Representative Walter Jones was a rare Republican who backed tough banking regulations after the 2008 economic collapse. Now Wall Street wants him out of office.

JPMorgan Chase (JPM) & Co., Bank of America Corp. and Wells Fargo & Co. (WFC) are lining up behind Jones' primary challenger, Taylor Griffin, an aide in President George W. Bush's Treasury Department who later worked for groups that advocated in Washington for the biggest financial services companies.

"I doubt anyone in North Carolina needs me to point out this is a Wall Street bank hit job," said Jeff Connaughton, a former Democratic Senate aide who worked on parts of the 2010 Dodd-Frank financial regulation law and wrote the book, "The Payoff: Why Wall Street Always Wins."

The May 6 Republican primary showdown in North Carolina's 3rd Congressional District is a rare example of industry funding a challenge to an incumbent, a tactic most companies flinch from because it could invite a legislative payback if it fails. The incumbent re-election rate in the U.S. House is typically around 95 percent.

Corporations, which make donations through political action committees financed by voluntary contributions from company executives, "rarely intervene in primaries on behalf of challengers," said Bill Allison, the editorial director of the Sunlight Foundation, a Washington-based nonprofit that tracks campaign spending and lobbying.

"So the fact that they have given up on the incumbent and gone so far as to support a challenger really says that they're looking to flip the seat to somebody more amenable to their views," he said.

Glass-Steagall Support

Opposition to Jones, 71, extends beyond his support for the Dodd-Frank Act, which is intended to reduce risk and increase transparency in financial markets. He is also pushing to reinstate a 1930s law that separated commercial and investment banking, known as the Glass-Steagall Act.

"I didn't vote for the bailout of the banks. I think the big ones should have failed, but that's history now. Congress did bail out the banks, and I think that if we're going to have a strong banking system, we must reinstate Glass-Steagall," Jones said in 2011 in an interview with the LaRouche PAC, a group tied to Lyndon LaRouche, a former presidential candidate.

Jones, whose campaign didn't respond to interview requests, has said his "two worst votes" in his 19 years in office were to authorize the U.S. war in Iraq in 2002 and for the 1999 repeal of Glass-Steagall.

Dodd-Frank Allies

He was one of just three House Republicans to support Dodd-Frank. The other two were defeated in 2010 campaigns. Representative Joseph Cao, who served a predominantly Democratic Louisiana district, lost a re-election bid; Representative Mike Castle was upset in a Delaware Republican U.S. Senate primary to Christine O'Donnell, a favorite of the small-government Tea Party movement who lost the general election.

Jones, whose father served in the House from 1966 until his death in 1992, has irked his colleagues in other ways.

In February 2013, he said President Lyndon B. Johnson is "probably rotting in hell" over the Vietnam War and "probably needs to move over for Dick Cheney," who advocated for the Iraq War as Bush's vice president. A decade earlier, as a backer of that war, Jones had the French fries served in congressional cafeterias renamed "Freedom" fries after France opposed the U.S. invasion.

Anti-War Sentiment

Jones's turn against the war began after he attended the funeral of Marine Sergeant Michael Bitz, who had been based at Camp Lejeune, which is situated in Jones's district. Bitz, 31, left behind three children, including twins born after he was deployed.

"That preyed on my heart for a long time," Jones said in a 2005 Bloomberg interview.

Jones at the time also said he'd taken to writing letters to families who lost loved ones in the Afghanistan and Iraq wars — including many in his district.

Jones opposed Ohio Republican John Boehner's re-election for House Speaker in 2013, and he didn't back a federal budget blueprint written by Representative Paul Ryan of Wisconsin, saying it wasted money on foreign aid and wars.

In December 2012, Republican leaders fed up with his antagonistic tactics kicked Jones off the Financial Services Committee. That's a credit to him, say his supporters.

"Walter cannot be intimidated," said Ferrell Blount III, a former state Republican chairman who's backing him. "You might not agree with Walter all the time, but one thing rest assured, he votes his convictions from the heart."

Jones's opponents say he's lost his ability to represent the district effectively.

Lost Influence

"Walter's desire to be such an obstructionist to the speaker's efforts costs us in our ability to really have our issues of concern heard," said Scott Dacey, a Craven County commissioner who considered challenging Jones before aligning with Griffin.

In a breakfast interview last week, Griffin, 38, identified reducing the district's unemployment — 12.2 percent in a 2012 U.S. Census Bureau survey — and improving the local transportation infrastructure as top priorities. He warned against "complacency" amid a shrinking federal budget deficit, and he's using the Dodd-Frank vote to criticize Jones.

Regulation Layers

"Most of Dodd-Frank is just a new layer of regulation that restricts our capital markets, makes the United States less competitive against our foreign rivals and hurts our economy in the long run," Griffin said. "People have to recognize that capital is the lifeblood of the economy, and restrictions on the free flow of capital harm the economy more broadly."

Griffin's ties to the financial services industry include serving as a senior vice president for the Financial Services Forum, a Washington-based trade group that represents the CEOs of the largest Wall Street banks, and as a co-founder of Hamilton Place Strategies, a Washington-based consulting group that counts several banks and trade groups among its clients.

Bank PACs helped Griffin raise $114,000 in the final quarter of 2013. It was a fundraising pace that was faster than any of Jones's prior challengers and one that bested the incumbent during the same quarter. Griffin had $87,000 in cash on Dec. 31, according to Federal Election Commission disclosure reports.

Griffin Donors

His individual donors include John W. Snow, Bush's former Treasury Secretary; Ari Fleischer, his former press secretary; and Haley Barbour, a lobbyist and former Mississippi governor.

Jones raised $274,000 in 2013, including $67,000 in the final three months of last year. His campaign had $127,000 in the bank on Dec. 31.

His donations include checks from the PACs of Lockheed Martin Corp. (LMT), General Electric Co. (GE) and Northrop Grumman Corp. (NOC), and local banker Mark A. Holmes, the president and chief executive officer of Greenville, North Carolina-based Select Bank & Trust Company. Holmes didn't return a call seeking comment.

Griffin, who is promising to serve no more than four terms, sold his interest in Hamilton Place Strategies last August and moved to New Bern, North Carolina, in September to run for Congress.

His biggest challenge is getting known throughout the 22-county district and persuading Republican voters he understands their concerns.

Kitty Hawk

The district had a median income of $44,026 compared to $51,371 nationwide in a 2012 Census survey. It includes the Outer Banks, the site of the Wright Brothers' first flight in Kitty Hawk, and an agricultural sector that's been hurt by storms.

Griffin tells audiences he was raised in Wilson, a city of about 49,000 people, and touts working for the late North Carolina Republican Senator Jesse Helms, who served in the chamber from 1973-2003, as his first job out of college.

While "a lot of people were skeptical" about Griffin's Washington background and familiarity with the district, he's "worked very hard to eliminate that identification," Bob Pruitt, a former local Republican chairman who's neutral in the primary, said in an interview after a party fundraising dinner Feb. 20 in New Bern that Griffin and 250 others attended.

The differences between Jones and Griffin raise the possibility that Washington-based activist groups, including super-PACs that can raise funds in unlimited amounts, will try to influence the primary vote.

"We're looking at the race," said Barney Keller, a spokesman for Club for Growth, a group advocating for limited government that met in November with Griffin in Washington. Jones has a lifetime voting-record rating of 56 out of 100 on the Club's scorecard, including 78 percent in 2013.

The Jones campaign's Facebook page trumpets his 95 percent rating for his 2013 voting record from FreedomWorks, another small-government advocate active in some Republican primaries. FreedomWorks didn't respond to a request for comment.

"I would think that if there were outside cash that were to come into this district and tilt one way or the other, it would have a profound impact on the outcome of this race," said Dacey.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.