Groups flush with out-of-state cash flock to Virginia governor’s race as testing ground

September 22, 2013

Wealthy donors and advocacy groups are using the Virginia governor’s race as a testing ground for next year’s midterm elections and for the 2016 presidential campaign, flooding the state with unprecedented levels of out-of-state spending.

Campaign contributions from Virginia residents and local businesses have been swamped by donations from individuals, corporations and interest groups based elsewhere, who are vying to influence the only competitive gubernatorial contest in the country this year.

Environmentalist Tom Steyer, former TD Ameritrade chairman Joe Ricketts’s son Todd and hedge fund manager Robert Mercer are using groups called super PACs to pump their personal resources into the state.

Americans for Prosperity, the influential conservative advocacy group backed by the billionaire Koch brothers, is using the Virginia race to refine its field program, hoping to improve on its performance in 2012. And independent opposition research groups such as American Bridge on the left and America Rising on the right have seized the chance to hone their candidate-tracking operations.

The outside cash is helping fuel a wave of attack ads sponsored by both independent groups and the candidates, deepening the negative tenor of the race.

See how much is being spent on campaign ads in the Virginia governor’s race.

The candidacy of Terry McAuliffe, a businessman and former chairman of the Democratic National Committee, has drawn numerous out-of-state players. Many have jumped in because they view the campaign as a key early battle that will help determine which way the state will go in 2016.

“Virginia is a very important state from a strategic standpoint,” said Steyer, a San Francisco-based hedge fund billionaire whose new super PAC, NextGen Climate Action Committee, has spent $900,000 on ads against Republican Ken Cuccinelli II. “It’s a swing state; it’s a purple state.”

The out-of-state money is crowding out funds from Virginians. Only about a quarter of the nearly $17.5 million in donations over $100 that McAuliffe received through Aug. 31 came from people or companies with a Virginia address. For Cuccinelli, who is Virginia’s attorney general, about 31 percent of the $10.8 million he received came from inside the state during the same period, according to an analysis by the Virginia Public Access Project, a nonpartisan group that tracks money in politics.

Those figures represent a break from past elections: Since 1997, every gubernatorial candidate has received at least 50 percent of his campaign money from Virginians.

The dominance of out-of-state funds demonstrates the increasingly high-profile roles being played by wealthy individuals and independent groups in elections across the country. Court decisions in 2010 freed corporations to spend money directly on federal campaigns and paved the way for the creation of super PACs, which can raise unlimited sums.

The rules are even looser in Virginia, which allows candidates to collect unlimited donations — including direct contributions from corporations and unions, which cannot give to federal candidates in the same way.

The proliferation of super PACs and politically active nonprofit organizations in national politics created a new class of political actors now flocking to Virginia to take advantage of the state’s freewheeling atmosphere.


(The Washington Post)

“It’s a growing magnet for outside money,” largely because Virginia is now seen as a competitive presidential state, said Dan Allen, a Republican consultant who worked for George Allen’s 2006 and 2012 Senate campaigns.

Steyer, who established his super PAC in July, is keenly interested in using the race to test ways to build an effective canvassing operation. Along with the money he is spending on ads, the environmental activist has put money into a field program backing McAuliffe, seeking to “create an identifiable bloc of voters who would not have otherwise shown up at the polls.”

NextGen has recruited 50 military veterans in the Norfolk area to work as organizers, with an eye on the area’s large military population. The group is also targeting the state’s six biggest college campuses, and has frequently employed “guerrilla marketing” tactics such as flying planes with banners over a NASCAR race in Richmond and a Virginia Tech football game in Blacksburg.

“We think the emphasis and focus on media spending is probably a little out of date,” particularly during an off-year election, Steyer said.

The governor’s race is also serving as a proxy fight for a potential presidential bid by Hillary Rodham Clinton. Stop Hillary PAC, a new super PAC, endorsed Cuccinelli and pledged to raise money for him.

On the other side, Clinton loyalists such as BET founder Robert L. Johnson and Los Angeles entertainment executive Haim Saban — as well as former president Bill Clinton — have given McAuliffe six-figure contributions.

Major donors to Cuccinelli include top conservative patrons such as Wyoming investor Foster Friess and Dallas real estate developer Harlan Crow, as well as Koch Industries.

“Informed and committed donors around the country know that the Clinton machine is helping a great deal to fund Terry’s campaign, and they feel it’s very important to get our candidate closer to parity,” said Fred Malek, a top Republican fundraiser. “No one wants to see a pivotal state go blue because of a tremendous financial disadvantage.”

So far, McAuliffe is winning the money race: Through Aug. 31, his total haul in cash and in-kind contributions was $19.3 million, compared with Cuccinelli’s $12.7 million, according to the Virginia Public Access Project.

McAuliffe’s biggest donor has been the super PAC of the Democratic Governors Association, which has given $4.9 million in cash and in-kind donations. He’s also scooped up huge contributions from labor unions, abortion rights advocates and environmental groups.

Cuccinelli, meanwhile, has been largely subsidized by the Republican Governors Association, the single biggest donor in the race, which has given him nearly $6.8 million in cash, advertising, polling and other services. Coal and gas companies such as Consol Energy, Murray Energy and Alpha Natural Resources have donated tens of thousands of dollars to his cause.

On Monday, two new anti-McAuliffe ads will be launched by the Virginia Principles Fund, a PAC seeded with $500,000 from Mercer, the New York hedge fund manager.

Cuccinelli has been bolstered by advocacy groups that do not show up on campaign finance reports because they stop short of direct political advocacy.

Citizens United, the conservative group that spurred a pivotal 2010 Supreme Court campaign finance decision, is promoting a 29-minute documentary it produced called “Fast Terry” that excoriates McAuliffe for his troubled business ventures GreenTech and Franklin Pellets. The movie has been running on local cable stations in the state and has been viewed nearly 50,000 times online. The group is spending more than $600,000 on TV spots advertising the film.

“My goal is to educate people,” said David Bossie, president of Citizens United, who noted that the movie never mentions that McAuliffe is running for governor. “You can’t cross the line, and we know where the line is and we don’t cross it.”

Meanwhile, Americans for Prosperity has stationed more than a dozen full-time field staffers in Virginia. The group is spending the fall testing new technology and messaging in hopes of improving its nonpartisan voter registration and turnout model, with the aim of reaching people who don’t usually go to the polls.

On a recent Saturday, the group organized dozens of volunteers to go door-to-door in Richmond to register their opposition to expanding Medicaid under the Affordable Care Act — a central plank of McAuliffe’s campaign.

“It’s a wonderful laboratory for down the road, because Virginia, even more than Ohio, is the quintessential state that looks like the rest of the country,” said Tim Phillips, the group’s president. “You’ve got cosmopolitan suburbs, traditional suburbs, very rural areas, a huge military population, massive numbers of young professionals, sizable Hispanic and Asian American populations — you’ve literally got the microcosm of the country.”

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