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August 27, 2014

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CAMPAIGN FINANCE:

For donors, no clear choice for governor

Nevada’s political ‘establishment’ spreading the wealth

Rory Reid

Rory Reid

Brian Sandoval

Brian Sandoval

Michael Montandon

Michael Montandon

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For the first time in decades, Nevada’s political establishment seems unable to settle on a candidate for governor, funneling large campaign contributions to both Democrat Rory Reid and Republican Brian Sandoval while abandoning incumbent Gov. Jim Gibbons, according to a review of campaign finance reports by the Las Vegas Sun.

In past gubernatorial elections, the establishment and its money — largely gaming, development, mining and prominent law and lobbying firms — have clearly backed a single candidate for governor. And the candidate with that backing has used the decisive advantage as the path to Carson City.

In 2006, the establishment put the bulk of its resources behind Gibbons. Before that it was Kenny Guinn, Bob Miller, Richard Bryan and, in his first term, Bob List.

This election cycle appears to be different. Political observers say the fundraising picture reflects Nevada’s political status as a purple state, in large part because of years of Democratic organizing and the voter excitement surrounding the 2008 presidential election. And because Gibbons is seen as a weak and vulnerable incumbent, donors are effectively treating the race as an open-seat election, hence big totals for Reid, the likely Democratic nominee, and Sandoval, the favored Republican.

Both candidates tapped Nevada’s largest companies in a variety of industries.

As UNR political scientist Eric Herzik put it: “Donors are playing both sides, and the closer the race, the closer the giving.”

Clark County Commission Chairman Reid raised about $3 million from late 2008 through 2009, and transferred another $336,000 from his County Commission campaign account to his gubernatorial race. Former federal Judge Sandoval raised $900,000 since mid-September, when he formally announced he was running for office. He resigned from his lifetime appointment to the bench in August.

“It’s been awhile since Nevada has had a competitive race for governor,” said Terry Murphy, a political consultant supporting Reid. “It’s not a bad thing to force a good conversation about what we want as a state.”

But others see the dual-backing of the candidates as something more insidious, viewing it as the captains of industry assuring access to the Governor’s Mansion regardless of who wins.

Republican candidate Mike Montandon, the former four-term mayor of North Las Vegas, pointed to the state’s history of political anointment.

In his book “The Anointed One,” Las Vegas Sun columnist Jon Ralston detailed how the process worked when Guinn was first elected governor in 1998, illustrating the prominent role of executives at R&R Partners, a lobbying and marketing firm.

This year, Pete Ernaut, who managed Guinn’s first campaign and is an R&R principal and Reno-based president of the firm’s lobbying operation, is an informal adviser to Sandoval. Billy Vassiliadis, the firm’s Las Vegas-based CEO, is a Democratic power broker and informal adviser to Sen. Harry Reid’s re-election campaign.

Montandon, who raised $326,000, said of his opponents’ fundraising: “R&R’s southern office is running one candidate, R&R’s northern office is running the other.”

Montandon did boast, though, that he has raised almost three times what the incumbent governor raised last year.

Still, Montandon is hovering in single-digits in polling and must do more to boost his name recognition beyond the city he led as mayor. Much of his money came from his development connections, including $50,000 from foreign-based donors with past and present real estate investments in North Las Vegas. Montandon said the donors, whose addresses are listed as Hong Kong, are executives of an American company and longtime supporters.

After funding Gibbons’ $6 million campaign in 2006, the establishment has now forsaken him. He raised $423,950 over the past two years, with only $165,000 coming in 2009. The governor spent most of his 2009 haul on a now-fired campaign manager.

At this point in the campaign four years ago, Gibbons had raised $2.65 million, with bundled contributions of $10,000 checks from gaming companies, developers and mining companies.

(There’s a $10,000 limit on campaign contributions, but the largest entities have each subsidiary they own fire off $10,000 checks. Some reports read like a drive down the Strip: Mandalay Bay, Luxor, Excalibur, etc.)

The most significant defection, at least symbolically, is Monte Miller, who hosted Gibbons’ first fundraiser when he ran for governor in 2006. Miller, his family and companies gave $50,000 to Sandoval in 2009, and in interviews said it’s an indication that he doesn’t believe Gibbons can win re-election.

UNLV political scientist David Damore called Gibbons’ fundraising “the exclamation point on the running joke,” noting the freewheeling nature of the governor’s re-election campaign. (Gibbons fired his campaign manager for saying that first ladies were largely “window dressing.”)

“When the incumbent governor raises what you would expect to see for an Assembly seat, this now has become an effectively open-seat race,” Damore said. “The establishment has left him.”

Herzik, chairman of UNR’s political science department, agreed.

“Money attracts money, and Gibbons didn’t raise very much so people don’t think he’s the one who’s going to win,” Herzik said. “It’s a vicious circle he’s in. I don’t know who is going to give him money now.”

Last week Gibbons sent out a fundraising appeal, arguing that he has kept his promise not to raise taxes but that the Legislature overrode his vetoes.

“There are those who say they can lead the state with Republican principles, but I am the only candidate who has proven that I have the leadership skills to guide Nevada through this tough time by fighting higher taxes and keeping government spending under control,” he wrote.

Although he retains the advantage of the bully pulpit, experts said Gibbons faces a tough — if not impossible — road to the Republican nomination. His conservative proposals, such as eliminating collective-bargaining rights for public employees, and his prodding of the Democratically controlled Legislature might rally the Republican base, but conservatives might be more pragmatic if they want to win in November, Herzik said.

“At some point, reality trumps ideology,” he said. “Conservatives are shopping for a viable candidate.”

And that could lead to Gibbons’ supporters defecting to Montandon, Herzik said.

The establishment, for the most part, is supporting neither.

MGM Mirage, the state’s largest private employer, has decided to back Reid, doling out at least $50,000 so far — half of a $100,000 commitment. Station Casinos, the locals casino giant, seems to be backing Reid as well. Apparently unencumbered by ongoing bankruptcy proceedings, Station, its executives and their families contributed at least $68,000 to Reid, while giving at least $5,000 to Sandoval.

Casino mogul Steve Wynn, however, seems to be leaning toward Sandoval, with his companies and executives giving at least $70,000 to the Republican and at least $25,000 to Reid.

Mining has backed both candidates.

Reid’s and Sandoval’s roots have also mattered. Sandoval took in 28 percent of his contributions from businesses and residents from Reno, Incline Village, Sparks or Carson City. For Reid, Northern Nevada is virtually untapped. Less than 2 percent of his Nevada money comes from outside Clark County.

Reid’s unique role in the 2008 presidential race, as chairman of Hillary Clinton’s Nevada campaign, has paid dividends elsewhere. Nearly 30 percent of his contributions, or $992,652, come from out-of-state donors. Nearly a third of that money hails from Clinton’s home state of New York ($125,441) and Washington, D.C., and the surrounding area ($181,266). Former Clinton advisers James Carville, Terry McAuliffe, Howard Wolfson and Harold Ickes all cut checks for Reid, as did Ron Burkle, the grocery-store magnate and friend of former President Bill Clinton.

The Clinton connections also seem to have opened up the fundraising doors of California donors, who contributed $321,560. Film producers Jerry Bruckheimer and Jeffrey Katzenberg are Reid supporters.

Sandoval got just 8.5 percent of his money from out of state.

Being the son of the U.S. Senate majority leader also helped Reid. A half-dozen of his father’s former and current aides, including former Chief of Staff Susan McCue, contributed to the campaign.

Reid’s colleagues on the County Commission are supporting his bid as well. Commissioners Tom Collins, Susan Brager and Steve Sisolak each gave $10,000. Other players in the county’s business community also maxed out on contributions, including Republic Services, the county’s trash hauler, and Ayala’s Inc., owner of concessions at McCarran International Airport.

David Cohen, Reid’s campaign manager, said the campaign would use the massive war chest to build what he called “the most aggressive, far-reaching organization in Nevada history.”

Sandoval’s campaign acknowledged it had work to do to catch up to Reid but was nevertheless cheered by Sandoval’s haul, given that he raised the money in little more than three months and has outpaced Reid since entering the race. It was bolstered by $155,000, or 17 percent of his total, raised in the last two days of the year.

Sandoval has also spent less since entering the race than Reid spent in the same time.

Of course, it’s unclear if Sandoval needs to match Reid’s fundraising total. He has a significant lead against Reid in head-to-head polls. The more significant question might be whether Gibbons can use his bully pulpit to gain traction in the primary. If that is the case, Sandoval could be dragged to the right and alienate independents and moderates, but more significantly could be forced to spend money just to win the Republican primary.

Still, donors — and experts — increasingly see Sandoval as the likely nominee.

“Gibbons needed to suck Sandoval into this ideological street fight with the Republican base,” Herzik said. “But in order to do that he has to get his message out that Sandoval is a Republican-in-Name-Only. His ability to do that is pretty limited now.”

Reid, meanwhile, has not drawn a primary challenger.

And the race for money continues.

“There’s a time factor that explains how Rory Reid has done: He asked first and he looked the best at the time,” Herzik said. “That’s changed to where Sandoval is a very potent opponent.”

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