Bernie Sanders, Martin O’Malley attack Hillary Clinton on Wall Street donors

DES MOINES, Iowa — The push for Wall Street reforms has created a major rift between Hillary Rodham Clinton and her two more liberal rivals for the Democratic presidential nomination, as she put the brakes on her drive to the left in the debate Saturday and fiercely defended her ties to the financial industry.

Mrs. Clinton’s cozy relationship with Wall Street, which has been a top donor to her over the years, has long been a bone of contention for the party’s left wing. It’s the main reason liberal activists tried to get anti-Wall Street crusader Sen. Elizabeth Warren into the race and hesitated to get behind Mrs. Clinton.

But her rivals, Sen. Bernard Sanders of Vermont and former Maryland Gov. Martin O’Malley, sharpened their attacks in the debate in an attempt to galvanize those activists against Mrs. Clinton, the front-runner and heavy favorite to win the nomination.

Mr. Sanders, an avowed socialist, and Mr. O’Malley, who implemented a left-wing wish list as governor of one of the most liberal states in the country, denounced Mrs. Clinton for being beholden to Wall Street and offering weak reforms.

“Not good enough,” Mr. Sanders retorted when Mrs. Clinton insisted during the debate that Wall Street opposed her plans that include prosecuting executives and seizing their bonuses.

“Let’s not be naive about it. Why over her political career has Wall Street been a major campaign contributor to Hillary Clinton?” asked Mr. Sanders. “Maybe they’re dumb and they don’t know what they’re going to get. But I don’t think so.”

He later said, “Now, why do they make millions of dollars of campaign contributions? They expect to get something. Everybody knows that.”

Mrs. Clinton defended herself by citing her work a U.S. senator from New York helping restore the financial district after the Sept. 11 terrorist attack that brought down the World Trade Center’s twin towers.

“I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy. And it was a way to rebuke the terrorists who had attacked our country,” she said.

Mrs. Clinton also pointed to her thousands of small donors that she said for the first time included a majority of donations — 60 percent — from women.

The former first lady, senator and secretary of state has aggressively courted female voters in her quest to be the first woman elected president. It’s part of her strategy to rebuild the coalition of young, minority and female voters who twice fueled victories for President Obama.

Mrs. Clinton also defended her proposals to crack down of risky behavior on Wall Street that contributed to the 2008 economic meltdown.

Her plan includes imposing a risk fee on the largest financial institutions to create a bailout fund in case of another crisis, closing a loophole in the Dodd-Frank financial reforms that allow banks to gamble with taxpayer-backed money through hedge funds and impose new rules on hedge funds, investment banks and other nonbank financial companies that she calls the “shadow banking system.”

But it doesn’t immediately break up big Wall Street banks, as proposed by Mr. Sanders, Mr. O’Malley and the party’s Warren wing.

Mr. Sanders and Mr. O’Malley advocate restoring the Glass-Steagall Act, parts of which were repealed during the presidency of Mrs. Clinton’s husband, Bill Clinton, to allow commercial banks to engage in securities trading.

Mrs. Clinton has not ruled out restoring Glass-Steagall, but she did not include the measure in her plans. She also argues that her proposals go further than the others because she tackles more than big banks.

“Secretary Clinton, when you put out your proposal on Wall Street, it was greeted by many as ’weak tea,’ ” Mr. O’Malley said. “It is weak tea. It is not what the people expect of our country. We expect that our president will protect the Main Street economy from excesses on Wall Street.”

Mrs. Clinton did not directly respond to the attack from Mr. O’Malley, who trails far behind Mrs. Clinton with poll numbers in the low single digits and has struggled to gain traction in the race.