Billionaires boost Republican governors group past Democrats in fundraising

Introduction

The Republican Governors Association heads into a crucial election year having outraised its Democratic counterpart $50.3 million to $28 million in 2013, thanks largely to donations from corporations and billionaires like industrialist David Koch.

Koch, hedge fund chief Paul Singer, casino mogul Sheldon Adelson, and Leslie Wexner, CEO of the Limited Brands, each donated more than $1 million to the group last year while tobacco company Reynolds American, Koch Industries and health insurer Wellpoint each contributed more than $500,000, according to Internal Revenue Service records posted Friday.

The cash advantage is welcome given the challenges facing the RGA’s leader.

New Jersey Gov. Chris Christie, the RGA chairman, is embroiled in an ongoing scandal in his home state that could make it hard for him to bring in cash and votes in a year when 36 governors’ races are on the ballot.

With members of his party calling for him to step down, Christie may have trouble matching the Midas touch of former Mississippi Gov. Haley Barbour, who raised a staggering $87 million to help the party capture five new governorships in 2010.

In addition, two of the RGA’s most reliable and generous donors — Texans Bob Perry and Harold Simmons — died in 2013. Perry was the RGA’s most generous benefactor, contributing more than $12 million over the past five years, half the total in 2010 alone.

While the RGA will likely still outraise the Democratic Governors Association, it will have to contend with a motivated union political machine that combined with the DGA actually accounted for more outside spending than the RGA in 2012.

And money certainly doesn’t guarantee success at the ballot box.

“You can’t just buy these elections,” said Kyle Kondik, a political analyst at the University of Virginia’s Center for Politics. “There are all sorts of other factors that go into it.”

2014 outlook

The early read on 2014 elections is that the Democrats are better poised to win back a few of the governorships they lost in 2010.

Recent polls show that fewer than one in four Pennsylvania voters believe Republican Gov. Tom Corbett deserves a second term, while 46 percent of Florida voters prefer Democratic-challenger (and former Republican governor) Charlie Crist to incumbent Republican Gov. Rick Scott. Maine’s GOP Gov. Paul LePage, meanwhile, faces a three-way race without a clear-cut favorite.

“The Democrats definitely have some seats to pick and choose from where they have a real chance of winning,” said Lou Jacobson, the deputy editor of fact-checking website PolitiFact and a gubernatorial handicapper for Governing magazine.

The most vulnerable Democrats, meanwhile, appear to be Illinois Gov. Pat Quinn and Colorado Gov. John Hickenlooper, according to recent polls by the left-leaning Public Policy Polling. Arkansas, where Democratic Gov. Mike Beebe is stepping down due to term limits, is also a toss-up.

Democrats’ advantage going into this election year is in part a logical byproduct of Republicans’ success in consolidating power in 2010. The GOP controls 29 governorships across the country and 22 are being contested this year.

“There’s just naturally going to be more targets for the party that doesn’t hold quite as many seats,” said Kondik, of Virginia.

Even so, he said that with 29 of the 36 elections featuring incumbents, there’s likely to be less change than in 2010, when only 13 incumbents were running.

The RGA and DGA are what’s known as “527” groups. They can accept unlimited donations from labor unions, corporations and individuals, but cannot make donations to federal candidates. They can, however, have an impact on the states, where campaign finance rules are often much looser.

Maintenance costs

Broadly speaking, the RGA’s top donors are billionaires and corporations. The DGA relies more on labor unions, but also sees its share of corporate money as CEOs hedge their bets.

Even without Perry and Simmons, the RGA has plenty of big-money benefactors including Koch and Adelson.

Meanwhile, the DGA received first-time donations from billionaire hedge fund managers Paul Tudor Jones and Thomas Steyer, who each gave $250,000.

Still, the group’s largest donors in 2013 were labor unions and pharmaceutical companies. The International Association of Firefighters and the American Federation of State, County and Municipal Employees, donated $400,000 and $375,000, respectively, while the drug industry’s top lobbying group, the Pharmaceutical Research and Manufacturers of America, donated $325,000.

The heavy corporate and union backing of the groups has raised questions in the past about whether the organizations have avoided bans on corporate and union contributions in state races through the use of a Byzantine network of state and federal finance political action committees.

Since 2000, the RGA has given more than $50 million directly to candidates, according to data from the National Institute on Money in State Politics, while the DGA has given nearly $29 million.

The Center reported that in 2010 the Washington, D.C.-based RGA routed $1.5 million first through its state affiliate in Wisconsin and then to its state affiliate in Pennsylvania before the money found its way into Corbett’s campaign war chest. Corporate donations are illegal in both Wisconsin and Pennsylvania.

That shuffling of funds is fairly common to both groups, said Ciara Torres-Spelliscy, an assistant professor of law at Stetson University who researched their activity between 2002 and 2010.

“It looks like both of the groups [are] really skirting the line,” she said.

It’s now much easier for the RGA and DGA to spend money in the wake of the U.S. Supreme Court’s Citizens United ruling, which invalidated state bans and limits on outside spending by corporations and unions.

The spending often comes from groups that do not reveal their backers, and use the funds to buy negative television ads and mailers. These groups are not permitted to coordinate with the candidate, however.

Those rulings have contributed to a spike in outside spending at the state level. Outside groups, led by the RGA and DGA, spent more than $209 million in 2012 and the amount is expected to be much greater in 2014.

It’s not clear yet whether Christie’s fundraising abilities will be hampered by the ongoing political scandal in his home state.

If he were to step down in response to the scandal, he wouldn’t be the first governor to do so. Then-South Carolina Gov. Mark Sanford abdicated the position after revelations that he had secretly visited his mistress in Argentina while claiming to be hiking the Appalachian Trail.

Sanford’s departure ushered in Barbour, and with it the most lucrative fundraising period in RGA history.

John Dunbar contributed to this report.