Outside Groups Pump Money Into Vermont's Race For Governor

Aug 4, 2016

As Primary Day nears, outside groups have begun pouring hundreds of thousands of dollars into Vermont’s races for governor, and yet more cash could find its way into the election before Tuesday’s vote.

California billionaire Reid Hoffman, the co-founder of the professional-networking site LinkedIn, is spending $220,000 on television and radio advertisements in support of Democratic candidate for governor Matt Dunne, according to a mass-media disclosure filed Wednesday at the Secretary of State’s Office. 

Seven Days' Paul Heintz reported the news first. Heintz was also the first to report that a super PAC headed by a former Montpelier lobbyist is readying its own television ad blitz in support of Dunne’s rival, Sue Minter. The group is already reporting ad buys of $120,000. And the president of the super PAC, called Vermonters for Strong Leadership, says he expects ad buys totaling somewhere below $200,000 between now and next Tuesday. 

On the Republican side, the American Future Fund Political Action Committee, based in Alexandria, Virginia, disclosed on Thursday that it’s spending $27,000 on radio and television ads in the GOP primary race between Phil Scott and Bruce Lisman. Neal Goswami of the Vermont Press Bureau was the first to report that news.The group is spending money on ads that disparage Scott, according to Scott's campaign.

'A new landscape in Vermont politics'

Secretary of State Jim Condos says independent expenditures by outside groups are nothing new in Vermont. But Condos says expenditures of this size and scope in a primary are extraordinary.

“We are seeing the dawning of a new landscape in Vermont politics and we’re seeing a lot of outside money coming in, and it looks like it’s going to grow,” Condos says.

Hoffman, a Silicon Valley billionaire, is among the tech-industry luminaries that have given maximum contributions to Dunne, a former Google executive. Hoffman didn’t immediately respond to inquiries, but mass-media disclosures required by state and federal law indicate he’s spending $144,000 on television ads, $44,000 on radio and $22,000 on online ads.

“It came as a surprise,” Dunne said Thursday of learning of the ad buys on his behalf. 

"We're seeing a lot of outside money coming in, and it looks like it's going to grow." - Secretary of State Jim Condos

In a debate on VPR’s Vermont Edition Thursday, Peter Galbraith, the third candidate in the Democratic primary race, called on both Dunne and Minter to denounce the outside expenditures. Neither was willing to do so.

“Reid Hoffman spent his teenage years in Vermont. He is a friend,” Dunne said. “And he’s getting involved in the most transparent way possible, making a statement and putting his name on it.”

Minter said she continues to oppose the influence of outside money in politics, despite the fact that she’s now the beneficiary of those expenditures.

“I want to overthrow Citizens United. I am against super PACs. I think the role of big money in politics is undermining our democracy in very serious ways,” Minter said. “I had no idea about the development of resources to do an ad. There’s nothing I can do to coordinate with this – that would be a violation of the law.”

National and local donors

State and federal law allows for outside groups to spend unlimited sums to influence the outcomes of elections, so long as they disclose the sources of their donors, and don’t coordinate with the campaigns of the candidates they’re working to boost.

Hoffman, whose net worth was most recently estimated by Forbes Magazine at nearly $4 billion, is paying for the ads for Dunne. 

The identities of the donors behind the pro-Minter super PAC haven’t yet been disclosed. Bob Sherman, former partner at the prominent Montpelier lobbying outfit, KSE Partners, and president of Vermonters for Strong Leadership, says contributors include Women Vote, a political action committee run by EMILY’s List, a national group working to bolster the electoral prospects of female candidates nationally. 

Sherman says Vermonters for Strong Leadership also has local donors, including Arthur and Anne Berndt, two major Democratic donors.

"Some people don't like it [the activity of super PACs]. But it's legal and it's effective." - Bob Sherman, Vermonters for Strong Leadership president

Sherman, now retired, says it’s become apparent to him over the course of the primary that “Sue Minter is by far the best candidate.”

“She’s smart, she’s brave – she’s politically brave – she’s progressive, and she’s taken positions that I support,” Sherman says.

Sherman says Minter had no advance notice of the ad buys. Sherman says he understands that many Vermont voters view super PACs as a scourge on the electoral process.

“Some people don’t like it,” Sherman says. “But it’s legal and it’s effective.”

Exploiting low turnout

Effective, according to Sherman, because in a low-turnout primary like the one expected next Tuesday, a candidate’s presence on the media airwaves will be critical.

“It’s August. People have paid really close attention to the race for president, as they should. But we have a primary in a week in a race for governor in which maybe 75,000 people will vote,” Sherman says. “Every vote always matters, but in a race with few voters going to the polls, it’s even more so. [These advertisements are] another vehicle for putting out information about the candidate. That’s what it is.”

Outside aid from well-funded super PACs, however, comes with drawbacks as well. VPR interviewed Sherman at a coffee shop in Montpelier, within earshot of a nearby customer working on his laptop.

After the interview, Jonathan Weker said he was listening with interest as Sherman explained the rationale behind engaging in the electoral process via a super PAC.

"I call Citizens United the 'Death to America' decision, personally." - Jonathan Weker, Montpelier resident

“I call Citizens United the ‘Death to America’ decision, personally,” Weker, a Montpelier resident, said. “I think it’s a very threatening development.”

Weker says with so much money flowing into elections these days, he sympathizes with the plight of candidates who might otherwise denounce the outside groups supporting them.

“A well-meaning politician, and I do believe there are such people, finds him or herself in a very tough position around that these days, because the reality is if one candidate decided to run a non-privately and heavily financed campaign, that candidate’s realistically at a disadvantage,” Weker says.

Perceptions of influence

But while outside money “may be a necessary evil,” Weker says he’s less likely to support candidates who enjoy the support of super PACs, even if he’s aligned with them on the issues.

“There’s no such thing as a free lunch,” Weker says. 

Weker says he thinks super PAC donors “are going to have different levels of access to people and to public servants, and certain contributors are going to get a disproportionate voice, disproportional attention.”

“It will make how they then serve in office be different from if they hadn’t done that,” Weker says.

That’s the argument being made by Galbraith, the one Democrat whose campaign isn’t getting a lift from outside groups.

“When you put that kind of money in, somebody wants something,” Galbraith said during the Vermont Edition debate.

Galbraith says he doesn’t “believe for a second” that the outside groups aren’t coordinating with the candidates they’re supporting. He says he finds Hoffman’s expenditures on behalf of Dunne especially problematic.

“What is going on now is absolutely unprecedented,” Galbraith says. “We have somebody from out of state, an individual, who is dumping $220,000 in advertising in the last four days of a gubernatorial primary.”

The American Future Fund Political Action Committee did not return a call Thursday. Goswami reports that two former executives of defunct Wall Street firm Bear Stearns, Warren Spector and Robert Steinberg, are the only two contributors to the super PAC, according to filings at the Secretary of State's Office. 

Lisman was formerly head of global equities at Bear Stearns.

Spector and Steinberg contributed a total of $30,000, according to the disclosures.

This post was edited at 5:58 p.m. on 8/4/16 to correct the purpose of the ad buys in the GOP primary race