GOP Super PAC’s Corporate Money Counters Democrats in Special Elections

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By Kenneth P. Doyle

A Republican super political action committee that is pouring money into congressional races in Montana and Georgia is being funded by tobacco companies, video game manufacturers, other corporations and wealthy donors, according to recently filed Federal Election Commission reports.

Affiliates of R.J. Reynolds and Phillip Morris, along with the Entertainment Software Association (ESA), a trade association for video game makers, and the American Action Network (AAN), a nonprofit group that has received corporate funding, gave a total of nearly $2 million over the last month to the Congressional Leadership Fund, the super PAC endorsed by House Speaker Paul Ryan (R-Wis.) and other GOP leaders.

AAN provided more than $1.6 million to the super PAC, according to an FEC report filed May 11. RAI Services Co., an affiliate of R.J. Reynolds Tobacco Co. parent Reynolds American Inc., gave $250,000. Altria Client Services LLC, an affiliate of Philip Morris USA, gave $25,000. ESA gave $50,000.

Spending by the GOP super PAC and others in the Georgia and Montana special elections could presage record-shattering fundraising for the 2018 midterms. The latest FEC reports indicate an arms race is taking shape as Democratic contributors motivated by opposition to President Donald Trump and the Republican agenda are being countered by Republican groups funded by corporations, trade associations and wealthy individual donors seeking to preserve a business-friendly Congress.

The most recent contributions to the Congressional Leadership Fund, known as CLF, also include an individual contribution of $1 million given last month by Steven A. Cohen, founder of the hedge-fund group SAC Capital Advisors, who now heads Point72 Asset Management. Most the Republican super PAC’s money, however, has come directly from company treasuries and from AAN, the super PAC’s nonprofit arm, which doesn’t disclose its donors.

GOP Super PAC Faults Democrats’ Fundraising

The latest FEC reports filed by CLF showed the Republican super PAC has received nearly $7.5 million since the beginning of the year. More than $5 million has come from AAN, the super PAC’s nonprofit arm, which doesn’t disclose its donors and reportedly has received millions in corporate money. For example, the insurance giant Aetna disclosed in a 2012 state insurance filing that it had given $3.3 million to AAN.

As corporate money has become a major funding source for CLF, the super PAC and other groups are pouring independent expenditures into television ads and other campaign efforts in races for House seats vacated by Republican lawmakers who left to join the Trump administration. The special elections in Georgia and Montana, especially, are seen by both Republicans and Democrats as a test of the electorate’s mood in the early months of Trump’s presidency.

CLF sponsored a TV ad currently running in the Georgia race, which blasts fundraising by Democratic candidate Jon Ossoff. Ossoff, a 30-year-old first-time candidate, has raised more than $8 million. The Republican ad highlights that Ossoff has received campaign money from people outside the state, emphasizing that the largest proportion of Ossoff contributors are from California.

Democratic grassroots groups have been soliciting support for Ossoff and other special election candidates and say they have met with unprecedented fundraising success in the wake of Trump’s election and the first few months of his administration. The Democratic PAC ActBlue, which helps channel individual online contributions to candidates, said recently that it handled more than $111.3 million in contributions in the first quarter of 2017. The amount was more than four times greater than the total contributions seen in the comparable period for the 2016 election cycle.

Georgia Race Already Over $20 Million

Democrats have said the Republican-backed health care bill recently passed by the House is unpopular and has helped their fundraising efforts. For example, ActBlue already is collecting money for any Democratic nominee chosen to run against an incumbent Republican lawmaker who voted for the health care bill, which is now pending in the Senate.

The Georgia special election race, which pits Ossoff against Republican Karen Handel, already has seen more than $20 million in campaign spending by the candidates, super PACs and other outside groups, as well as Republican and Democratic Party committees. More than a month before the June 20 election, the race for the suburban Atlanta congressional district already is widely seen as certain to be the most expensive U.S. House race in history.

In addition to CLF’s spending, the U.S. Chamber of Commerce has joined in to help Handel, spending a reported $1 million on TV ads in Georgia. Other big ad spenders in the Georgia race include the Republican-leaning nonprofit groups Ending Spending and 45 Committee and the super PAC Club for Growth Action.

Democrat-leaning nonprofits, such as the Planned Parenthood Action Fund, also have entered the fray, spending on voter mobilization efforts in the Georgia and Montana races. However, most of the outside spending in the Georgia and Montana races has been on the Republican side. (Bloomberg Philanthropies provides financial support for Planned Parenthood.)

$10 Million Spent in Montana Race

The Montana race between Democrat Rob Quist and Republican Greg Gianforte, which is set to be decided May 25, has seen more than $10 million in campaign spending. The candidates each spent about $2.5 million through May 5, according to FEC candidate committee reports filed May 13. Total independent expenditures have reached more than $5 million, according to FEC reports.

Quist, a folk musician and novice candidate, has raised over $1 million more in contributions than Gianforte, a businessman who ran unsuccessfully for Montana governor last year.

Quist’s fundraising total of just over $3.2 million, however, was less than Gianforte’s $3.4 million total because the Republican candidate has provided $1 million from his own pocket to fund his campaign and has received $120,000 from a joint fundraising committee called the Gianforte Victory Fund. The fund was set up by Gianforte’s campaign committee, the National Republican Congressional Committee (NRCC) and the Montana Republican State Central Committee.

Most of the outside money in the Montana race has come from independent campaign expenditures by super PACs like CLF and political party committees. Although the vast majority of the outside spending has been from Republican-linked groups trying to elect Gianforte, the House Democrats’ campaign committee, the Democratic Congressional Campaign Committee (DCCC), this month is spending $340,000 to buy TV ads opposing Ginaforte, according to FEC reports on independent expenditures.

Party Committees Wade Into Special Elections

Both the DCCC and its Republican counterpart, the NRCC, have been spending on TV ads in the Montana and Georgia races. In addition, the Republican National Committee has spent some money on voter mobilization efforts.

The party committees aren’t allowed to take corporate contributions directly from company treasuries, but they can take money from corporate PACs funded by employee and stockholder contributions. In addition, the national party committees can take individual and PAC contributions in much larger amounts than candidates can, due to a law passed by Congress at the end of 2014 that sharply increased contribution limits for the parties.

Contributors to the national party committees can now give up to $101,700 annually to each special account set up by a party committee to cover convention costs, recounts and party headquarters. The FEC hasn’t yet written rules for these accounts, so it’s unclear whether any of the money could be used to help Democratic and Republican candidates in congressional races. It is clear, however, that party committees have taken advantage of the higher limits to raise more money.

For example, the NRCC raised more than $12.7 million this year for its special accounts, according to FEC reports, including more than $200,000 each from wealthy contributors including attorney Boyden Gray, investment firm manager Kenneth Griffin and building supply company owner Diane Hendricks, all longtime Republican contributors.

The DCCC raised nearly $1.3 million for its special accounts this year. The Democratic committee’s only contributor providing more than $200,000 this year is financier Donald Sussman, a longtime Democratic contributor.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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