INDIAN WELLS, Calif. — Republicans in Congress faced a near-mutiny last fall from some wealthy GOP donors frustrated with Washington’s inability to get anything done. Then they passed the tax bill.
Now the checkbooks are open again, the party’s top bankrollers say — just in time for a challenging midterm election cycle.
Attendees at a weekend retreat here for donors and operatives affiliated with the political network helmed by brothers Charles and David Koch cited the GOP’s legislative breakthrough last month as a main reason for their renewed optimism heading into the midterms. The sense that donors wouldn’t reach for their wallets for the 2018 elections — frequent in the late summer and fall — has all but evaporated following the enactment of legislation overhauling the tax code, which delivered a number of long-standing conservative policy goals.
“Luckily, the Senate passed tax reform and someone came up with the brilliant idea of repealing the individual mandate — which essentially shoots a hole in the boat of [the Affordable Care Act] so it will die a slow, simple death,” Texas-based donor and fundraiser Doug Deason. “The gravy was drilling in [the Arctic National Wildlife Refuge], which Republicans have wanted forever.”
Deason, who was one such donor frustrated with the party’s efforts, built a Lone Star State coalition of wealthy Republican donors last year who refused to give money to Washington Republicans until the gridlock broke in Congress. Pleased with the tax reform efforts, he said he’s since called off the strike.
There are signs spending is beginning to pick up among the donor class — even before tax reform was done. House Republicans cashed their first big checks of the midterm election cycle from Charles Koch and his wife, Elizabeth, shortly before the final tax bill cleared Congress. The pair donated close to $1 million at the end of November, campaign finance records show.
Within days of the tax bill passing the Senate, several other GOP donors started cutting checks too: Marlene Ricketts, whose family owns the Chicago Cubs, Metro Bank founder Vernon Hill and coal magnate Joseph Craft each gave between $50,000 and $100,000 to House Republicans’ committees after not making large donations to federal candidates for the first 11 months of the year.
Some donors want more than just the tax overhaul — raising the stakes for Republicans in Congress to rack up more legislative achievements, even in an election year.
“There [were] a lot of people holding back in 2017,” said North Carolina donor and activist Art Pope. “If Republicans continue to build on their success with tax reform, if they can get a better budget and immigration policy, a lot of those donors who sat on the sidelines — small-dollar donors and big-dollar donors — will come full strength.”
Republicans will need the money: The party is facing a challenging 2018 election cycle, threatened by an energized Democratic base and an unpredictable White House. Democrats’ victory in the Alabama Senate race and unexpected pickups in local races in 2017 have unnerved some strategists, who see signs of a coming wave election.
A number of GOP candidates in key races have raised only fractions of the money their Democratic opponents have collected. In the Missouri Senate race, one of the Kochs’ top targets this year, GOP state Attorney General Josh Hawley ended last September with $780,000, just over 10 percent of incumbent Claire McCaskill’s $7.1 million stash.
And the National Republican Senatorial Committee, charged with growing Republicans’ Senate majority, had $10 million in debt as of the end of November, the most recent fundraising disclosure deadline.
The Koch network is readying to spend at full blast, with plans to lay out $400 million helping to defend Republican majorities in Congress. “These elections are going to be brutally tough,” warned Emily Seidel, the CEO of the Koch-backed nonprofit group Americans for Prosperity. “So what are we going to do about it? We’re going all in.”
Some donors and fundraisers remain concerned about President Donald Trump, and said they’re unsure of the White House’s strategy heading into the midterms and flustered with Trump’s focus on fundraising for his own reelection.
“He’s his own worst enemy,” said Tom Shepherd, an Ohio-based Koch network donor who works in chemical manufacturing. “President Trump is not helping get many Republicans elected. He’s doing more harm than good, because he’s distracting people from the good work that’s going on.”
Shepherd expressed concern about Trump’s “ugly, distracting” public statements but, like many donors present at the Koch seminar, he said he was thrilled with the breakthroughs in Washington on long-sought conservative achievements.
“If I had gone into a coma two years ago and woke up today — and just read today what has been accomplished — I’d be thrilled. Shocked and thrilled,” Shepherd said.
For a time, frustration last year with Washington gridlock created an opening for former Trump strategist Steve Bannon, who aimed to topple the Republican establishment in Congress. Donors and fundraisers interviewed by POLITICO said that window has since closed as Republicans notched victories in Washington and Bannon fell out of favor with his most powerful supporters, the megadonor conservative Robert Mercer and his daughter Rebekah.
Bannon courted top donors including Home Depot founder Bernie Marcus and casino magnate Sheldon Adelson over the summer and fall, but interest in his plans appears to have faded after Bannon’s public falling out with Trump and the Mercers. The secretive Mercer family has not disclosed any plans for spending during the midterms, though Robert and Diana Mercer did donate $300,000 to a super PAC supporting Arizona GOP Senate candidate Kelli Ward last July.
Dan Eberhart, an Arizona oil investor who vocally criticized Republicans on their Obamacare failure, met with Bannon multiple times and considered supporting his proposal to build an insurgent movement within the Republican Party last year.
“As a fundraiser and donor, I was furious that they raised all this money on repeal and replace, and then seemed to have no plan when they got the majority and the White House,” Eberhart said.
These days, it seems like Bannon’s insurgency “is over,” Eberhart said. He plans to give money to the chief organizations associated with Senate Republicans, the NRSC and the Senate Leadership Fund, both groups aligned with Majority Leader Mitch McConnell, and is hosting several fundraisers for GOP Senate candidates in the weeks ahead.
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