Big Money Floods High-Stakes Gubernatorial Contests

Missouri Republican gubernatorial candidate Eric Greitens speaks to supporters in Chesterfield, Mo. His campaign for the open seat has been fueled by huge political contributions. (Photo: AP/Michael Thomas) 

With most of the nation focused on the spectacle that is the presidential election, the battle over governors’ mansions across the country has drawn less notice, despite high stakes and big spending on both sides.

There are only a dozen gubernatorial races this year, compared with three times that many in 2014, and spending is down. But the hundreds of millions spent by candidates, parties, and outside groups is being lavished on a smaller number of races. And the races have become a magnet for six-figure contributions from super-rich pharmaceutical, casino, and financial sector donors.

The stakes are highest for Democrats, who hold eight of those 12 gubernatorial seats, and who are desperately trying to retain their hold on the few blue-state governorships they hold in such states as New Hampshire, Montana, and Vermont. Democrats are also hoping to snag a couple of gubernatorial seats from Republicans’ grasp in states like North Carolina and Indiana. Meanwhile, the GOP is eager to expand its near-record levels of gubernatorial control into right-leaning states like Missouri, Montana, and West Virginia—states that, in the year of Trump, could flip red. (Republicans now occupy almost twice as many governors’ mansions as Democrats.)

Many of this year’s gubernatorial candidates are running neck and neck in the polls. The high political stakes have driven gubernatorial candidate fundraising to at least $170 million, according to data from the National Institute on Money in State Politics. Meanwhile, political operatives (both for campaigns and outside groups) have spent in excess of $115 million saturating the airwaves with more than 300,000 TV ads, according to the Center for Public Integrity’s state-level ad tracker.

As in years past, the Democratic Governors Association and its GOP counterpart are fueling much of the spending, as both groups pour money into state super PACs and campaign committees. Both groups are so-called 527 organizations, tax-exempt political groups that can pull in unlimited contributions from individual donors, corporations, and unions. This has created a special interest bonanza for health-care, pharmaceutical, and financial industry powerhouses.

The Democratic Governors Association has raised $35 million thus far, according to the Center for Responsive Politics. Its top contributor is insurance giant Blue Cross Blue Shield, which gave more than $1.5 million. Pharmaceutical companies gave big, too, with Pfizer, AstraZeneca, Astellas, and the industry’s PhRMA trade group pumping in nearly $2 million. A slew of major corporations, like Walmart, BNSF Railways, and Duke Energy have all donated. Liberal mega-donor Tom Steyer’s firm, Fahr LLC, gave $500,000, while labor unions put in about $3 million.

Many of the same pharmaceutical bigwigs and corporate donors are also giving tens of millions the Republican Governors Association, which has pulled in a heaping $56 million for the 2016 cycle. But the RGA also has a cast of prominent right-wing donors funding its operations. Koch Industries contributed $2 million, Sheldon Adelson’s Las Vegas Sands casino gave $1 million, while Paul Singer and Kenneth Griffin’s hedge funds each gave $500,000. The U.S. Chamber of Commerce and the Judicial Crisis Network, a right-wing judicial advocacy group, also chipped in $500,000 apiece.

The bulk of the DGA and RGA money is going into contentious gubernatorial races in Indiana, New Hampshire, North Carolina Missouri, Montana, Vermont, and West Virginia. Here’s what’s happening in the nation’s three costliest gubernatorial contests:

Missouri

The Show Me State is one of the few in the nation that does not have political contribution limits, helping make this year’s open gubernatorial contest the costliest state race in the country. The stakes are high. Democratic Governor Jay Nixon has been the only obstacle blocking the Republican legislature from pushing through a pro-business agenda that includes right-to-work legislation and banning localities like St. Louis and Kansas City from increasing their own minimum wages or passing paid sick leave. The Democratic Party and its labor union allies are clamoring to elect Missouri Attorney General Chris Koster, a former Republican, while the state GOP and a cadre of wealthy business leaders are backing Republican Eric Greitens, a former Navy SEAL and former Democrat who is trying to cast himself as a political outsider.

Koster has so far raised more than $24 million, with a big assist from trade and public-sector unions. He has also received $2.7 million from the DGA, including $700,000 that came in just last week. The DGA also appears to have funded a super PAC known as Jobs and Opportunity, which shares the same Washington, D.C., address on FEC filings as the DGA, and which spent big—nearly $1 million—attacking Greitens while he was still in the middle of a heated GOP primary race.

For his part, Greitens has raised more than $17 million. The majority of his support has come from the Republican Governors Association, which, according to the Associated Press, has spent $11.5 million, injecting a last-minute $3.5 million into the race just last week. During the primary, Greitens also received a $1.975 million contribution from a federal super PAC called Seals for Truth, a group that watchdogs recently disclosed has ties to a right-wing dark-money network.

The state’s gubernatorial race has so far seen a total of $33.7 million in spending on nearly 86,000 ads, according to the most recent update to the Center for Public Integrity’s ad tracking. Greitens has spent $11.4 million on ads while Koster has spent $9.1 million.

North Carolina

In North Carolina, Republican Governor Pat McCrory—who is facing a political backlash to his radical far-right agenda—is trailing Democratic Attorney General Roy Cooper in the polls. Though flying largely under the national radar, the race is one of the most heated in the country, and is also shaping up to be the most expensive gubernatorial race in the state’s history.

Cooper has a massive political war chest, having raised about $21.8 million so far, according to the latest filings. That’s significantly more than the $13.9 million McCrory has pulled in. Cooper has been hammering McCrory in the ad wars, too, spending $11 million so far to plaster the Tar Heel state with some 25,000 TV ads—more than double McCrory’s ad total.

All in all, more than $37 million has been spent on gubernatorial ads in the state. And both candidates’ campaigns are also relying heavily on outside support. A coalition of environmental groups, including the North Carolina Environmental Project and the Natural Resources Defense Council, spent about $3 million on ads attacking McCrory’s response to a 2014 coal ash spill. Teachers union-funded PACs have also spent about $1 million.

A Better NC, a politically active nonprofit, has spent $2.2 million running ads on behalf of Cooper, and received at least $930,000 from the DGA, according to the Charlotte Observer.

On McCrory’s side, the RGA has spent $3 million running ads largely attacking Cooper’s record as state AG.

The state GOP also took a $1 million contribution from the RGA’s Right Direction super PAC. The massive donation sparked complaints from Democrats who alleged that, because the super PAC may accept corporate money and state candidates may not, it violated campaign-finance laws. The state GOP contended that the RGA’s contribution included no corporate money and was therefore legal.

Indiana

When Indiana Governor Mike Pence was tapped as Donald Trump’s running mate, he had to give up running for re-election. The race for the state’s gubernatorial seat had already been expected to be contentious, given Pence’s enactment of a Religious Freedom Restoration Act that permitted discrimination on the basis of one’s sexual identity, a law that drew massive scorn both nationwide and within the state. But when Pence bowed out in July, his relatively unknown lieutenant governor, Eric Holcomb, was thrust into the race. Given Holcomb’s flimsy campaign infrastructure at the outset, political observers think that Democratic challenger John Gregg, a folksy, mustachioed former Indiana House speaker from rural Indiana, might be able to pull off an upset win with his campaign focused on infrastructure, universal preschool, and expanding LGBT rights in the wake of Pence’s reign.

Gregg already had a $3.5 million war chest left over from the last time he ran for governor, and he has raised a grand total of $16.5 million, according to the Associated Press. Holcomb has pulled in $11 million, including a $1.25 million contribution from Pence’s former campaign. So far, the campaigns and outside groups have spent about $16 million on TV ads, with pro-Gregg forces spending nearly twice as much as the players backing Holcomb.

A total of $17 million has been spent on TV ads in Indiana.

The RGA has provided about half of Holcomb’s funding, having funneled $5.1 million to his campaign as of October 24, the Associated Press reported, and has plans to dump in an additional $1.5 million before Election Day. The RGA’s Right Direction super PAC has also spent $1.4 million running TV ads on behalf of Holcomb. The DGA, for its part, has given Gregg about $1.8 million, while labor groups have also poured money into his campaign. 

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