Bloomberg helps Democratic governors’ group close gap on Republicans

Introduction

Editor’s note: The Center for Public Integrity is tracking political advertising in races for the U.S. Senate and state-level offices. Use these two, interactive features — with new data every Thursday — to see who is calling the shots and where the money is being spent.

A national Republican group devoted to helping elect GOP governors has outraised its Democratic counterpart by more than $20 million in the first nine months of this year, but reports filed Wednesday with the Internal Revenue Service show that the gap is narrowing.

Though the Republican Governors Association raised about $68 million through the end of September, the Democratic Governors Association has been catching up with a record haul of more than $45 million, fueled by labor unions and former New York City mayor, billionaire and political independent, Michael Bloomberg.

The groups were neck-and-neck in the most recent quarter, with the Democrats only a half-million shy of the Republican group, which counts energy companies and billionaires David Koch and Sheldon Adelson among its top donors.

Battling over 36 governorships up for election this year, the two Washington, D.C.,-based groups have used those donations to go head-to-head on the airwaves, contribute directly to candidates and fund other political groups.

They spend in their own names and through a network of subsidiaries, with names such as Right Direction on the Republican side and Jobs and Opportunity on the Democratic side.

On television alone, the groups and their state branches account for nearly one-third of all television spending by independent groups in state-level races.

The Republican group has used its fundraising edge to purchase an estimated $19.7 million in television ads in 16 states through Oct. 13, more than any other non-party group in the country, according to a Center for Public Integrity analysis of preliminary data from media tracking firm Kantar Media/CMAG.

The Democratic Governors Association has been the second-leading independent group, buying an estimated $12.3 million worth of ads in five states.

The Republican spending spree has been backed by multimillion-dollar donations in 2014 from a who’s who of Republican political donors.

Industrialist Koch, casino magnate Adelson and the private equity firm of 5-Hour Energy founder Manoj Bhargava each contributed $2.5 million through the end of September to the Republican Governors Association.

Private equity head Mike Shannon and his wife, Mary Sue, along with hedge fund manager Kenneth Griffin round out the group’s top five donors, at $2 million from the Shannons and $1.5 million from Griffin. Two energy companies, Devon Energy, at $900,000, and Duke Energy, at $775,000, are among the Republican group’s top 10 donors overall.

The top five donors to the Democratic group are all labor unions. The American Federation of State, County and Municipal Employees, or AFSCME, has given $3.7 million to the Democratic governors’ group this year, while the country’s two largest teachers unions, the National Education Association and the American Federation of Teachers, and their related political groups, have been the second- and third-largest donors, giving $2.8 million and $2.5 million, respectively. The Service Employees International Union and United Commercial Workers International Union each has given more than $2 million.

The unions have helped narrow the gap between the two political groups, especially in the final months leading up to the election. In 2010, the last time this many governors faced election, the Republican group held a $32.5 million fundraising advantage through the same period.

The biggest individual donor to the Democratic Governors Association is Bloomberg, who gave $1.1 million in September. It appears to be the first time he has contributed to either organization.

Bloomberg, a Democrat turned Republican turned independent, has also contributed nearly $7 million to Independence USA PAC, a super PAC active at both the federal and state levels that supports centrist candidates.

But the super PAC’s spending appears to be at cross-purposes with Bloomberg’s support of the Democratic governors’ group.

So far, the Independence USA PAC has spent more than $750,000 on TV ads supporting Rick Snyder, Michigan’s incumbent Republican governor. Meanwhile, aided by Bloomberg’s donation, the Democratic Governors Association has spent $7.2 million on ads mostly critical of Snyder.

The governors’ groups are what are known as 527s, tax-exempt organizations named for the IRS code they fall under, which can accept unlimited amounts of money from individuals, corporations and unions.

Both groups, which have been in existence for more than a decade, got a boost from the U.S. Supreme Court’s 2010 Citizens United decision, which, in conjunction with related federal rulings, removed restrictions on political spending by corporations and unions, and forced 24 states to revise their campaign finance rules.

Overall, independent groups have accounted for more than 20 percent of the estimated $495.4 million in spending on state- level races so far. That represents an increase compared to 2010, in which non-candidate and non-party groups accounted for only 12 percent of the $921.3 million spent.

Related: Big money is being spent in U.S. Senate elections, where the battle has turned negative.