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Mega-donors Get Mixed Election Returns

Wealthy Contributors Find that Big Bucks Sometimes Backfire

by Eric Kelderman, Staff Writer

Michigan architect Jon Stryker didn’t bother with the fund-raising circuit last year when he launched a political nonprofit group to support Democratic candidates and oppose conservative ballot measures. The billionaire simply chipped in $4.6 million of his own money.

Stryker was among a bevy of big donors to pour some of their personal fortunes into last year’s gubernatorial, state legislative and ballot-measure contests. But the super-rich had a mixed record in their single-handed efforts to sway election outcomes. In some cases, the motives of wealthy donors even backfired against their candidates or causes.

Through his PAC and other individual contributions, Stryker gave at least $6.4 million to candidates or political committees in at least a dozen states, including Michigan, where he can boast that Democrats gained a majority in the Michigan House of Representatives for the first time in 12 years. But Texas’ top two donors spent nearly $12 million in 2006, mostly on Republican candidates for the statehouse, only to see the GOP lose five seats.

A West Virginia coal magnate spent nearly $3.2 million in a failed personal quest to oust Democrats from the West Virginia Legislature. Meanwhile, in Oregon, a Las Vegas resident pitched in $1.25 million for two losing libertarian ballot initiatives and the unsuccessful campaigns of two Republican gubernatorial challengers.

The scope of wealthy donors’ contributions nationwide is difficult to tally because there is no comprehensive database of state campaign finances. In addition, most of the largess flows outside contributions to candidates’ campaigns. Many individuals give money to nonprofit political groups — so-called 527s — that may disclose their contributors to the Internal Revenue Service instead of the state. Other nonprofit groups that participate in the political process are not required to reveal their donors at all.

Well-heeled donors use campaign contributions to build statehouse influence on specific policies, to make an ideological point or just to flex their financial muscles, said Ed Bender, director of the nonprofit Institute for Money in State Politics, which tracks individual contributions to state-level campaigns and ballot initiatives. “It just becomes a power thing. They have the money and they’re going to do it,” he said.

Stryker, one of the heirs to a medical products fortune, succeeded in getting bang for his buck in 2006. Michigan State Republican Chairman Saul Anuzis said Stryker’s money “played a huge role” in the Democrats’ takeover of the Michigan House. Importantly, his bankrolling never became an issue. “I would argue most people didn’t know this guy, Stryker, was paying for the campaign ads,” Anuzis told

Stryker’s sister, Pat, also contributed $500,000 to her brother’s organization, Michigan Coalition for Progress. She is one of a handful of wealthy donors credited with helping Democrats win a surprise majority in the Colorado Legislature in 2004.

Outside of his political action committee, Stryker sent thousands of dollars to state-level Democrats in California, Iowa, Massachusetts, New York, Oklahoma, Oregon, Pennsylvania and Washington, according to data from the Institute on Money in State Politics. Democrats gained legislative seats in all of those states, except Oklahoma, and new legislative majorities in chambers in Iowa and Pennsylvania. Nationally, Democrats made a net gain of more than 350 state legislative seats and new majorities in 10 statehouse chambers.

Stryker also sent at least $750,000 to groups opposing gay-marriage bans on the ballots in Arizona, Colorado and Virginia. Arizona became the first state ever to reject a gay marriage ban at the ballot box.

Stryker supports a broad agenda of social justice and civil rights issues, not just gay rights, said Lisa Turner, Stryker’s political advisor and a veteran of the Democratic Legislative Campaign Committee, which works to boost the party’s statehouse numbers nationally. His group plans to grade lawmakers on those issues in states where it is active, she said.

Unlike Stryker, some deep-pocketed Republicans found themselves swimming against last year’s partisan tide, including Texas developer Bob Perry, one of the founders of the Swift Boat Vets group that sidetracked 2004 presidential candidate U.S. Sen. John Kerry (D). Perry increased his state campaign donations in Texas by 44% from the 2004 elections, pouring money into 146 legislative races and 17 state political action committees, according to Texans for Public Justice (TPJ), a campaign-finance watchdog group. He gave 92% of his money to Republicans, but only one seat that he targeted switched for the GOP.

But Perry also gave two-thirds of the $750,000 spent by a political nonprofit group that slammed Minnesota gubernatorial candidate Mike Hatch (D), who lost. And Perry gave $225,000 to the failed gubernatorial bid of Pennsylvania Republican Lynn Swann (R) and more than $22,000 to Calif. Gov. Arnold Schwarzenegger’s (R) successful re-election.

Successful or not, million-dollar donors can have a chilling impact on lawmakers’ decisions, said Craig McDonald, executive director of the Texas watchdog group. Texas legislators worry that one wrong vote will make them the next target of Perry or private school-voucher advocate James Leininger, who spent more than $5 million on Texas Republican candidates and conservative political action committees, McDonald said. In the 2006 primary, Leininger backed conservative challengers who defeated two GOP incumbents in the state Legislature who had voted against publicly funded vouchers for students to attend private schools. In the general election, however, three sitting legislators backed by Leininger lost their seats to Democrats.

In the wake of this year’s flood of campaign cash, a Texas bill to cap individual campaign contributions at $100,000 is gaining momentum, McDonald said. Texas is one of a dozen states that have currently no limits on individual campaign contributions.

In West Virginia, only one of more than three dozen incumbent Democratic state lawmakers targeted by Don Blankenship — CEO of Massey Energy Co., one of the state’s largest employers — lost. And that was losing candidate was an 80-year-old woman admitted to an assisted-living facility during the campaign, according to press accounts. In fact, Democrats gained a total of six seats in the state legislature.

Voters were skeptical of Blankenship’s money and motives, said state Democratic Party Chairman Nick Casey. He has become a political celebrity, of sorts, spending millions in an effort to influence the state’s tax and regulatory policies and filing lawsuits against Gov. Joe Manchin (D) and all five of the state’s Supreme Court justices. In 2005, Blankenship helped defeat a $5.5 billion bond referendum supported by Manchin. Massey Coal was fined $50 million in 2002 for forcing a smaller company out of business and has come under increasing scrutiny for safety violations and 13 deaths in coal mine accidents over the past five years.

One of Oregon’s top campaign donors is Las Vegas resident Loren Parks, who has contributed more than $7.1 million to Oregon campaigns over the past decade, according to data from the secretary of state. In 2006, Parks backed two losing ballot measures, providing the vast majority of money to groups pushing a state income-tax deduction for Oregonians and a measure to bar insurance companies from using credit scores to determine premium rates, according to the nonprofit Money in Politics Research Action Project. Both failed because voters viewed Parks as an outsider with no business in the state’s politics, said House Speaker Jeff Merkley (D).

A wealthy reclusive New York real-estate developer, Howard Rich, is linked to several nonprofit groups that spent an estimated $15 million to push 35 ballot initiatives limiting state spending and strengthening individual property rights, according to the left-leaning Ballot Initiative Strategy Center. Several of the measures were barred from the ballot because of fraudulent signature-gathering, and only one of those measures was approved — an Arizona initiative requiring state and local governments to pay property owners whose land values were diminished by land-use restrictions.

While Rich has either launched or helped direct all these groups — including Americans for Limited Government, Club for Growth State Action, U.S. Term Limits and Fund for Democracy — the organizations are not required to reveal their donors’ names. Americans for Limited Government has repeatedly claimed widespread support for its measures. The Center for Public Integrity charged recently that tax documents show 99% of that group’s funds came from just three individuals, although the names are not revealed in the tax filings.

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