set is different, Bill, and as a former investment banker, you’re the perfect person to talk to about this. I’ve been spending a good amount of time over the last few months getting coffees and lunches with folks who have intel on the Wall Street political class, and you’re probably on speed dial with three-quarters of them. So riddle me this: Who do you think is the most powerful figure in finance right now, in the ’24 arena?

Bill: Obviously, most people on Wall Street are Democrats, although as you get closer and closer to the top of the pyramid, the political allegiances tend to—but don’t always—shift toward the Republicans. I also think we have to stipulate that it’s still relatively early, from a Wall Street perspective, to start committing to and backing candidates. Most Wall Streeters are more focused on the dearth of deals so far this year.

Having said all that, on the Democratic side of the aisle, it’s still bankers and financiers like Jamie Dimon, Blair Effron, and Larry Fink who are among the most prominent donors and political movers and shakers. There is also, of course, Robert Wolf, once dubbed Obama’s favorite investment banker, who has managed to stay close to Biden, too, at least if his Twitter feed is to be believed. And a twist of David Rubenstein, who seems to pop up every now and then.

In fact, Rubenstein provides an interesting recent example of at least how one man—albeit powerful, rich, connected and influential—is thinking about the 2024 election. In a talk he gave the other night, he threw out this very good and interesting suggestion, Teddy: that Biden should call up Trump and offer to pardon him for his federal crimes and to chat with prosecutors at the state level to get them to pardon him as well—but only if he agrees not to run for president in 2024 or ever again. If Trump were to agree to Biden’s deal, then Biden would agree to not run for president in 2024, opening up the field in both major parties for new, younger leadership, and putting behind us this long, national Trumpian nightmare. Now that’s creative dealmaking! What do you think, Teddy?

Teddy: That probably defines the chasm where politicians and business leaders can never quite connect: that may sound like a practical idea to some, but it’s pretty far-fetched, and I cannot imagine Donald Trump going for it. Meanwhile, Wolf is back at it again as a top bundler for the re-elect. Speaking of Dimon, the presidential chatter has always felt like a media-created pipedream, germinated by bored reporters and TV personalities and egged on by an egotistical banking C.E.O. Thoughts?

Bill: Dimon remains the biggest wild card on Wall Street when it comes to politics. Is there any real chance that he would throw his hat in the ring this presidential cycle, as Bill Ackman, the hedge fund manager, wants so desperately to happen? No. Jamie certainly has been saying the right things and has been giving speeches like an effective presidential candidate. But there’s no real successor to Dimon at JPMorgan Chase, so if he left in the near future, the market would freak out. I don’t see it. Sorry, Bill.

When it comes to the Wall Street Democrats, though, I like to keep an eye on Effron. He’s smart, charitable, and has built a great business at Centerview Partners—it’s set up for the long-term, whenever he and his co-founder Robert Pruzan decide to hang up the cleats. Effron’s also someone who could easily be extremely helpful in a second Biden administration, if Biden is lucky enough to get a second bite of the apple.

I also have to believe that politicians of all stripes in Washington would be smart to chat with Hank Paulson, the ex-Treasury secretary and former C.E.O. of Goldman Sachs. Hank is one of the smartest guys I know and is very calm and rational under pressure (although he occasionally had to throw up a few times during the 2008 financial crisis). Our political discourse would be a lot more palatable if more Republicans and Democrats would listen to Hank.

On the Republican side, I still think you’ve got to be talking about Steve Schwarzman, Ken Langone, and Leon Cooperman. These guys have plenty of money and put it where their mouths are when it comes to politics. I’m not sensing a lot of love from these guys for Trump 2.0, but am sure they will end up supporting him if he’s the nominee, in or out of a prison cell.

Teddy: I’d argue that Ken Griffin is more powerful than any of the folks you mentioned. He’s always been a politically aware center-right rich guy, sure, but he’s ascended to a new level on the G.O.P. Mount Rushmore after Trump’s ouster. I’ll go so far as to say that Griffin is one of the two most important donors in the Republican primary, alongside Larry Ellison.

Griffin is also the biggest possible donor behind Ron DeSantis—don’t think too hard about the Citadel team’s recent insistences about how he is still “assessing the field,” which isn’t much different from what he’s said publicly since the very beginning of the race, and I read as Griffin merely maintaining his optionality. We’ll see later this month whether he has yet cut a check to the DeSantis super PAC, but Griffin has a limitless appetite for politics these days—he spent $54 million to defeat J.B. Pritzker’s income tax initiative in Illinois—and I bet he’ll end the cycle as the G.O.P. primary’s top spender, next to Ellison. And that’s not even counting the money that Griffin can mobilize from other aligned donors through the American Opportunity Alliance, the Wall Street-heavy donor consortium that Griffin helps lead alongside Paul Singer and Chuck Schwab.

Bill: Well, Teddy, there’s no question that Griffin is throwing his considerable weight and money around these days. He’s one of the richest men on Wall Street, with an estimated net worth of $37 billion. And he’s not shy when it comes to real estate, especially in Florida, where he’s spent a large fortune on homes and properties in both Palm Beach and in Miami. Not sure exactly how he’s planning to live in both Florida cities at once—although I gather Palm Beach is for his mother, maybe—but that’s a high-class problem.

No wonder, though, that he’s become a big supporter of DeSantis, although what anyone sees in that guy is a mystery to me. In a podcast the other day, my friend, The Mooch—Anthony Scaramucci, the SkyBridge Capital founder—compared DeSantis’s personality unfavorably to his office chair. I think Griffin is wasting his money on DeSantis, not that he’d notice.

Teddy: Griffin likes the limelight more than most mega-donors (sorry Bill, Mooch doesn’t qualify as a mega) and he is the kind of billionaire who says out loud what other givers think privately. I wouldn’t bet on DeSantis right now either, but the reality is that lots of G.O.P donors are almost settling from the outset of the primary, rather than compromising only after Iowa or New Hampshire. DeSantis is further to the right than plenty of his contributors, but these establishment types see him as the only game in town if you want to beat Trump. Like our bud Peter Hamby, I am not a buyer of the Tim Scott hoopla from the Wall Street establishment, though I did find Schwarzman’s max-out check to him last quarter mildly interesting.

If Trump ends up as the nominee, wouldn’t a lot of Wall Street types be happy with a No Labels ticket? I don’t care who you put up there: Manchin, Hogan, Dimon, an anonymous rich C.E.O. who thinks abortion rights are important but uh, the Trump tax cuts were good, too. We can debate the extent to which it’s a political fever dream, but I’d love to know how much of the No Labels’ ballot-access push—a $70 million initiative—is funded by your homies on Wall Street, like Schwarzman. No Labels insists it isn’t a political party so it hasn’t registered as one, meaning we don’t have any visibility into its donors.

Bill: I actually don’t think Wall Street will sign up for the No Labels show. Wall Street isn’t a big fan of kooky Joe Manchin. I also don’t see Jamie Dimon going the No Labels route. That’s not his style.

Teddy: The can’t-we-all-just-get-along vibe is very Wall Street, though.

Bill: Here’s the truth about Wall Street: the vast majority of people there hate Donald Trump and will not do anything that might risk helping him. So no No Labels,Teddy. I just don’t see it. What Wall Street likes is gridlock. They want a president of one party and at least one house of Congress under the control of another party, to make sure it becomes very difficult to get anything of substance done, or to change much of anything. That way Wall Street will know the rules of the road and operate according to them for a chunk of time.

Bill: Having read carefully the two reports that John J. Ray III filed with the Delaware bankruptcy court during his eight months as the C.E.O. of FTX, debtor-in-possession, I wouldn’t want to be S.B.F. right now. In his second report, Ray lays out example after example of S.B.F. saying one thing—lawful, responsible behavior—and doing another thing, what appears to be illegal, criminal behavior, and outright thievery. (S.B.F. has maintained his innocence.) I think this is what attorneys like to call mens rea, acting criminally in a premeditated way and something the federal prosecutors are going to have to prove that S.B.F. did if they want to convict him for his alleged crimes at trial.

Teddy: Premeditation goes beyond him merely “fucking up,” as he was prepared to put it in his congressional testimony. I guess that’s what the Signal messages, the diaries and the witnesses—including his former co-executives, Caroline Ellison and Gary Wang, who have already pleaded guilty—are for.

Bill: It’s never easy to prove mens rea, but if the evidence that Ray has uncovered—emails, documents, tweets—hold up, I’m afraid S.B.F. may be going away for a long time. But you’ve spent as much time with him recently as anyone: Why hasn’t he taken a plea, assuming one was offered to him? Why is he still maintaining his innocence? I am not sure he has much of a case to make for himself here based on all the evidence that I have seen. I know there are always two sides to a case. But the documentary evidence that the federal prosecutors and Ray have unearthed so far looks pretty damning. Hard to misinterpret emails and texts and tweets, especially when they directly contradict his other public statements. Does he really think he has a chance to walk away from this mess?

Teddy: He does. I think the strategy boils down to the “fuck up” defense, Bill—that everything (OK, not everything) in the Ray report about his malfeasance is true, but it’s because he was overextended and too comfortable with risk and didn’t think through the consequences of his actions. When you strip away the technical arguments that his team will make, the crux will likely be there was no intentional fraud, and that he might even be a victim—of Changpeng Zhao at Binance, of the bankruptcy lawyers at Sullivan & Cromwell, and of a vicious Damien Williams team of vipers in the U.S. Attorney’s office that is making people plead to crimes they didn’t commit.

Delusional? Maybe. But it’s not strategic positioning—Sam genuinely believes in his innocence. Even if it was strategic positioning, it also seems unlikely to think that a plea deal would ever be on the table given the scalp that Williams seems to think he has in his pocket.

Bill: The I-didn’t-realize-I-was-fucking-up defense is going to be a tough one to prove. It’s hard to imagine that the more than $8 billion that was siphoned out of customer accounts into Sam’s hedge fund and bank account (in the form of loans that he doesn’t seem eager to pay back) was an innocent mistake. That’s a shitload of money to swipe innocently. It’s also not a great look that many of your direct reports have pleaded guilty and are helping the government build a case against you. I’m still kind of amazed by his resilience in this situation.