Reed PAC Funnels Cash Across Country
Monday, May 23, 2011
WASHINGTON — He did not have an election last fall. But U.S. Sen. Jack Reed raised almost $315,000 over the 2010 election cycle through his Narragansett Bay PAC, a federal account that does not bear his name but used his influence to funnel money from powerful interests across the nation to politicians virtually everywhere but back home.
A GoLocalProv examination of the account, the kind of “leadership PAC” not uncommon among members of Congress, shows that the financial and defense industries are using the fund to supplement a flood of donations to the Reed Committee, the primary account that Rhode Island’s senior senator uses to fuel his traditional campaign apparatus.
Taking advantage of such donations, the Narragansett Bay PAC actually raised more in 2009 and 2010 than the Reed Committee.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTJust a fraction of the leadership PAC’s receipts came from individual donors and almost none came from Rhode Island. And nearly as fast as it came in, the money was distributed to politicians from Alaska to California to Connecticut – all corners of the nation but to his Ocean State Congressional colleagues facing their own electoral battles.
"Mystery PACs"
Washington-based watchdogs, like the Center for Responsive Politics, said that Reed and other lawmakers use leadership PACs as vehicles to leverage Capitol Hill clout to boost personal ambitions.
“It’s become a very popular vehicle for extending one’s political influence – being able to raise extra sums of money so that you can spread it around to your political brethren,” said David Levinthal, spokesman for the Center for Responsive Politics. “It’s also definitely a way for special interests to expand their clout with a member of Congress.”
Some watchdogs describe the funds as “mystery PACs,” because it’s often difficult for outsiders to determine their connection to lawmakers. The Narragansett Bay PAC’s quarterly filings with the Federal Election Commission, for example, list only the name of Elizabeth R. Young, a $1,000-a-month treasurer with an East Falmouth, Mass. address.
The use of such funds is sometimes controversial. And given its limited connection to his home state and laws that prevent Reed from using the money for his own re-election, GoLocalProv asked the senator’s office why his exists.
The Goal of Narragansett PAC
A spokesman offered this general response when asked a host of specific questions
"The goal of Narragansett Bay PAC is to help elect candidates who support policies to create good jobs, protect consumers, and provide working families with the opportunity to build a better life. The PAC strictly follows every disclosure rule showing all contributions and expenditures," Reed spokesman Chip Unruh said.
Indeed, reports filed with the Federal Election Commission detail the source of every dollar that flowed into the Narragansett Bay PAC and where the donations ultimately landed.
Cash Flows From Financial Industry
No industry has given more to the Narragansett Bay PAC than the financial industry, those firms and individuals who make their living working with securities, investments, insurance, banking or real estate, according to a tally compiled by the Center for Responsive Politics and an analysis by GoLocalProv.
Reed’s leadership PAC accepted roughly $130,000 from the broad financial industry in the 2010 cycle, which includes all of 2009 and 2010 and is the last full cycle for which data is available.
Over that time, Reed was a leading player in the debate over financial regulatory reform following the international financial meltdown. He also sat on the Senate Banking, Housing and Urban Affairs Committee, a panel for which he chairs the influential Subcommittee on Securities, Insurance and Investment.
The three-term senator drew criticism during his 2008 re-election campaign for being among the nation’s leading recipients of donations from the financial sector. But that did not slow the flow of such donations to both his traditional campaign account and his leadership PAC, which offers donors another avenue – and one with higher annual limits – to help the senator.
Reed has consistently said that such donations have no impact on his work on Capitol Hill. But Levinthal, of the Center for Responsive Politics, suggests that donors are usually looking to get something out of their investment.
“They want access to you. They want a relationship with you. Sometimes the best way to a working relationship is lined with lots and lots and dollars,” he said.
The Financial Services Roundtable gave the Reed Committee $1,000 last cycle. But the Washington-D.C. based political action committee gave another $7,000 to the Narragansett Bay PAC, according to an analysis by GoLocalProv using data compiled by CQ-Moneyline.
Similarly, the Investment Adviser Association gave Reed’s campaign $2,500, while the Investment Company Institute gave his leadership PAC another $10,000. Other interests ignored the campaign committee altogether as well in favor of the Narragansett Bay PAC. The Managed Fund Association gave $10,000 to the leadership PAC, for example, and nothing to the Reed Committee.
The Defense Industry
The defense industry was among the most active donors as well.
The Narraganset Bay PAC took $10,000 from Lockheed Martin; $10,000 from General Dynamics; $6,000 from General Electric; and $5,000 from Honeywell International, among other major players in the defense industry.
Reed, of course, is one of the few senators serving on both the Senate’s Armed Services Committee and Appropriations Committee, which largely controls Congress’ purse strings.
It’s worth noting that just a fraction of Reed’s leadership PAC’s receipt come from individuals, in contrast to his colleagues like Rhode Island’s junior Sen. Sheldon Whitehouse.
The Narragansett Bay PAC received less than $61,000 from individuals – or 19 percent of its total receipts for the two-year cycle – and more than $249,000, 79 percent, from other entities and political action committees. (The percentages don’t total 100 because a small balance was carried forward from the previous cycle.)
Of the 54 individuals who gave to the Narragansett Bay PAC, just seven were Rhode Islanders who donated a combined $14,278. That’s roughly 4 percent of the total receipts.
Money Flows Out Virtually Everywhere
As Reed’s office explains, the goal of the leadership PAC is to help elect like-minded candidates. And campaign finance reports show a trail of such donations to Democrats across the nation.
He used the Narragansett Bay PAC to send $30,000 to the Democratic Senatorial Campaign Committee, the Capitol Hill-based organization dedicated to electing Democrats to the Senate. And Reed donated to a host of senators who ultimately won their 2010 battles, including Senate Majority Leader Harry Reid ($10,000), California Sen. Barbara Boxer ($10,000), and newly-elected Connecticut Sen. Richard Blumenthal ($10,000), according to data compiled by CQ-Moneyline.
The Narragansett Bay PAC also helped a host of candidates who ultimately lost. They include long-shot Alaska Democratic Senate candidate Scott McAdams ($2,500), former Wisconsin Sen. Russ Feingold ($6,500), and former Connecticut Sen. Chris Dodd ($5,000).
But the Narragansett PAC ignored U.S. Rep. James Langevin and David Cicilline, who last cycle was locked in a race that was ultimately much closer than outsiders expected. Reed did not ignore Rhode Island Democrats altogether, however, directing $5,000 to the state Democratic Party.
He's Not Alone
Every member of Rhode Island’s Congressional delegation had a leadership PAC last cycle.
Langevin had the Ocean State PAC and former U.S. Rep. Patrick Kennedy had Rhode Island PAC, although neither committee raised anywhere close to that of Reed. Whitehouse’s Rhode Island Hope PAC, however, has quickly established itself as a major player, having raised slightly more than Reed – $337,000 – over the last two years.
Indeed, Levinthal notes that many lawmakers, regardless of their time in Washington or level of influence have turned to leadership PACs as a tool to get ahead on Capitol Hill.
Freshman Rep. David Cicilline will soon join in as well. A campaign spokesman confirmed that Cicilline will take over Kennedy’s Rhode Island PAC.
The transfer hasn’t formally happened yet, but look for Cicilline’s leadership PAC to become active soon.
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