Tactic feeds political cash to state races

Sunday, January 12, 2014

By his third year as chairman of the Alabama Republican organization, Mike Hubbard believed his party had just about everything it needed to win control of the state Legislature.

He had a plan with detailed, district-by-district budgets and precise voter-turnout targets. He had candidates, most of them political novices recruited with an eye toward the anti-establishment fervor roiling the country.

What Hubbard did not have was enough money. Alabama law barred corporations from giving more than $500 to candidates and parties - a limit that did not apply to the state’s unions.

So began a nationwide quest for cash that would take Hubbard to the Republican organizations in states such as Florida and Ohio, to a wealthy Texan who was one of the country’s biggest Republican givers and to a Washington organization that would provide checks from dozens of out-of-state corporations.

Exploiting a provision in the state law and a network of political action committees in Alabama and Washington, Hubbard shuffled hundreds of thousands of out-of-state dollars into the Republican organization in Alabama, vastly out raising the state Democratic Party. On Election Day, Republicans won majorities in both the state Senate and House of Representatives for the first time since Reconstruction.

Alabama’s transformation was the product, in part, of a sophisticated political apparatus designed to channel political money from across the country into states where conditions were ripe for a Republican takeover. In 2010, the effort achieved striking success, moving a dozen states to sole Republican control, including presidential swing states such as Ohio and Pennsylvania.

In 2012, a resurgent Democratic version - financed chiefly by labor unions and wealthy liberal donors rather than corporations - began to catch up, spearheading Democratic takeovers in Minnesota and Colorado.

Their combined work has helped remake the nation’s political landscape. Republicans or Democrats control both the legislature and the governor’s office in 36 states, the most in 60 years. Twenty-three states are now solely controlled by Republicans, with 13 run by Democrats.

Both sides rely on interlocking networks of political action committees, party organizations and nonprofit groups, often based in states with forgiving campaign-finance rules, that work in concert to raise contributions and shuffle money to thousands of local races across the country.

A RARE OPPORTUNITY

In early 2010, a little-known group called the Republican State Leadership Committee approached Ed Gillespie, a longtime Republican strategist who has played a central role in efforts to swing state legislatures to Republican control.

Gillespie joined the group as chairman. He took his pitch to Wall Street investors in New York, energy executives in Dallas and dozens of corporate government-relations offices in Washington.

Republicans could do more than just flip a few state legislatures, he told them. They could use their new statehouse majorities to build a firewall in the U.S. House of Representatives: congressional districts so favorably drawn for Republicans that the party’s House majority would endure for a decade.

The group’s fundraising shot up, bolstered by bigger contributions from longtime donors and new money from the burgeoning network of conservative political groups.

The bulk of that money went into a carefully laid assault on Democratic lawmakers in 19 states, planned in tandem with efforts by the Republican Governors Association.

Alabama was an obvious target. Hubbard, a state representative, and officials at the Leadership Committee believed just one well-organized push would send the Democrats into permanent minority status.

Yet state law prohibited corporations from giving more than $500. And other potential donors were unwilling to give to the party in case the takeover effort failed.

Many of those donors were willing, however, to give to a Republican group in Washington. After meeting with Leadership Committee officials, Hubbard, along with his finance chairman, state Sen. Del Marsh, began raising money for the group. If they did well enough, Hubbard believed, the Leadership Committee would make a similar investment in Alabama.

During the 2010 cycle, the Leadership Committee took in close to $1 million from Alabama donors. During the same period, the group directed about $1.4 million into an Alabama-registered political action committee, all of it from out-of-state corporations.

Public records suggest that many of the contributions the Leadership Committee raised in Alabama made their way to races in other states.

The Republican Governors Association made similar transfers. The governors association spent $99 million and ended with Republican control of 29 governorships, up from 23, the highest number for either party in a decade. Republicans controlled 25 legislatures, up from 14. In Alabama, Republicans won supermajorities in both houses of the Legislature.

The Alabama Republican Party’s finances during that period have since come under scrutiny: Some of the party’s records have been subpoenaed by the Alabama attorney general, Republican Luther Strange, though the scope of his office’s inquiry is unclear. Hubbard has denied any wrongdoing.

THE GAY-RIGHTS BATTLE

At an annual conference known as OutGiving, organized by the Gill Action Fund in May 2012, Kirk Fordham, the group’s executive director, clicked through a presentation for more than 100 of the country’s leading gay donors and advocates. He scrolled through names of state lawmakers and other elected officials who opposed gay-rights legislation. All would be targeted for defeat.

The fund had racked up a string of wins in state races, helping elect dozens of lawmakers who supported gay rights - or unseating their opponents - in Iowa, Colorado and New York. In 2012, Minnesota was rich with potential targets.

Two years earlier, Republicans had won an upset victory there, taking control of the state Senate and the state House for the first time in nearly four decades. The new Republican majorities had sought to enact a wave of conservative policies, battling with the new Democratic governor, Mark Dayton, over tax cuts, education spending and a measure to rein in unions.

One bill in particular had the Gill Action Fund’s attention. Minnesota had a law banning same-sex marriage, but Republican lawmakers had put a question on the November ballot asking voters to enshrine that ban in the state constitution.

Other deep-pocketed gay rights groups, both in Minnesota and across the country, were mobilizing to defeat the marriage initiative. The Gill group had a complementary goal: helping Democrats win back the Legislature so Republicans would not get a second chance.

So instead of cutting a few big checks, the fund picked a handful of candidates and organized a blizzard of small contributions to them from dozens of donors. As Election Day neared, out-of-state contributions began to flow into the campaign accounts of seven Democratic candidates for the Minnesota Legislature.

While Gill’s team organized contributions directly to candidates, it also was joining with one of the most successful state-based political operations anywhere in the country: a liberal nonprofit group called the Alliance for a Better Minnesota.

The fund and other national gay-rights groups raised millions of dollars from out of state for efforts to defeat the anti-gay-marriage initiative.

In May, Minnesota became the 12th state to legalize same sex marriage. The Gill Fund is now raising money for incumbent lawmakers who voted for the measure, an official there said.

Information for this article was contributed by Sarah Cohen and Monica Davey of The New York Times.

Front Section, Pages 1 on 01/12/2014