• How outside money was poured into governors' races

    By Paul Abowd and Andrea Fuller, The Center for Public Integrity

    Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

    The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Democrats won seven of the 11 contests, but the GOP managed to pick up one seat in North Carolina, long held by Democrats.

    The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

    Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the latest Federal Election Commission reports, Adelson is the top donor to super PACs in 2012, doling out more than $93 million along with his family.

    Conservative billionaire David Koch — who has not made any contributions to super PACs — was the organization’s third-highest donor, writing two checks totaling $2 million. Koch is co-owner of the second-largest privately held company in America, Koch Industries, an energy conglomerate.

    Seven of the RGA’s top 10 donors are corporate executives who gave at least $1 million. Two of them, Paul Singer and Kenneth Griffin, are hedge fund managers.

    Six of the Democratic Governors Association's top donors were unions. The American Federation of State County and Municipal Employees topped the DGA donors list, giving about $1.3 million. The Service Employees International Union gave about $1.1 million, while the American Federation of Teachers gave at least $772,000.

    Top corporate donors to the DGA included pharmaceutical giants Pfizer, which gave almost $700,000, and AstraZeneca, which contributed nearly $600,000. The companies also gave comparable sums to the RGA. The DGA also got corporate support from health insurer United Healthcare Services Inc., and AT&T.

    The DGA raised nearly $50 million, the organization's "strongest fundraising year ever," according to spokeswoman Kate Hansen. 

    'Enormous impact on state elections'
    The DGA and RGA have devised national strategies for collecting unlimited funds from unions, corporations, and wealthy individuals, and funneling the money into state races. Both have used networks of state-based PACs to maneuver around various state limits on campaign giving.

    “They’ve had an enormous impact on state elections across the nation,” said Ciara Torres-Spelliscy, an election law expert at Stetson Law School. “In many states they were consistently a top spender.”

    The circuitous methods used by both organizations to inject corporate and union cash into state races and mask the identity of its donors have raised legal questions, prompted lawsuits, and tested the capacity of state election boards to enforce limits on outside spending.

    Both organizations have told the Center for Public Integrity that they fully comply with campaign finance laws, and that they report their donors and spending to the IRS.

    The RGA set up a federal super PAC called RGA Right Direction, and fed it with $9.8 million in contributions. The super PAC — another type of organization that can accept unlimited donations from individuals and corporations — then made a large contribution to Indiana Republican candidate Mike Pence, and bought ads in tight state races in Montana, Washington, New Hampshire, and West Virginia.

    Super PACs are normally used to spend money on federal campaigns. By passing the funds through the super PAC, which reported its sole donor as the RGA, the association effectively shielded the identities of the donors who paid for ads in the state races.

    In North Carolina, the RGA spent millions of dollars, directly from corporate treasuries to win in a state long led by Democratic governors. The unlimited contributions from dozens of corporations across the country went toward ads supporting Republican candidate Pat McCrory, who won convincingly over Democratic Lt. Gov. Walter Dalton.

    The DGA, too, used a network of state-affiliated PACs, to fund ad campaigns in battleground states like Montana and North Carolina. It was the primary funder of a PAC called North Carolina Citizens for Progress, which purchased ads attacking McCrory.

    While America’s wealthiest corporate executives tend to prefer the RGA, and unions give almost exclusively to the DGA, some donors played both sides this election.

    Agricultural giant Monsanto, credit card company Visa and health insurance company Humana were large donors to both the RGA and DGA — each giving about $100,000 to both groups.

    Despite the Republicans' win-loss record, RGA spokesman Michael Schrimpf called 2012 "a successful year by any standard" with Republicans now in control of governorships in 30 states. Most of those gains, however, came in 2010. The North Carolina win and the failed effort to recall Scott Walker, Wisconsin's Republican governor, in June, were high points for the GOP this year.

    In addition, in five states targeted by the RGA where it lost, the Democrats held advantages unrelated to fundraising. 

    Missouri and West Virginia featured Democratic incumbents. Three other states — Montana, Washington and New Hampshire — had open seats where a Democrat had previously been in power.

    The two organizations will put their fundraising powers to the test again in 2013, when Virginia and New Jersey choose their next governors.

    Michael Beckel contributed to this report.

    The Center for Public Integrity is a non-profit independent investigative news outlet.  For more of its stories go to publicintegrity.org

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  • In Calif. redistricting experiment, how much better off will Democrats be?

    By Tom Curry, msnbc.com National Affairs Writer

    In two weeks, California voters will take part in an intriguing electoral experiment –and while House Democrats are likely to emerge better off from it, the question is how much better off? Will they see a net gain of two or three House seats? Or perhaps a five, six, or seven seat score?

    When Californians cast their ballots in the June 5 primary, they’ll be in new congressional districts drawn not by political insiders, as was done in the past (and as is still done in most states), but by a citizen panel.

    Map of California's redrawn congressional districts.

    For decades, House members and their allies in the state legislature used gerrymandering to protect incumbents of both parties. That changed when voters adopted citizen redistricting in 2008.

    As governor, Republican Arnold Schwarzenegger “pushed redistricting reform for the purpose of creating competitive seats” and “Republicans had dreamed that the whole state would become competitive as a result of this process,” said Bruce Cain, professor of political science at the University of California, Berkeley, and an expert on redistricting in the state.

    Three other ingredients are being added to that redistricting experiment: the retirement of seven incumbents (four Republicans and three Democrats) from the California delegation, a 28 percent increase in the state’s Latino population since 2000 (although the increase in actual Latino voters doesn’t necessarily match the increase in the overall Latino population), and a new top-two balloting system under which only the leading vote-getters in each congressional primary advance to the November ballot.

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    Only one seat in California changed hands in the last ten years, but according to the latest ratings from the non-partisan Cook Political Report, there are now four Democratic and five GOP House incumbents in competitive districts. At this same point after redistricting in 2001, Cook rated only two California House races as competitive.

    “The redistricting definitely favored the Democrats and nobody who has analyzed it thinks differently,” said Cain. “It would be shocking if the Democrats don’t pick up some congressional seats,” he said, but added, “I’d be surprised if the Democrats do better than (a net gain of) four or five.”

    “California has been a fairly stable market for congressional races over last decade,” said Dan Conston, the communications director for the Congressional Leadership Fund, a Republican Super PAC that had more than $5 million in cash as of April 15 to spend on House races.

    “Under the new maps, the entire field has been shaken up and California will now be one of the key battlegrounds for control of the House for the next decade,” he said.

    Roll Call's Nathan Gonzales and Cook Political Report's David Wasserman talk about redistricting and whether Democrats can win back the House.

    Conston added, “When you consider the national battlefields, it is clear that if we perform well in California, it is very difficult for Democrats to have any shot of reclaiming the majority.”

    Thanks to the Citizens United decision in the U.S. Supreme Court, and other federal court rulings, mega-donors in California and elsewhere can give unlimited money to Super PACs (both Democratic and Republican) bypassing donation caps to candidates or party committees.

    Conston said that the number of newly competitive seats in California has “piqued donor interest. That is why we set up a separate fund within the Congressional Leadership Fund where all resources raised go to our California efforts.”

    Among the Democrats at whom Republican groups will be aiming their ads are Rep. Lois Capps and Rep. John Garamendi, both of whom will now be competing on less Democratic-leaning turf than their present districts.

    Leaders of the Democratic Super PAC, which works on House races, are also making California their focus.

    In its fund raising pitch to donors, the House Majority PAC said, “Democrats have the opportunity to go from a 34-19 majority in California to a 41-12 majority – a net gain of seven seats, nearly a third of what we need to retake the majority in the U.S. House of Representatives ... This may well be a once-in-a-generation opportunity.”

    But without a competitive presidential or Senate race in California, there will be no pull for Democratic voters from the top of the ticket. “This is particularly important in the Hispanic community – the presidential election will not be focused on communicating with these voters in California,” the fund-raising pitch said.

    All the more enticing for Democratic mega-donors to give to the House Majority PAC, which had nearly $1.7 million in cash on hand as of March 31.

    Like its Republican rival, it too has a California-specific fund and appeals to home-state pride in its pitch: “For a long time, California donors have dutifully contributed to Democratic efforts and that money has been spent everywhere but California. In 2012, California donors have the opportunity to fund critically important races right here in the Golden State.”

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    Initially, some Democrats – including President Barack Obama – denounced Super PACs and non-profit groups called 501c4s, which were given a new birth of fundraising freedom under the Citizens United decision.

    But “I don’t hear that (objection) as much (from Democratic donors) anymore,” said Ali Lapp, executive director of the House Majority PAC. “More and more, there are a lot of Democratic donors out there that totally understand that if we try to fight this fight with one hand tied behind our back, the country is not going to get any better.”

    Lapp said, “The way I think about, there are nine competitive seats in California ... Of those nine, I think we will win five or six – if we’re really lucky, seven. If we won only two, it would not be a happy day; we would have had a horrible election if we won only two of those nine.”

    One place where House Majority PAC had been spending money in recent weeks is in the new 26th Congressional District in Ventura County, where four Democrats and one Republican, state Sen. Tony Strickland, are running. So far, Strickland has outraised all other contenders by a wide margin.

    Also on the June 5 ballot is a former-Republican-turned-independent, county supervisor Linda Parks, who won a glowing endorsement from The Los Angeles Times which sees her as exactly the type of centrist pragmatist that reformers had hoped citizen-driven redistricting would promote.

    If Parks and Strickland are the top two finishers on June 5, Democrats will start the November campaign already one seat behind.

    “This is a lean-Democratic district that in November has a better chance of going for a Democrat than for a Republican,” said Lapp.

    “But because of the dynamics of the top-two primary system where you have an independent with very high name ID and you have a bunch of Democrats on the ballot, there was a very real chance we could be squandering this opportunity if we didn’t get involved and make sure that voters knew who Julia Brownley is, what she stands for, and that she is the leading Democrat in the race.”

    But that race is only one of the places where the House Majority PAC is likely to invest money.  “On June 6, we’ll see what the match-ups are and – knock on wood – we’ll get the strong candidates we’re expecting to get from all these districts,” Lapp said.