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Wednesday, July 28, 2010

The Money Game

The candidates’ spending says a lot about them

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The candidates have filed their campaign finance reports and trumpeted the good news about their fund-raising prowess during the second quarter of 2010. But behind the cheery press releases claiming that each candidate is a good bet for donors and voters, what else do these statements say about the campaigns? Veteran campaign strategists spoke to the Shepherd about the nitty-gritty included in the thousands of pages of campaign reports. Here’s the juicy stuff if you read behind the numbers about the biggest matchups—the U.S. Senate race between Democrat Russ Feingold and the Republicans, Oshkosh businessman Ron Johnson and Dave Westlake; and the Wisconsin governor’s race between Milwaukee County Executive Scott Walker and his Republican primary rival, businessman Mark Neumann; and Milwaukee Mayor Tom Barrett, who is facing Tim John in the Democratic primary.

Who Raised What

Two of the three candidates for U.S. Senate seem to be flush with cash. Incumbent Feingold raised $1.4 million and has $4.3 million cash on hand. He doesn’t have a primary opponent this year. His likely Republican rival, businessman Johnson, has raised $557,774 since May 10, when he filed papers to form a campaign committee. Johnson also loaned his campaign just under $1.5 million, and has $940,000 cash on hand as of the filing deadline. Johnson, according to his financial disclosure statement, is worth between $10 million and $38 million, and has said he’s willing to spend $10 million to $15 million on his campaign. Tea party activist Westlake reportedly has raised less than $20,000, and has roughly $2,000 on hand.

The governor’s race has also attracted a ton of money. Walker raised $2.5 million this quarter and he has $2.5 million on hand. Neumann raised $2.8 million—$2.5 million of which is a personal loan—and has $1.05 million left in the bank. Democrat Barrett raised $2.4 million and has $2.9 million left to spend. He faces a primary challenge from Tim John, who has raised $52,408 and has just over $10,000 on hand as of this month.

What Are the Limits?

Federal candidates and state candidates must play by different fund-raising and spending rules. Donors to federal candidates can give up to $4,800 per candidate, though candidates can only spend $2,400 of that on the primary and $2,400 on the general election—a candidate must win the primary to get to spend the entire $4,800. So while Westlake is running a smaller, grassroots campaign, he’s still posing a primary challenge that will force Johnson to spend more money during the primary season. Since Johnson is viewed as the odds-on favorite against a candidate who has virtually no money, Johnson can’t just win; he has to win big—earning at least 75% of the vote. Feingold, in contrast, doesn’t have a primary opponent. He still has to stay under the $4,800 cap, but he doesn’t need to spend much money during the primary portion of the long campaign season.

State candidates, on the other hand, play by different rules. Individual donors can contribute up to $10,000 per year to state candidates. They can spend it all on one candidate, or they can spend it on multiple candidates so long as they don’t go over the $10,000 cap. Walker has nine individual contributors who maxed out, Neumann has four, and Barrett has more than 20 donors who have contributed $10,000. That seems to indicate that Republicans are less willing to place all of their chips on one candidate, while Democrats are betting the house on Barrett. Since there are a limited number of people in either party who make big contributions, a contested governor’s race can hinder the fund-raising efforts of candidates running for smaller offices by taking up most of the available money.

In addition, other candidates or even former candidates can spend on campaigns, too. Gov. Jim Doyle still has $1.8 million in his war chest, while the 2006 GOP gubernatorial candidate, Mark Green, has $172,518 on hand. They can pretty much do as they please with this money, subject to some contribution limits. Democratic candidates will likely look to Doyle for contributions within those limits. However, the outgoing governor can also take out his own issue ads, for which there are no spending limits.

Burning Through Cash

It’s no wonder why the Republican elites are trying to push Neumann off the ballot for governor: He’s forcing Walker to burn through his cash. While Walker’s $2.5 million of contributions seems like a big haul, he’s spent almost that much this quarter—more than $2 million.

So what’s he spending it on?

Consultants, fund-raising and lots of media. Walker’s media buyer is Nonbox, run by heavyweight conservative Republican consultant Bill Eisner, who, incidentally, was on Neumann’s team when the then-congressman ran against Feingold in 1998. Eisner, who is very capable, has a strong working relationship with R.J. Johnson of Walker’s campaign. Because of this, and since Neumann was late getting into the race, Eisner is now working against his former client.

While Walker isn’t running any TV ads in Milwaukee at the moment, he’s spent $523,156 on TV ads around the state this quarter. Nonbox has also spent a whopping $128,459 on newspaper ads and $32,827 on radio ads. MSA of New Berlin earned $63,000 for printing brochures and SCM Associates of New Hampshire raked in $280,000 for mailing services. FLS Connect of St. Paul, Minn., received $185,411 in solicitation expenses. FLS is a notorious GOP-supporting outfit known for some pretty nasty campaign tactics—voters may remember the McCain campaign robocalls that linked Barack Obama to ’60s radical William Ayers. FLS made those calls.

Neumann isn’t afraid to spend cash, either. He’s spent an eye-popping $925,633 on TV ads this quarter, $2,400 on radio and $700 on newspaper ads. It’s no wonder why he’s in striking distance of Walker, despite Walker’s coronation by the state Republican Party. Furthermore, Neumann has a good Republican profile—a successful, self-made businessman—while Walker has spent virtually his entire career on the public payroll. Since Neumann has a largely self-funded campaign, he’s likely to keep buying ads to make his case. One consultant told the Shepherd that if Walker wins the primary, he might be drained dry of cash when the general election against Barrett begins in mid-September. Surely, though, national Republican organizations and conservative special interest groups will come to the rescue with attack ads, so Walker is probably not too worried about spending everything to win the primary.

Barrett, by the way, has spent $444,859 on TV ads—not really necessary in Milwaukee, of course.

But all of that pales in comparison with Senate candidate Ron Johnson’s TV buys. The Oshkosh businessman declared his candidacy in mid-May and within a month spent $802,301 on ads saturating each media market in the state. A very reliable source said that number has now climbed to just shy of $2 million total, which includes a big ad buy he made this week. Looks like those Great Lakes ads are here to stay—and that he’s got the Sarah Palin playbook down pat by relying on paid media.

This quarter, Feingold paid $65,012 to Eichenbaum and Associates for TV commercial production and consulting, and bought $319,435 worth of ad time, according to his latest campaign finance disclosure report.

Johnson’s Instant Campaign

A few words about Ron Johnson’s campaign: It came together in an instant. Johnson, who has never run for political office and had made two political speeches in his life—at tea party rallies—announced his candidacy in mid-May. He started accruing expenses on April 15—a Delta Air Lines flight “to Milwaukee” for $548. Immediately thereafter, payments to Mark Stephens, a North Carolina-based consultant, started popping up. Stephens has quite a track record in Republican circles and he’s not afraid to get down in the mud during campaigns. Way back in 1990, Stephens helped then-Sen. Jesse Helms eke out a victory, thanks in part to a highly condemned race-baiting ad that showed a white man’s hands rip up a rejection notice because a “less qualified minority” got the job instead. More recently, Stephens helped to craft a much-denounced ad for then-Sen. Elizabeth Dole, running for re-election in 2008. The ad showed Dole’s opponent, Kay Hagan, with a voice-over yelling “There is no God!” and implying that Hagan was an atheist and has the support of the “godless community.” Hagan beat Dole 53%-44% in that election, showing that below-the-belt attack ads can backfire on the instigator.

Johnson is also racking up support among the national Republican elite. He’s received $30,000 from the political action committees run by the Senate Republican leadership of Kentucky Sen. Mitch McConnell, Arizona Sen. Jon Kyl, Tennessee Sen. Lamar Alexander, and Texas Sen. John Cornyn. Those committees are funded by the usual Republican donors—Big Pharma, bankers, insurance companies and home-builders. Wisconsinites may not know much about Johnson, but the establishment is willing to make a bet on him.