Western North Carolina Congressman Heath Shuler’s third quarter campaign financing report indicates that the 11th Congressional race may actually be competitive next fall, as the two term incumbent raised only $87,178. Meanwhile, two GOP candidates vying for his seat, district attorney Jeff Hunt and Jackson County’s Mark Meadows posted impressive gains in the last quarter, each taking in more than Shuler. Democratic challenger and Asheville City-Councilman Cecil Bothwell took in a surprising $16,500 from individual contributions as well, besting Shuler by more than $6,000 in that particular category.
The campaign cycle is still in its infant stages and Shuler has already raised over $400,000 for his reelection bid next year. Although it is difficult to make predictions about the 2012 Congressional race from one quarter of fundraising, we can at least take a deeper look into the campaign finances of Shuler and his opponents.
Since politicians and candidates have to submit their campaign finance reports to the Federal Election Commission after each quarter, curious citizens and constituents alike have the opportunity to ascertain where the contributions are coming from. As the campaign begins to heat up, it should be intriguing to assess who or what entities are supporting Shuler and his challengers. Furthermore, an early look at their fundraising records may give us an early peak into the 2012 Congressional race.
“Our campaign has four times as many individual donors as all of the GOP candidates combined, and 16 times as many contributors as Rep. Heath Shuler,” said Democratic challenger Cecil Bothwell. “We out-raised Shuler in terms of individual donations as well. He had 14 contributors with a total of $10,000 and we had 227 supporters kick in $16,500,” added Bothwell.
Some notable contributions for Shuler this year, albeit modest amounts for Wall Street Investment banks, were from Goldman Sachs and J.P. Morgan Chase & Co. Goldman’s Political Action Committee contributed $1,000 to Shuler’s campaign in late March, while J.P. Morgan’s PAC gave Shuler $1,000 in the same quarter. Shuler also garnered a lot of support from union PACs as well.
Earlier this year, J.P. Morgan agreed to pay $153.6 million in a settlement for civil fraud charges after the U.S. Securities Exchange Commission launched an investigation into the bank’s alleged wrongdoing leading up to the 2008 financial crisis. Goldman Sachs Inc. also settled with the S.E.C in July of 2010, acquiescing for $550 million in claims after federal regulators conducted an investigation into their corporation’s past behavior. Both banks still deny any wrongdoing. Yet their sizable settlements imply otherwise.
The implosion of the financial industry in 2008 brought the world economy to the brink and led directly to the unpopular government bailout notoriously known as TARP, followed by months of huge job losses and the worst economic slump since the Great Depression.
The root causes of the financial collapse are extremely nuanced and mired in past public policy decisions. Goldman Sachs and J.P Morgan are not solely responsible for the collapse. However, they were accused of selling junk securities to their clients, among other things, which is why they were scrutinized by Congressional members after the financial meltdown.
It is also why Congressman Shuler’s contributions from the two banks raises questions. “The biggest difference between our campaign fundraising and the others is that I will not accept corporate or PAC money,” continued Bothwell. “Our campaigns and our government should be owned by the people, not fat cats and corporate raiders,” he said.
Representative Shuler did vote in support of the 2009 financial regulatory reform bill, a law that created the Consumer Financial Protection Bureau, imposed more regulations on the banking industries derivatives market, and enacted stricter capital requirements for banks to abide by. Shuler also voted against the TARP bailout not once, but two times in the fall of 2008. Many Republican Congressmen voted for TARP, including North Carolina Senator Richard Burr and GOP budget guru Paul Ryan. It would be very misleading to insinuate that Representative Shuler’s contributors influence his votes, but they certainly give off a negative impression.
“I can understand the concerns of people looking at those records, but you have to consider two important points,” commented Macon County Democratic Party Chairman Ben Utley. “The nature of the campaign process makes it very expensive to run a campaign and compete, particularly media costs. I also think the amount of money Republicans get from people like Art Pope and other outside sources makes it even more difficult for Democrats to compete in elections,” continued Chairman Utley. “I think, unfortunately, more than anything else this is a consequence of rising campaign costs,” he concluded.
The American Bankers Association, an organization that represents the nation’s $13 trillion banking industry and its two million employees, contributed a total of $5,000 to Shuler’s campaign in March and June of this year. The organization strongly opposed the Dodd-Frank financial reform law, citing how the law’s excessive regulations are impairing the ability of community banks to serve customers and local communities. Shuler’s vote in favor of the financial regulatory reform law further demonstrates the Congressman’s independence, but the ABA’s and other financing sources to his campaign undoubtedly paint a less than favorable view of Shuler’s fundraising strategy.
“The appearance of corruption is nearly as bad as actual corruption in government because it diminishes citizen trust in government,” stated Democratic challenger Cecil Bothwell. “Whether the $1,000 from Goldman Sachs or J.P. Morgan influenced particular votes, or whether $24,000 from AT&T has led Shuler to become the lead congressional cheerleader for the AT&T/T-Mobile merger, it is hard to see such donations as anything other than influence peddling. That's why I won't take corporate donations,” concluded Bothwell.
Last quarter, GOP candidate Mark Meadows self-financed his campaign, loaning himself $251,200. The next closest Republican challenger, Jeff Hunt, managed to reign in $89,978 in individual contributions, while doling out an $11,600 loan from his own pockets. Thus far, every GOP challenger has relied exclusively on individual contributions and their own savings accounts to support their campaigns. The same holds true for Democratic challenger Cecil Bothwell.
“Perhaps Shuler should consider using some of the campaign contributions he is getting from the countries wealthiest banks, who took billions in US bailout tax dollars to bring a few new jobs to the 11th district,” said GOP challenger Mark Meadows. “If Mr. Shuler and the Obama administration had provided a foundation for more jobs in Western North Carolina, they would have found more than enough campaign money from within the district to support his reelection,” continued Meadows. “I find it difficult to understand why Heath Shuler would cast votes consistently with the Obama administration in a pro-union manner when most of our jobs in WNC are not union,” Meadows added in discussing Shuler’s latest campaign finance reports
When studying the financing of political campaigns nationwide, the conversation seemingly always turns to campaign finance reform. As Democratic Chairman Ben Utley alluded to, political campaigning is perpetual and expensive in America. Senator Jim Davis previously stated that “money is the mother’s milk of politics,” and that is an accurate, non-partisan statement.
Congress has a tendency to be reactive in passing reform laws, as history shows. It took the assassination of President Garfield for Congress to act in terminating the spoils system in the Federal civil service system in the late 19th century.
What will it take to eliminate or diminish the influence of money in campaigns, or does the system need to be remedied at all? President Obama broke his promise in 2008 when he opted out of the public financing system, a dissapointing decision to GOP Presidential nominee John McCain. Perhaps we should not differentiate between Duke Energy and John Doe. As GOP Presidential frontrunner Mitt Romney stated back in August, “corporations are people, my friend.”