New Jersey’s next governor could be a Democrat who worked at Goldman Sachs

Key Points
  • Former Goldman Sachs executive and major Democratic donor Phil Murphy is the front-runner to become New Jersey's next governor.
  • Murphy has had to defend his more than 20 years at Goldman while pushing a progressive platform.
  • He has tried to avoid the shadow of the state's last Democratic governor, the unpopular Jon Corzine, who was Goldman's CEO before becoming a New Jersey politician.
Democratic candidate Phil Murphy, who is running against Republican Lt. Gov. Kim Guadagno for the governor of New Jersey, speaks at a rally on October 19, 2017 in Newark, New Jersey.
Bastiaan Slabbers | NurPhoto | Getty Images

In a political era marked by populism, a former Goldman Sachs executive and major Democratic donor is the front-runner to become New Jersey's next governor.

On Tuesday, New Jersey voters will choose between Democrat Phil Murphy and Republican Kim Guadagno, the state's lieutenant governor. Murphy, the former bank executive, holds a comfortable lead in all recent polls.

Murphy, 60, has had to defend his more than 20 years at Goldman while pushing a progressive platform. He has focused partly on boosting the working class and holding Wall Street firms in check. Murphy has also tried to avoid the shadow of the state's last Democratic governor, the unpopular Jon Corzine, who was Goldman's CEO before becoming a New Jersey politician.

While Guadagno has cast Murphy as an out-of-touch "Goldman Sachs millionaire," the association appears to have done little to hamper his chances. Still, it remains to be seen how Murphy's Goldman past would affect his ability to enact worker-driven policy in New Jersey.

Murphy's allies see a candidate who knows how to fix capitalism's flaws due to his work at the top reaches of the U.S. economy.

"I think he sees himself differently from some of the people who succeeded on Wall Street. I just think he sees the world differently than a lot of people on Wall Street do," said Howard Dean, the former Vermont governor who chaired the Democratic National Committee when Murphy led its finance arm.

The Murphy campaign did not respond to CNBC's requests for an interview or comment.

Associations with Goldman or other Wall Street firms have opened candidates to attacks in recent races. In last year's presidential election, President Donald Trump targeted both Democratic rival Hillary Clinton and Republican primary opponent Sen. Ted Cruz for connections to the firm.

Democrats have since hit Trump for filling the top ranks of the executive branch with wealthy former Goldman officials.

After the surprise success of Sen. Bernie Sanders' populist presidential campaign and struggles in 2016 national elections, the Democratic Party appeared set to embrace more progressive candidates.

Both Democrat and Republican rivals in the governor's race have criticized Murphy for failing to fit that mold due to his wealth amassed at Goldman.

After joining the Wall Street titan in the early 1980s, Murphy spent more than 20 years there. During his career, he led the firm's Frankfurt, Germany, office and served as president of its Asia division.

At Goldman, Murphy was reportedly renowned for his deal-making ability, which helped him advance through the company. His work in Asia, though, has sparked controversy.

A investigation by the Star-Ledger newspaper in New Jersey showed that his division profited from an investment in a shoe manufacturer that had dismal working conditions. Murphy's campaign denied he had a role in Goldman making the initial investment.

Before and after leaving Goldman in the mid-2000s, Murphy gave millions of his personal fortune to Democratic candidates and national and state party committees. He served as the party's finance chairman from 2006 to 2009, where he worked closely with Dean.

Dean said he liked Murphy "instantly" the first time he met him. He described Murphy as charismatic and smart and said he listens and manages people well.

After his DNC role, Murphy became the U.S. ambassador to Germany from 2009 to 2013. As a diplomat, he faced backlash over his sharp criticism of German officials in documents published by WikiLeaks. In one instance, he called German Chancellor Angela Merkel "insecure."

Murphy's campaign has largely downplayed his work at Goldman, his role in Germany and his past as a major Democratic fundraiser. The candidate for governor has highlighted his working-class upbringing. His campaign website says he made his way through Harvard University by working part-time jobs and taking out loans.

Guadagno has repeatedly cast Murphy as unable to identify with the average voter due to his wealth. At a debate last month, she called him a "Goldman Sachs millionaire" and tied him to Corzine, the state's "last Goldman Sachs governor."

Corzine lost his 2009 re-election bid to Republican Gov. Chris Christie as the New Jersey economy reeled during the Great Recession.

The attacks on Murphy's Goldman past have resonated little with voters, according to Patrick Murray, director of the Monmouth University Polling Institute. Murphy entered the race as a relative unknown, so Guadagno faced a challenge in educating voters about his past at the firm and then making them care about it, he said.

Guadagno "has not been able to make as much hay out of Murphy's past perhaps as she could have," Murray said.

In a Monmouth poll last month, only 28 percent of New Jersey voters said they associated Murphy with his Goldman career. Thirty-four percent said they were unaware that he worked there.

Seventy percent of voters said his Goldman work would have no effect on their choice for governor.

As a Republican, Guadagno has likely faced more headwinds because of Christie's dismally low approval rating, Murray added.

Murphy has struck a progressive tone in his campaign. Among other policies, he has called for investments in infrastructure and colleges, raising the minimum wage and mandating earned sick leave.

Murphy has pushed for creating a public bank and divesting New Jersey pension funds from hedge funds and private equity. He has also called for a "millionaire's tax" and more aggressive prosecution of financial fraud.

Dean contended that Murphy's experience on Wall Street has shown him why a progressive platform is necessary.

Said Dean: "Sometimes, it takes someone who knows capitalism to fix it. I think Phil completely gets that because he's been on both ends of that."