Big donors give far and wide, influence out-of-state races, issues

Introduction

The focus on billionaires’ and corporations’ contributions to Super PACs this year has highlighted the impact of the rich and powerful on the presidential campaigns.

But an analysis by the Investigative News Network of contributions by wealthy individuals in seven states shows that their giving is greater than any one cause or race reveals — with millions flowing into state, federal and even local campaigns, parties and committees far and wide.

Take Colorado software entrepreneur and gay rights activist Tim Gill. He has given $450,000 to Colorado independent expenditure committees so far this political cycle, which began in 2011. He’s also given generously out of state —$100,000 to the Ohio Democratic Party Executive Committee and $25,000 to the Iowa Democratic Party—and smaller amounts to 26 candidates and causes in that time, from President Barack Obama to Colorado Governor John Hickenlooper, to candidates running for the Colorado state house.

All told, Gill, who did not respond to a request for comment, has doled out nearly $3.7 million to state and federal causes and campaigns in the past five years, making him the largest political donor from Colorado who wasn’t funding his own campaign.

Gill is no exception.

Wealthy Iowans put most of their money into causes at home, but they have also donated to candidates, parties and causes in New Jersey and Washington state this election cycle. Likewise, donors from Missouri have given to political parties and campaigns in Tennessee and Indiana. Money from Vermont has flowed into Wisconsin, from Colorado into Pennsylvania, from Massachusetts to Washington State and from California into Georgia. Donors in all seven states examined for this report gave to Governor Walter Scott’s successful campaign to beat a recall election this summer.

The findings illustrate what Michael J. Malbin, director of the Campaign Finance Institute in Washington, DC, has been seeing in his own research.

“Politics is becoming increasingly national,” said Malbin, the author of several books and a professor at the Rockefeller College of Public Affairs and Policy at the University at Albany, SUNY in New York. “Means of communication, fundraising and also campaigning are becoming national — and it’s affecting state and even local races.”

This is different from the century-plus-old participation by national corporations and labor unions in state politics, he said.

“There are a much broader variety of actors, often ideologically motivated, who are involved now. And they can bring resources to bear that can overwhelm local resources,” he said. “It does create questions about representation that could be troubling.”

There is no single government database that captures all of the contributions by any prolific donor. They are recorded in piles of reports to federal and state elections officials by the campaigns and causes that have received the money.

To get this rare, comprehensive look at the top donors in seven states, the Center for Responsive Politics, which collects and analyzes contributions on the federal level, and the National Institute on Money in State Politics, which gathers and studies contributions in state races, merged their data on the top donors. The organizations, both members of INN, looked at donations to and from California, Colorado, Iowa, Massachusetts, Missouri, Pennsylvania and Vermont. The data do not include so-called “dark money” contributions to 501(c)(4) social welfare nonprofits, which are exempt from campaign disclosure requirements.

Supplemented with reporting by INN-member newsrooms across the country, the analysis showed that looking at state and federal donations together gives a more complete picture of the most generous political contributors in each state —and where their money is going. In some cases, to look at only one would grossly misrepresent who the top donors even are.

The list of top donors to state campaigns and causes in Massachusetts and Vermont would be different from the list of top donors in those states to federal candidates, parties and causes – which is where they sent most of their political contributions.

In Colorado, Iowa and Missouri, the situation is reversed. The biggest contributors donated the largest sums to state candidates and issues.

Of California’s top 10 donors in 2011 and so far in 2012, four contributors gave overwhelmingly to state causes and campaigns while the other six have given most heavily on the federal level. Only by merging both sets of records does the
full picture of the state’s most active political contributors emerge.

San Francisco hedge fund manager Thomas Steyer, for instance, gave nearly $22 million this year to support a ballot initiative he’s spearheading that would force corporations with operations out of state to pay more California taxes. Another top California donor, DreamWorks founder and CEO Jeffrey Katzenberg, has given relatively little to California campaigns and causes this cycle, around $10,000—but has donated $2 million to the top Super PAC supporting Obama, Priorities USA Action.

Some wealthy individuals give so broadly that it’s only by looking at contributions across states and federal campaigns that the full breadth of their political reach is revealed.

Retired ING Insurance Executive Fred Hubbell has donated just shy of $102,000 in this election cycle — divided about evenly between state and federal causes and campaigns. He gave much of it in $1,000-or-smaller contributions to individual Democratic candidates in his home state of Iowa.

The analysis also illustrated how fluidly money moves across states.

In the 2012 election cycle, New York billionaires George Soros and Michael Bloomberg and Chicago billionaire Nick Pritzker, whose family owns the Hyatt hotel chain, were among the single biggest donors to three ballot initiatives in California in 2012, with donations of about $500,000 each. (Disclosure: Soros’ Open Society Institute is among the nonprofit Investigative News Network’s funders.)

The trio donated, respectively, to the Committee for Three Strikes Reform, which seeks to limit the use of life sentences to violent third strike offenses; Californians for a Cure, which sought to increase cigarette taxes to fund cancer research (the proposition was narrowly defeated this summer); and Taxpayers for Public Safety, which is trying to repeal California’s Death Penalty.

“Criminal justice is an issue that George Soros had been concerned about for many years,” said his spokesman Michael Vachon. “And what happens in California is relevant. It’s a bellwether state. California immigration policy, prison reform, all kinds of things that happen in California tend to have a ripple effect through the country.”

Bloomberg spokesman Marc LaVorgna said public health initiatives are a key issue for the mayor of New York and “he has always been willing to back up his support with contributions.”

Pritzker said through a spokesperson that he feels it’s “high time” California gets rid of its death penalty, as Illinois has.

“Economic and moral reasons compel the conclusion that life without possibility of parole is far superior to the death penalty,” he said. “The entire country should be interested in this referendum in the largest state in the country.”

While some would cringe at wealthy individuals influencing laws in states where they don’t live, Candice Nelson, chair of the Department of Government at American University and an expert on campaign finance, said there’s another argument.

“If you believe in a cause, why should you only be able to give to a cause in your state?” she asked.

She said a deep look at individuals’ donations gives an indication not only of the causes that matter to them, but also of their social and political networks and what seats are in play that are seen as having national importance.

“It gets to the question of the network, of who’s asking who for money,” Nelson said.

Bill Stetson, who together with his wife and daughter is the heaviest donors from Vermont this political cycle, said his personal friendships often motivate his donations.

“If you have the money to give, just as is the case with giving to charities and nonprofits, you must give to candidates you believe in — or who’s going to support those candidates? What kind of people will be in Washington and Montpelier?” asked Stetson, an environmental policy consultant. He said he donates principally to environmental causes and candidates who support them, regardless of party or state lines.

The Stetson family has donated more than $200,000 to the national Democratic party and Democratic party committees in a long list of states: Florida, Ohio, Pennsylvania, Colorado, North Carolina, Nevada, Michigan, and New Hampshire. Jane is the finance chair for the DNC and a significant Obama bundler.

The INN analysis also showed the impact of state limits.

Vermont caps individuals’ donations to a maximum of $2,000 to state candidates and Political Action Committees. So far this year, the Stetsons have given only $9,000 to state campaigns and causes, even though they are close to prominent state politicians like former Vermont Governor Howard Dean.

By comparison, Missouri’s top donor, St. Louis financier Rex Sinquefield, has spent nearly $7 million in political contributions already this election cycle, much of it to fund committees that seek to eliminate the Missouri’s state income tax and phase out the state control of St. Louis Police Department through ballot measures. Missouri is one of four states with no campaign contribution limits.

A multi-millionaire who won’t divulge his net worth, he has given a total of $21.5 million since 2008.

But state limits aren’t the only determining factor.

Iowa doesn’t limit state contributions either and the biggest donor there so far this campaign cycle, real estate businessman Bill Knapp II, gave a comparatively small $199,850.

One other factor could be at play: Unlike Missouri, Iowa does not have an initiative process for ballot measures.

Iowa still has its share of contentions issues. It is a battleground state for the presidential election and a state Supreme Court retention vote has drawn interest — one of the justices facing voters backed a 2009 decision legalizing same-sex marriage, angering conservatives.

As a result, it has been getting donations from out-of-state donors, large and small.

Chicago millionaire and Democratic supporter Fred Eychaner donated $25,000 to the campaign of Iowa Senate candidate Michael Gronstal in September 2011, making him the campaign’s largest single contributor. Florida businessman Gary Chartrand gave $50,000 to the Iowa Republican Party in November. It also received $15,000 from Susan and Howard Groff, who own a construction equipment rental company in California called Northwest Excavating. State candidates and parties in Iowa have also received donations from residents of New York, Texas, Michigan, and a number of other states.

According to the party, they’re giving of their own initiative.

“Some Republicans, in say, California, will donate to help the Republican Party [in Iowa] because they feel it will go further than if they donate where they live in a more Democratic state,” said Megan Stiles, spokesperson for the Iowa Republican Party. “But in terms of seeking out-of-state donations, we haven’t really been doing that.”