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Pence could hold back Trump's Wall Street fundraising

Republican vice presidential nominee Mike Pence (R) claps as presidential candidate Donald Trump gestures during the Republican National Convention at the Quicken Loans Arena in Cleveland, Ohio, on July 20, 2016.
Robyn Beck | AFP | Getty Images

Donald Trump's pick of Mike Pence as his running mate may have been meant to appease the Republican establishment, but don't expect it to quickly smooth relations with the corporate world.

In fact, Pence could very well hamper Trump's fundraising with corporations and Wall Street given his socially conservative record as an Indiana governor and "pay to play" laws that hamper state officials from fundraising from financial services firms.

Before he became governor of the Hoosier State, Pence racked up a business-friendly record in Congress, earning an 89 out of 100 lifetime rating from the U.S. Chamber of Commerce.

During the 2012 campaign cycle, Pence raised money from a number of corporate and financial service firms, including from then-President of Koch Enterprises Robert L. Koch II, according to federal filings. Pence's state campaign finance filings showed he has continued to receive some donations from the financial services sector.

As governor, Pence has pursued traditional corporate-supported policies such as opposing calls for a higher state minimum wage and supporting the state's right-to-work law.

"Gov. Pence has a strong pro-business record both in Congress and as Governor, and we hope he will continue to advance policies that will drive economic growth and job creation on the presidential ticket," U.S. Chamber of Commerce Executive Director of Media Relations Blair Holmes wrote in an email.

However, there are some signs Pence may not provide Trump a bridge to the corporate world and Wall Street, which have both so far been hesitant to fully embrace Trump compared to 2012 Republican nominee Mitt Romney. In fact, he may hinder those efforts.

Pence has served for more than three years as Indiana's governor, and has overseen a period of economic growth for the state. But his most high-profile episode may have been his signing of the "Religious Freedom Restoration Act" into law, despite strong opposition from state businesses.

"His cultural conservatism seemed to trump his pro-business inclinations, and that certainly got him in trouble with the business community in Indiana," said Geoff Layman, a political science professor at the University of Notre Dame. "Pence has stood out a little bit as an ideological zealot and a cultural warrior."

Marjorie Hershey, a professor of political science at Indiana University, echoed the point that Pence may be most closely identified with social issues, but said she did think he could play a role in reaching out to the corporate world.

"I'm sure that industry will not be panicked about Pence as a vice presidential candidate. They may be reassured, given a lot of the deficits of Trump," Hershey said.

Trump has bashed the corporate world in a way few Republican presidential candidates have before, calling the Chamber of Commerce a "special interest" and saying that rival Hillary Clinton would be "owned by Wall Street" as president.

There have been early signs that Pence could help bridge the gap between the Trump campaign and the Republican establishment, and he may be able to make inroads with corporate leaders with his modest demeanor and economic record as governor.

But when it comes to fundraising from Wall Street, Pence will likely hold back the Trump campaign.

Federal "pay to play" regulations prohibit donors to certain politicians from receiving advisory contracts for two years after the donation.

According to a Securities and Exchange Commission regulation: "The two-year time out is thus triggered by contributions, not only to elected officials who have legal authority to hire the adviser, but also to elected officials (such as persons with appointment authority) who can influence the hiring of the adviser."

The SEC declined to comment, but given that Pence appoints board members for Indiana's Public Retirement System pension fund and members of the Indiana Finance Authority, which issues bonds, this would appear to restrict the amount of donations Wall Street could give to a joint Trump-Pence ticket if they hope to receive specific state contracts.

Campaign law compliance attorney Kenneth Gross said the implications for Wall Street firms considering giving to the Trump-Pence ticket are both current and far reaching.

"If you're in the financial services industry dealing with a state, chances are you're covered by these laws and you're jeopardizing current business and, even more pernicious, you're putting yourself out of business for the next two years," Gross said.

In the past, similar rules were reportedly part of why Romney did not select New Jersey Gov. Chris Christie as his running mate in 2012.

Bob Grand, national finance chair for Pence's vice presidential campaign, said he believes corporations will look positively at Pence, while acknowledging a lack of "Wall Street strategy."

"He's raised more money here in Indiana than anybody had in recent history," Grand said. "He's got a great reputation, he's developing a lot of business."