Say Anything Blog

This column is being re-published from the Dakota Beacon.  If you aren’t a subscriber yet, you should be.

Politics is changing in North Dakota.  No longer are elections based on the quality of ideas in your head; rather, the quantity of money in your wallet.  For quite some time this has been very evident on the national scene.  According to the Center for Responsive Politics, campaign fundraising across the country for the 2006 election cycle increased 27% over 2002, the last mid-term election, to $2.8 billion.[1]

While federal candidates do the overwhelming majority of the fundraising, this money is no longer used only by the candidates who raise it.  Interest groups, political action committees, leadership funds, rich individuals, and leaders of virtually every economic sector have infiltrated elections at all levels across the country, even in North Dakota.  East and West coast money can be tracked all the way down to legislative campaigns all across the state.

First, it is important to note who the players are in North Dakota politics.  Kent Conrad, Earl Pomeroy, and Byron Dorgan use their DC connections to direct thousands and thousands of dollars into North Dakota elections.  The most efficient way they do this is by using their Leadership PACs.  According to Opensecrets.org, Leadership PACs are political action committees that are “not technically affiliated with the candidate,” but are a “way of raising money to help fund other candidates’ campaigns.”[2]

North Dakota’s Washington delegation also used their own PACs to funnel money down to local races, by making large donations to the North Dakota Democrat-NPL Party, which are then diverted to local races.

There is a clear line of funding from the East and West coasts to local races in North Dakota.  To follow the line, one must start from the most local level of partisan races - legislative districts.

Legislative Races

In the 2006 election cycle, the North Dakota Democrat legislative candidates raised about $230,034.  Keep in mind that these numbers are only comprised of reportable donations and any donation $200 or less does not get reported to the Secretary of State’s office.  Of the $230,034 raised in reportable contributions, thirty-four percent of it was raised from DakPAC (Kent Conrad’s Leadership PAC), Great Plains Leadership Fund (Byron Dorgan’s Leadership PAC), Nodak PAC (Earl Pomeroy’s Leadership PAC), PACs registered out of state, or from individuals out of state. 

When the North Dakota Democrat-NPL Party’s contributions are added to those figures, the percentage grows to forty-two percent, which means that forty-two percent of reportable contributions to Democrat legislative candidates are from the Democrat-NPL Party, Leadership PACs, or out of state interests.

That percentage grows further when District contributions are added to the equation.  For example, the District 3 Dem-NPL gave two thousand dollars to the district three Democrat candidates.  When district contributions are added, the percentage grows to forty-eight percent ($111,054.38).  In other words, almost half of all money contributed to Democrat legislative candidates was raised from the Dem-NPL, District Dem-NPL, Leadership PACs, or out of state interests. 

Statewide Races

Statewide races were influenced by other interests as well.  In reportable contributions, the Democrat statewide candidates raised $589,351.  Twenty-four percent of reportable contributions raised by Democrat statewide candidates were raised from Leadership PACs, PACs registered out of state, or individuals from out of state.  That number explodes to seventy-nine percent when contributions from the Dem-NPL are factored in.  The statewide candidates raised $466,471 from Leadership PACs, the Dem-NPL, or out of state interests. 

When it’s all said and done, Democrats running in statewide and legislative races raised $819,386.  Seventy-one percent ($577,525) of that money was raised from Leadership PACs, Dem-NPL, District Dem-NPL, or out of state interests.

That money was used for the barrage of TV and radio ads that ran throughout the campaign season.  It is no wonder why the number of Republican ads did not compare; one does not need to look any further than the figures presented.

The reason Leadership PACs, the Dem-NPL, and District Dem-NPL entities are lumped in with out of state interests is very simple, because the vast majority of their money is raised from out of state.

DakPAC

Dak PAC is Sen. Kent Conrad’s Leadership PAC.  According to candidate disclosure reports, Dak PAC contributed $94,650 to legislative and statewide races.  Tax Commissioner Candidate Brent Edison received $15,000 from this source; Agriculture Commissioner Roger Johnson, $15,000; Secretary of State Candidate Kristin Hedger, $1,500; Attorney General Candidate Bill Brudvik, $2,500.  The balance was given to legislative candidates, with District 35 Senate Candidate Tracy Potter receiving the most ($4,000).

Dak PAC receives its contributions from two sources, individuals and committees or PACs.  Individuals gave reportable contributions of $22,900.  Fifteen thousand nine-hundred (69%) of it was contributed by folks living in Maryland and Washington DC.

Committees or PACs contributed $238,000 to Dak PAC in the last two years.  These PACs are largely from the financial or insurance industries and unions, which have little or no interest in North Dakota politics.  Their motivations for contributing to Dak PAC have more to do with Sen. Conrad’s seniority in the Senate or position on the Finance Committee than they do with caring whether or not Brent Edison is North Dakota’s Tax Commissioner or if Tom Fiebiger becomes District 45’s State Senator.  Most likely, union leaders and financial power brokers are using funds acquired by donations from their workers or members and pass them on to Sen. Conrad.  Those folks would care about North Dakota even less.

Great Plains Leadership Fund

Great Plains Leadership Fund is Byron Dorgan’s Leadership PAC.  According to candidate disclosure reports, Sen. Dorgan, through his Leadership PAC, gave Democrat statewide candidates reportable contributions of $22,500.  In the last two years, Great Plains Leadership Fund received individual reportable contributions of $27,750.  That entire amount was raised by individuals out of state.  Committees contributed $305,700.  Here is a partial list of those committees:  American Resort Development Association Resort Owners Coalition PAC, Association of Trial Lawyers of America Political Action Committee, and Time Warner Telecom INC. Political Action Committee.  Money was also contributed by numerous labor unions and financial institutions.

Like Sen. Conrad, these contributions are made to get Sen. Dorgan on their good side, rather than because they care if Cheryl Bergian becomes a Public Service Commissioner in North Dakota.  Byron Dorgan’s position within the Democrat Caucus in Washington means much more to those entities.  Senators Conrad and Dorgan do not even use these funds as part of their own re-election campaigns.  The funds solicited by the Leadership PACs are given to other candidates. 

NoDak PAC

NoDak PAC is Earl Pomeroy’s Leadership PAC.  This PAC was not nearly the player that Dak PAC and the Great Plains Leadership Fund were because senators are generally able to raise more than US House members.  According to candidate disclosure reports, NoDak PAC gave $11,500 to legislative and statewide Democrat candidates. 

In the last two years, NoDak PAC received only one individual reportable contribution.  Robert MacDonald of Wayzata, MN donated $5,000 to the PAC.  Committees contributed $155,500.  Insurance and financial institutions, along with trial lawyers and unions, were the large funding sources of NoDak PAC.

As with Conrad and Dorgan’s Leadership PACs, the funds acquired by Rep. Pomeroy’s Leadership PAC were largely from out of state interests and from committees and PACs more interested with Rep. Pomeroy’s position within Congress, than in trying to influence the North Dakota Secretary of State race.

District Dem-NPL

The Democrat legislative candidates in districts 3, 5, 13, 17, 23, and 35 received a total of $13,529 from their respective District Dem-NPL organization in reportable contributions in 2006.  A look into the disclosure reports of those districts reveals that they received $8,909, or about two-thirds, from the Dem-NPL or Dak PAC.

Democrat-NPL

The entity that dispersed the most money to the Democrat candidates was the North Dakota Democrat-NPL Party.  According to disclosure reports, the Democrat Party made $347,661 in reportable contributions to legislative and statewide Democrat candidates, with $20,000 going to legislative candidates and the balance going to statewide candidates.  The biggest recipient of Democrat-NPL money was Tax Commissioner Candidate Brent Edison, who received just under $130,000.

Again, the reason why the Leadership PACs are included with the Democrat-NPL Party is simple, their sources of money.  According to the North Dakota Secretary of State’s web site, the Dem-NPL raised a total of $955,998 in reportable contributions during the 2005-2006 election cycle.  Of that total, $828,345 was raised from out of state sources or from Leadership or re-election PACs.  That is an astonishing eight-seven percent.  Here are some of the Dem-NPL’s biggest donors:  Vance Opperman of Key Investments in Minneapolis ($50,000), Baltimore Orioles owner, Peter Angelos ($40,000), The Connell Company owner, Grover Connell ($20,000), Floridian Bennett Lebrow of the Vector Group ($20,000), Texas investor Bernard Rapoport ($20,000), Malachi Mixon of Invacare Corp. in Ohio ($10,000), Mississippi trial lawyer Richard Scruggs ($10,000), BL Swartz of Viking Properties in New York ($10,000) Texas businessman Ben Barnes ($10,000), and federal government employee and resident of Virginia Rita Lewis ($10,000).

Those are just individual donations on top of the national Democrat organizations that contributed over $80,000 and the Leadership PACs and re-election PACs affiliated with Kent Conrad, Byron Dorgan, and Earl Pomeroy, which contributed over $200,000.

Those individuals and groups make up almost half of the reportable contributions the Dem-NPL received over the last two years.  Virtually none of that money originated anywhere close to North Dakota.  In contrast, the North Dakota Republican Party received about thirty four percent of its money out of state.

Friends of Kent Conrad

Kent Conrad’s re-election PAC, Friends of Kent Conrad, was also very active in the Dem-NPL over the last couple years.  Despite having to spend money on his own campaign, Sen. Conrad had $112,694 lying around to give to the Dem-NPL.  The money, of course, was raised outside of North Dakota.

Opensecrets.org, an organization that tracks federal campaign money, pegs Sen. Conrad’s in-state vs. out of state fundraising ratio at about 94 to 6.  In other words, Friends of Kent Conrad was able to raise $2,340,106 in individual contributions with about ninety-four percent ($2,195,779) raised out-of-state.  Washington DC, New York, Chicago, Las Angeles, and Dallas were the top metro areas for Sen. Conrad’s fundraising efforts.

Financial institutions, insurance companies, real estate companies, and trial lawyers were the biggest supporters of Kent Conrad.  They combined to contribute almost $2 million to his re-election treasure chest.  As mentioned before, Sen. Conrad’s rank on the Finance Committee has more to do with these economic sectors’ contributions than does anything else. 

Friends of Byron Dorgan

Friends of Byron Dorgan is Byron Dorgan’s PAC.  It contributed $7,500 to the Dem-NPL in the 2005-2006 election cycle.  That money, too, was raised out of state.  According to Opensecrets.org, Sen. Dorgan has raised $1,548,710 in individual contributions since 2001, with just under $1.4 million (92%) coming from out of state.

While Fargo-Morehead and Grand Forks were two of his top five metro areas for fundraising, the second through four spots combined only make up about one sixth of the amount raised in the DC metro area alone.

Lawyers, lobbyists, and communications interests were the sectors of the economy that contributed to Sen. Dorgan the most.  Lawyers and lobbyists, alone, contributed just fewer than six hundred thousand dollars.  They are, no doubt, more interested in Sen. Dorgan’s position as Chairman of the Democratic Policy Committee than they are about anything going on in or around North Dakota.

Earl Pomeroy for Congress

Naturally, Earl Pomeroy for Congress is Rep. Earl Pomeroy’s PAC.  In the last two years Earl Pomeroy has raised just over $1.5 million.  While he was up for re-election this past November he was still able to donate $57,500 to the Dem-NPL.  Where did he get his money?

During the election cycle, he received contributions totaling $166,605 from individuals, with $120,740 (72%) coming from out of state.  Like Sen. Conrad and Sen. Dorgan, Washington DC is where Rep. Pomeroy raised the most money.  Financial institutions, insurance companies, real estate companies, and unions contributed the most to the Congressman, with their donations topping $555,000. 

Totaling the Out of State Money

North Dakota’s Washington delegation, because of its seniority and committee assignments, has cultivated relationships with certain members of certain economic sectors.  They have used their Leadership and re-election PACs as the machinery to raise millions of dollars from those they have built those relationships with and who have nothing to do with North Dakota.  The amount of money each has raised in the last few years (Conrad and Dorgan six years and Pomeroy two years) totals over $11.9 million.  Using the reportable individual contributions, North Dakota’s delegation has raised over ninety percent (over $3.7 million) of their money from out of state.  On top of that, they raised millions of dollars from PACs that care little, if any, about North Dakota who have raised their money from out of state.

Following the Money Train

While these numbers by themselves are staggering, the picture becomes much clearer when following the money from the top down.  The Dem-NPL Chairman David Strauss, the Dem-NPL Executive Director, Sen. Kent Conrad, Sen. Byron Dorgan, and Rep. Earl Pomeroy all have substantial ties to some big players in DC.  Once they start making phone calls the wheels are put in motion.

Political action committees, businesses, and individuals start pouring money into the Democrat-NPL Party and the delegation’s PACs.  The delegation’s PACs (over 90% out of state) then send money directly to the Dem-NPL or directly to statewide and legislative candidates.  The Dem-NPL Party then takes their money (87% out of state) and sends it down the line to statewide and legislative candidates.  In some cases, the Dem-NPL sends their out of state money to the district organizations that then disperse the money to candidates.  This is the process that ends up giving Democrat statewide and legislative candidates around seventy one percent of their reportable contributions.

Timing of the Contributions

To understand the full scope of how out of state interests are buying elections in North Dakota, tracking where the money is coming from is only half of the story.  It is equally important to understand exactly when that money is being contributed. 

In the two and one half weeks before the election, the Dem-NPL reported receiving $198,262.71 in contributions.  This money was used for the massive media buys that flooded TV screens and radio waves; out of state interests had a heavy hand in those last-minute buys, contributing $184,160.75 (93%) of that total.  Individuals who contributed to the barrage of media buys were Baltimore Orioles owner Peter Angelos ($20,000), Ohioan Malachi Mixon of Invacare Inc. ($10,000), Mississippi trial lawyer Richard Scruggs ($10,000), Floridian Monte Friedman ($5,000), Californian Edith Wasserman ($5,000), and Minnesotans Paul Sonavia ($1,000) and Benjamin Fowke, ($750).  What interest in North Dakota politics they have remains to be seen.  They, no doubt, are just making sure that North Dakota’s Washington delegation is happy with them.

Kent Conrad, Byron Dorgan, and Earl Pomeroy also managed to give a combined $125,050 in the closing weeks of the campaign season.  Kent Conrad’s contribution of $85,050 was given to the Party the day before the election.

What this Means for Politics in North Dakota

North Dakota’s Washington delegation has made fundraising a top priority over the last few years - raising millions of dollars.  They understand that in order to run successful campaigns large amounts of money are needed even in North Dakota.  With the connections they, Strauss, and Fuglie have in Washington - they have a significant advantage over Republicans in the area of out of state fundraising.  This is evidenced by the fact that the total number of dollars the Democrats have received from out of state is so much greater than that of the Republican Party.

The Washington delegation is raising funds year around enabling them to amass large sums of money that can be funneled down to legislative races.  The reason they are able to funnel so much of their money down to the legislative district level is because of the inability of a North Dakota Republican Senate candidate to force Senators Conrad and Dorgan to spend money on their own campaigns.  Kent Conrad did spend millions of dollars on his re-election campaign this year, but still had plenty of money to hand over to the Dem-NPL or give directly to the Democrat candidates.

As Kent Conrad and Byron Dorgan keep winning elections easily, they are able to move up the seniority ladder in Washington.  This does not necessarily mean they become more powerful, but it does mean that they are able to solidify relationships with major donors, and it gives them time to find new ones.  As they raise more money, they scare off Republican candidates because of the large sums of campaign cash available to them.

This causes problems for the Republicans, up and down the ticket.  First of all, it means that statewide and legislative candidates are going to have to spend more time raising money for their races.  If thousands of dollars of out of state money are being funneled down to local races the Democrats are able to spend less time raising money and more time campaigning.  Republican legislative candidates will soon have to spend upwards of fifty or sixty thousand dollars on their campaigns, maybe even more.  If they spend too much time raising money right now, imagine how much time they will need to spend raising funds if they have to raise twice as much.

The second problem this causes centers on candidate recruitment.  Historically, the North Dakota legislature has truly been a citizen legislature.  This meant that common people were able to raise a lot of money, knock on a bunch of doors, talk about their ideas, and head to Bismarck.  The candidates and legislators have everyday jobs that are needed for them to raise their families.

If candidates are going to have to raise money a year a half before their election, good candidates might not be interested.  They would need more time off of work.  They would need to spend more time away from their families.  Campaigns in North Dakota are getting to that point right now.  There are a limited number of people who would be able to such things.  It appears as though North Dakota’s citizen legislature is evolving into a purely political institution.  That is a shame. 

What can be Done?

North Dakota Republicans have been talking about the influx of East Coast money for quite some time now.  They are often met with the rebuttal that if Republicans made up our Washington delegation, the NDGOP would be reaping these benefits.  That point is well-taken and is probably true.

So what can be done to make our political processes and campaigns more open and more focused on North Dakota?  Some have suggested that candidates should have to disclose all of their contributions or lower the reportable number to around fifty dollars.  Some have also suggested that all contributions over fifty dollars should have to be reported within twenty four hours.  With improving technology, this could be done online.

The state legislature could pass laws allowing candidates to only receive money from North Dakotans, but PACs and other interest groups interested enough in North Dakota would set up shop in the state and use their out of state money, just the same.

Perhaps PACs and political parties should only be able to give money to North Dakota candidates that was actually raised in North Dakota.  National PACs would be required to segregate their funds and establish local branches.  They would have to set up a bank account in a North Dakota bank with funds raised only from North Dakotans.  That is the only money that could be used to give to North Dakota candidates.  This, of course, would not change any of the federal laws, but would force any North Dakota federal office holder to segregate their funds in their PACs if they want to use their money in North Dakota statewide and legislative races.

Public Policy Protection Act

Now is the time for campaign finance reform in North Dakota.  Out of state influence in North Dakota politics is growing exponentially and needs to be nipped in the bud.  North Dakotans should be able to give as much money as they want to any legislative or statewide candidate, any PAC in North Dakota, or any political party in North Dakota.  That money (all contributions and receipts), however, would have to be reported to the Secretary of State, online, within twenty four hours.  All contributions over fifty dollars would have to be made public.

PACs would only be allowed to spend money raised in North Dakota on legislative and statewide candidates and North Dakota political parties.  No out of state money would be allowed.

Is it perfect?  Nope.  One loophole might be that the Republican and Democrat National Committees would still be able to contribute to the Dem-NPL or the NDGOP, but this plan will make any attempts to influence North Dakota politics by outsiders much more difficult.  When out of state interests donate money to the DNC, they do not get to choose how that money is spent.  Someone hoping to influence North Dakota politics by donating money to the DNC may be shocked when they find out that their money was actually spent in New York or Oregon.  Because North Dakota is a relatively small and unpopulated state, many of the out of state interests would simply leave.

This plan should become law to make sure that North Dakotans influence policy in North Dakota.  The Dem-NPL held a huge advantage over the NDGOP in out of state fundraising.  The biggest reason for that advantage rested in the makeup of North Dakota’s Washington delegation.  That is a shame; however, Republicans would probably do the same.  It is time that North Dakota said “no” to out of state interests.  Enacting meaningful campaign finance reform in North Dakota is not a partisan issue… it’s a North Dakota issue. 

[1] Opensecrets.org, “Center for Responsive Politics Predicts ’06 Election will Cost $2.6 Billion,” October 25, 2006, (updated on Nov. 6, 2006); available from http://www.opensecrets.org/pressreleases/2006/PreElection.10.25.asp; Internet.

[2] Opensecrets.org, “What is a PAC?” available from http://www.opensecrets.org/pacs/pacfaq.asp; Internet.