• How outside money was poured into governors' races

    By Paul Abowd and Andrea Fuller, The Center for Public Integrity

    Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

    The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Democrats won seven of the 11 contests, but the GOP managed to pick up one seat in North Carolina, long held by Democrats.

    The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

    Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the latest Federal Election Commission reports, Adelson is the top donor to super PACs in 2012, doling out more than $93 million along with his family.

    Conservative billionaire David Koch — who has not made any contributions to super PACs — was the organization’s third-highest donor, writing two checks totaling $2 million. Koch is co-owner of the second-largest privately held company in America, Koch Industries, an energy conglomerate.

    Seven of the RGA’s top 10 donors are corporate executives who gave at least $1 million. Two of them, Paul Singer and Kenneth Griffin, are hedge fund managers.

    Six of the Democratic Governors Association's top donors were unions. The American Federation of State County and Municipal Employees topped the DGA donors list, giving about $1.3 million. The Service Employees International Union gave about $1.1 million, while the American Federation of Teachers gave at least $772,000.

    Top corporate donors to the DGA included pharmaceutical giants Pfizer, which gave almost $700,000, and AstraZeneca, which contributed nearly $600,000. The companies also gave comparable sums to the RGA. The DGA also got corporate support from health insurer United Healthcare Services Inc., and AT&T.

    The DGA raised nearly $50 million, the organization's "strongest fundraising year ever," according to spokeswoman Kate Hansen. 

    'Enormous impact on state elections'
    The DGA and RGA have devised national strategies for collecting unlimited funds from unions, corporations, and wealthy individuals, and funneling the money into state races. Both have used networks of state-based PACs to maneuver around various state limits on campaign giving.

    “They’ve had an enormous impact on state elections across the nation,” said Ciara Torres-Spelliscy, an election law expert at Stetson Law School. “In many states they were consistently a top spender.”

    The circuitous methods used by both organizations to inject corporate and union cash into state races and mask the identity of its donors have raised legal questions, prompted lawsuits, and tested the capacity of state election boards to enforce limits on outside spending.

    Both organizations have told the Center for Public Integrity that they fully comply with campaign finance laws, and that they report their donors and spending to the IRS.

    The RGA set up a federal super PAC called RGA Right Direction, and fed it with $9.8 million in contributions. The super PAC — another type of organization that can accept unlimited donations from individuals and corporations — then made a large contribution to Indiana Republican candidate Mike Pence, and bought ads in tight state races in Montana, Washington, New Hampshire, and West Virginia.

    Super PACs are normally used to spend money on federal campaigns. By passing the funds through the super PAC, which reported its sole donor as the RGA, the association effectively shielded the identities of the donors who paid for ads in the state races.

    In North Carolina, the RGA spent millions of dollars, directly from corporate treasuries to win in a state long led by Democratic governors. The unlimited contributions from dozens of corporations across the country went toward ads supporting Republican candidate Pat McCrory, who won convincingly over Democratic Lt. Gov. Walter Dalton.

    The DGA, too, used a network of state-affiliated PACs, to fund ad campaigns in battleground states like Montana and North Carolina. It was the primary funder of a PAC called North Carolina Citizens for Progress, which purchased ads attacking McCrory.

    While America’s wealthiest corporate executives tend to prefer the RGA, and unions give almost exclusively to the DGA, some donors played both sides this election.

    Agricultural giant Monsanto, credit card company Visa and health insurance company Humana were large donors to both the RGA and DGA — each giving about $100,000 to both groups.

    Despite the Republicans' win-loss record, RGA spokesman Michael Schrimpf called 2012 "a successful year by any standard" with Republicans now in control of governorships in 30 states. Most of those gains, however, came in 2010. The North Carolina win and the failed effort to recall Scott Walker, Wisconsin's Republican governor, in June, were high points for the GOP this year.

    In addition, in five states targeted by the RGA where it lost, the Democrats held advantages unrelated to fundraising. 

    Missouri and West Virginia featured Democratic incumbents. Three other states — Montana, Washington and New Hampshire — had open seats where a Democrat had previously been in power.

    The two organizations will put their fundraising powers to the test again in 2013, when Virginia and New Jersey choose their next governors.

    Michael Beckel contributed to this report.

    The Center for Public Integrity is a non-profit independent investigative news outlet.  For more of its stories go to publicintegrity.org

    More from Open Channel:

     


     

    Follow Open Channel from NBCNews.com on Twitter and Facebook

     

     

  • Pence in as governor of Indiana; Hassan wins N.H.

    Darron Cummings / AP

    Indiana gubernatorial victor Republican Mike Pence speaks to supporters with his family at his side on Tuesday, Nov. 6, 2012. Pence defeated Democrat John Gregg and Libertarian Rupert Boneham.

    By NBC News' Kari Huus and wire services
     
    Updated Tuesday, 1 p.m. ET to reflect outcome of Montana race for governor.
    Rep. Mike Pence, a notable social conservative in Congress clinched the Indiana state house in a race against Democrat John Gregg, a former Indiana House speaker. Pence will take the seat vacated by Gov. Mitch Daniels, who is up against term limits.
    Pence is known, among other things, for his outspoken views against Planned Parenthood, which he sought to strip of funding, not just for abortion but for all functions.
    In 11 governor’s races around the country, Republican candidates gained at least one state house for their party, bringing the total to 30. In one state, Washington, the outcome of the gubernatorial race was still too close to call at 1 p.m. ET.
    In North Carolina, Pat McCrory, a former Charlotte mayor, won the seat being vacated by Gov. Bev Perdue, becoming the first Republican to hold that office in 20 years.

    McCrory, who cast himself as a pragmatic centrist, defeated Democratic Lt. Gov. Walter Dalton, to replace the Perdue whose administration was sullied by an investigation that led to charges against her former campaign aides.

    Becoming the first Republican governor in North Carolina in 20 years, Pat McCrory thanks his supporters.

    It took until noon on Wednesday before the outcome of race in Montana was determined. Democrat Steve Bullock, the state's attorney general defeated rival Rick Hill, a Republican who formerly served in the House. With 83 percent of the vote counted, Bullock had 49 percent compared to Hill's 47 percent.

    Just weeks before voting day, a legal battle erupted over a $500,000 donation to Hill from the Republican Governors Association, and a judge's order barring him from using it.

    The donation came after a federal judge ruled that Montana’s campaign contribution limits were unconstitutionally low on Oct. 3, and before the 9th U.S. Circuit Court of Appeals blocked that ruling on Oct. 9, restoring the limits pending appeal.

    The legal distraction may have tipped the balance towards Bullock.

    Democrat Margaret "Maggie" Hassan clinched the governorship in New Hampshire Tuesday in a hard-fought race, retaining the seat for her party. It was one seat that Republicans had hoped to add to their state house seats.

    Cheryl Senter / AP file

    Democrat Maggie Hassan is shown addressing supporters in Manchester, N.H. on Tuesday, Sept. 11, 2012.

    Hassan defeated Republican Ovide Lamontagne by a greater margin that pundits predicted in a race dominated by taxes and social issues, for the seat of Gov. John Lynch, a retiring Democrat.

    Both Hassan and Lamontagne's campaigns attempted to portray their competitors as ideological extremists on social issues including abortion and same sex marriage, but both had to court the independent voters who account for 39 percent of the electorate in that state, according to the Union Leader.

    Hassan, who is pro-choice and supports same sex marriage, received millions of dollars worth of help in attacking her rival from groups such as EMILY's List, Planned Parenthood Action and NARAL, the Leader reported. Polls indicated the attacks created, or widened, a significant gender gap between the two candidates, according to the report.

    Six incumbent governors were projected winners, including two Republicans and four Democrats: Gov. Jack Dalrymple (R) of North Dakota, Utah Gov. Gary Herbert (R), Gov. Jack Markell (D) of Delaware, Gov. Peter Shumlin (D) of Vermont, and Gov. Jay Nixon (D) of Missouri. West Virginia Gov. Earl Ray Tomblin (D) also retained his seat. Tomblin became governor in 2010 after then-Gov. Joe Manchin resigned. He defeated coal businessman William "Bill" Maloney.

    Nail-biters in Montana, Washington 
    Washington state was the only gubernatorial race too close to call as of noon on Wednesday.

    In Washington, the race was neck-and-neck heading into the final stretch between former Washington Attorney General Rob McKenna, a Republican, and former Rep. Jay Inslee, the Democrat.

    Although Washington voters had not elected a Republican governor since 1980, the seat being vacated by retiring Gov. Christine Gregoire is hotly contested, and witnessed a large influx of outside money.

    According to the Seattle Times, the race was expected to cost more than $46 million, with the single biggest share of spending coming from out-of-state interest groups.

    Both candidates put job creation at the top of their to-do lists.

    Inslee touted his jobs-creation program based on green energy technology, was pro-choice and favored Obama’s health care plan.

    McKenna ran on creating jobs by cutting red tape and taxes for the state’s business owners.

    Republicans controlled 29 governorships going into Tuesday's elections, with Democrats holding 20 and an independent as governor in one — Lincoln Chafee of Rhode Island. If the GOP wins in Washington, the party would be in charge of 31 state houses.

    Kate Hansen, a spokeswoman for the Democratic Governors Association, acknowledged that this is a tough year for Democrats, since they had more seats to defend.

    "We're pleased with the shape of the more competitive tossup races going into the homestretch — because we have excellent candidates focused on creating jobs and expanding opportunity, and we've made smart and early investments throughout the year," Hansen said.

    The Associated Press contributed to this report.

    More election coverage from NBCNews.com:

    Follow NBC Politics on Twitter and Facebook