Tags: Wall Street | Kochs | Fuel | Senate | Race

Wall Street, Kochs Fuel Most Expensive US Senate Race Ever

Wall Street, Kochs Fuel Most Expensive US Senate Race Ever

Pat Toomey. (AP Images)

Thursday, 03 November 2016 08:42 AM EDT

The most expensive U.S. Senate race in history is unfolding in Pennsylvania, where Wall Street, unions and billionaire industrialists Charles and David Koch are flooding the state with money.

At least $139 million has been spent by advocacy groups and the candidates, Republican incumbent Pat Toomey and Democrat Katie McGinty, Federal Election Commission filings show. The money has paid for legions of door-to-door canvassers and about 449 hours of negative television ads over the past six months.

The record spending shows that both parties see Pennsylvania as pivotal in the all-out battle for the Senate. Of the 34 open seats this year, it's one of six that are considered a statistical toss-up, according to RealClearPolitics polling averages.

On top of that, Toomey's place on the Senate committees that oversee banks and tax policy raises the stakes for the financial industry and other corporations.

The biggest source of money in the race is the Democrats' super-PAC, the Senate Majority PAC, which has spent about $19.9 million so far. Its Republican counterpart, the Senate Leadership Fund, has spent about $11.7 million. Casino magnate Sheldon Adelson gave the group $20 million in August.

Banks, Hedge Funds

There are 18 other groups that have spent more than $1 million on the race. Among those supporting Toomey are the Kochs' Freedom Partners Action Fund, the U.S. Chamber of Commerce, and Club for Growth Action. Others, including Majority Forward, Women Vote!, and Planned Parenthood's political arm are backing McGinty.

Employees from banks, hedge funds and private equity firms have given about $4.6 million to Toomey's campaign and two allied committees. McGinty has taken in $361,120 in donations from those groups. Toomey, a former president of free-market advocate Club for Growth, worked in finance, including a stint as a derivatives trader, before embarking on a political career.

If he were to lose, it could leave the industry with fewer allies on the committee that shapes financial regulation and vets key appointments at agencies like the Treasury Department and the Securities and Exchange Commission.

His ties to Wall Street have formed McGinty's main line of attack. She has aligned herself with Senator Elizabeth Warren, who is loved by progressive Democrats for being a consistent and vocal critic of banks. McGinty joined Warren on a September conference call with reporters to chastise Wells Fargo & Co.'s former chief executive officer, John Stumpf, after the company was found to have created millions of bogus accounts without customers' knowledge.

On the call, the women pledged to work together to stop legislation supported by Toomey to gut the Consumer Financial Protection Bureau, one of the agencies that sanctioned Wells Fargo. McGinty has continued to bring up Wells Fargo and the CFPB on the campaign trail. 

"Either you believe that those who would defraud innocent consumers should be held accountable — as Senator Warren and I do — or you focus on reducing the chances that fraudulent behavior comes to light and is rooted out — as Pat Toomey does," McGinty said in an e-mailed statement to Bloomberg News.

Double Whammy

In addition to McGinty's campaign, the American Federation of State, County and Municipal Employees and the End Citizens United super-PAC have funded ads attacking Toomey with anti-Wall Street themes.

Toomey, who has also been critical of Wells Fargo, didn't respond to requests for comment.

A risk for banks is that if Toomey losses it could serve as a double whammy. Lenders would relinquish a senator in a key post who they consider receptive to their issues, while gaining a lawmaker who seems inclined to align herself with Warren's growing political posse.

Should McGinty win, voters will expect her to take an active role on financial issues, because reigning in Wall Street has been a recurring theme of her campaign, said Mike Gehrke, research director for For Our Future, a super-PAC funded by unions.

'Shady Dealings'

"It's an issue that sticks," Gehrke said.

McGinty's background as head of Pennsylvania's Department of Environmental Protection has drawn attacks from Toomey's side. In that role, she played a role in awarding subsidies to alternative energy companies. Americans for Prosperity, Club for Growth, Freedom Partners Action Fund and the Senate Leadership Fund have all run ads accusing McGinty of personally profiting from decisions she made in that position.

"They tried to launch an all-out assault on Pat Toomey, and we've fought back to expose the McGinty record of shady dealings," said David McIntosh, the president of Club for Growth.

Aiding McGinty is a joint effort by the League of Conservation Voters and the United Steelworkers union, which created the New American Jobs Fund super-PAC. Canvassers have connected with about 45,000 likely voters around Pittsburgh and about 119,000 in Philadelphia.

The canvassers ask voters to sign a pledge that they'll turn out to vote, and steer the conversation toward jobs, education and the environment. So far, the group has spent about $1.8 million.

Kochs' Money

Meanwhile, the Kochs' have two groups active in the state attacking McGinty. Freedom Partners Action Fund has spent $7.3 million on television ads, and Americans for Prosperity, the biggest and oldest of the Kochs' grassroots groups, has pumped about $2.4 million into canvassing, phone banks, printed materials and digital ads, mainly criticizing McGinty for her support of the Affordable Care Act.

Beth Anne Mumford, state director for the group, said they've made 2 million phone calls and knocked on 135,000 doors to get voters out for Toomey.

Also among the biggest Toomey supporters is Michael Bloomberg, whose super-PAC, Independence USA, has spent about $3 million supporting the Republican. Bloomberg is the founder and majority owner of Bloomberg LP, the parent of Bloomberg News.

The race is being complicated by the presidential contest. While McGinty has closely linked her campaign to Hillary Clinton's, Toomey has declined to endorse his party's nominee, Donald Trump.

Tuning Out

Pennsylvania is also a presidential battleground state, and recent polls suggest that Clinton's lead over Trump has narrowed since new revelations about the Federal Bureau of Investigation's probe into her handling of classified information while she was Secretary of State.

There are signs that the sordid headlines dominating the White House run are overshadowing the Senate race, raising doubts about whether the money spent on Toomey and McGinty has made much of an impact.

"I can't believe that our candidates are having the kind of problems in the spotlight that they are," Hollie Johns, a resident of York in the southeastern part of the state, said of Clinton and Trump.

Johns said she's considering writing in a candidate for president, and as for the Senate race, she hasn't been following it.

© Copyright 2024 Bloomberg News. All rights reserved.

The most expensive U.S. Senate race in history is unfolding in Pennsylvania, where Wall Street, unions and billionaire industrialists Charles and David Koch are flooding the state with money.
Wall Street, Kochs, Fuel, Senate, Race
Thursday, 03 November 2016 08:42 AM
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