Morning Digest: How a brazen campaign finance scandal led to this Florida Republican’s downfall

The Daily Kos Elections Morning Digest is compiled by David Nir, Jeff Singer, Stephen Wolf, Carolyn Fiddler, and Matt Booker, with additional contributions from David Jarman, Steve Singiser, Daniel Donner, James Lambert, David Beard, and Arjun Jaikumar.

Alaska, Florida, and Wyoming held their primaries on Tuesday. You can find current results at the links for each state; we’ll have a comprehensive rundown in our next Digest.

Leading Off

FL-15: Republican primary voters in Florida’s 15th Congressional District on Tuesday denied renomination to freshman Rep. Ross Spano, who has been under investigation by the Justice Department since last year due to a campaign finance scandal, and instead gave the GOP nod to Lakeland City Commissioner Scott Franklin.

With all votes apparently counted, Franklin defeated Spano 51-49. Franklin’s next opponent will  be former local TV news anchor Alan Cohn, who beat state Rep. Adam Hattersley 41-33 for the Democratic nomination.

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This central Florida seat, which includes the mid-sized city of Lakeland and the exurbs of Tampa and Orlando, moved from 52-47 Romney to 53-43 Trump, and Franklin is favored to keep it in Republican hands. Still, the general election could be worth watching: In 2018, before news of Spano’s campaign finance scandal broke, he won by a modest 53-47 margin.

Spano’s defeat ends a short, but unfortunately for him quite eventful, congressional career. Spano, who was elected to the state House in 2012, had been waging a campaign for state attorney general in 2018 until Republican Rep. Dennis Ross surprised everyone by announcing his retirement. Spano switched over to the contest to succeed Ross, which looked like an easier lift, but he nonetheless faced serious intra-party opposition from former state Rep. Neil Combee.

Spano beat Combee 44-34 and went on to prevail in the general election, but he found himself in trouble before he was even sworn into Congress. That December, Spano admitted he might have broken federal election law by accepting personal loans worth $180,000 from two friends and then turning around and loaning his own campaign $170,000. That's a serious problem, because anyone who loans money to a congressional candidate with the intent of helping their campaign still has to adhere to the same laws that limit direct contributions, which in 2018 capped donations at just $2,700 per person.

The House Ethics Committee initially took up the matter but announced in late 2019 that the Justice Department was investigating Spano. The congressman variously argued that he'd misunderstood the law governing campaign loans but also insisted his campaign had disclosed the loan "before it became public knowledge" in the financial disclosure forms all federal candidates are obligated to file.

That latter claim, however, was flat-out false: As the Tampa Bay Times' Steve Contorno explained, Spano had failed to file those disclosures by the July 2018 deadline, only submitting them just before Election Day—after the paper had asked about them. Only once those reports were public did the paper learn that the money for Spano's questionable loans came from his friends.

Despite his scandal, most of the party establishment, including Sen. Marco Rubio and most of the neighboring Republican congressmen, stood by Spano. However, he had trouble bringing in more money, and Franklin used his personal wealth to decisively outspend the incumbent. The anti-tax Club for Growth dumped $575,000 into advertising attacking Franklin, but it wasn’t enough to save Spano from defeat on Tuesday.

P.S. Spano is the fifth House Republican to lose renomination this cycle, compared to three Democrats. The good news for the rest of the GOP caucus, though, is that none of them can lose their primaries … because the remaining states don’t have any Republican members. (Louisiana does host its all-party primaries in November, but none of the state’s House members are in any danger.)

Senate

AL-Sen: In what appears to be the first major outside spending here on the Democratic side, Duty and Honor has deployed $500,000 on an ad buy praising Sen. Doug Jones. The commercial extols the incumbent for working across party lines to protect Alabamians during the pandemic and "fighting to expand Medicaid to cover Alabama families who need it." The conservative organization One Nation, meanwhile, is running a spot hitting Jones for supporting abortion rights.

GA-Sen-A: The Democratic group Senate Majority PAC is running an ad going after a Georgia Republican senator's stock transactions … just not the senator you might expect. The commercial begins, "Jan. 24, the U.S. Senate gets a private briefing on the coronavirus. Georgia Sen. David Perdue gets busy." The narrator continues, "That same day, he buys stock in a company that sells masks and gloves. Then sells casino stocks and winds up buying and dumping up to $14.1 million dollars in stock."

Perdue, like homestate colleague Kelly Loeffler, has argued that these trades were made by advisers who acted independently. Perdue has also said that he was not part of that Jan. 24 briefing.

Meanwhile, SMP's affiliated nonprofit, Duty and Honor, is airing a spot that uses Perdue's own words to attack his handling of the pandemic. "Very, very few people have been exposed to it," the audience hears Perdue say, "The risk of this virus still remains low." The narrator continues, "No wonder Perdue voted against funding for more masks, gloves, and ventilators. And voted to cut funding at the CDC to combat pandemics."

GA-Sen-B: Georgia United Victory, which supports Republican Sen. Kelly Loeffler, is airing another commercial attacking Republican Rep. Doug Collins, and the Atlanta Journal-Constitution reports that its total buy now stands at $6 million.

As pigs fill the screen, a truly bored-sounding narrator begins, "Another talking pig commercial? Good grief. We all know pigs are wasteful." She goes on to ask, "Is that the best comparison to Doug Collins? Oh sure. Collins loves pork for things like wine tasting and the opera." She goes on to say the congressman is too close to lobbyists and concludes, "He's laid quite a few eggs. Ever seen a pig lay an egg? Didn't think so." We really don't understand why this spot decided to go into the details of pig reproduction for no apparent reason, but ok.

IA-Sen, NC-Sen: Politico reports that Everytown for Gun Safety is launching an ad campaign this week against two Republican senators: The group will spend $2.2 million against Iowa's Joni Ernst (here and here), and $3.2 million opposing North Carolina's Thom Tillis (here and here).

Both ads argue the incumbents are too close to special interests, including the "gun lobby" and the insurance industry. The Iowa commercials also reference Ernst's infamous 2014 "make 'em squeal" spot by arguing, "She said she'd go to Washington and make them squeal. Joni Ernst broke that promise to Iowa and made the special interests her top priority." The narrator concludes that Ernst has actually left Iowans to squeal.

MA-Sen: Priorities for Progress, a group that the Boston Globe says is affiliated with the pro-charter school and anti-teachers union organization Democrats for Education Reform, has released a SurveyUSA poll that shows Massachusetts Sen. Ed Markey narrowly leading Rep. Joe Kennedy 44-42 in the Democratic primary. Neither group appears to have taken sides in the Sept. 1 contest.

This is the third poll we've seen in the last month, and the others have also shown Markey in the lead. However, while the Republican firm JMC Analytics gave the incumbent a similar 44-41 edge in an early August crowdfunded survey, a YouGov poll for UMass Amherst and WCVB had Markey ahead 51-36 last week.

MI-Sen: Republican John James has publicized a poll from the Tarrance Group that shows him trailing Democratic Sen. Gary Peters "just" 49-44; the survey, like most Republican polls this cycle, did not include presidential numbers.

There isn't any ambiguity about why James' team is releasing this survey, though. The memo noted that, while the Democratic group Duty and Honor has been airing commercials for Peters, there has been "no corresponding conservative ally on the air against Gary Peters," and it goes on to claim the Republican can win "[w]ith the proper resources." Indeed, as Politico recently reported, major Republican outside groups have largely bypassed this contest, and neither the NRSC or Senate Leadership Fund currently has any money reserved for the final three months of the campaign.

James is getting some air support soon, though. Roll Call reports that One Nation, a nonprofit affiliated with SLF, will launch a $4.5 million TV and radio ad campaign against Peters on Wednesday.

NC-Sen: While most Republican downballot candidates have largely avoided tying their Democratic opponents to Joe Biden, Sen. Thom Tillis tries linking Democrat Cal Cunningham to Biden in a new spot.

Polls: The progressive group MoveOn has unveiled a trio of new Senate polls from Public Policy Polling:

  • GA-Sen-A: Jon Ossoff (D): 44, David Perdue (R-inc): 44 (June: 45-44 Ossoff)
  • IA-Sen: Theresa Greenfield (D): 48, Joni Ernst (R-inc): 45 (June: 45-43 Greenfield)
  • ME-Sen: Sara Gideon (D): 49, Susan Collins (R-inc): 44 (July: 47-42 Gideon)

The releases did not include presidential numbers.

House

OH-01: Democrat Kate Schroder is running a TV commercial about the truly strange scandal that engulfed Republican Rep. Steve Chabot's campaign last year. The narrator accuses the incumbent of lying about Schroder to draw attention away from his own problems, declaring, "Chabot is facing a grand jury investigation for $123,000 in missing campaign money."

The ad continues, "After getting caught, Chabot blamed others. And his campaign manager went missing." The narrator concludes, "We may never learn the truth about Shady Chabot's missing money, but we do know that 24 years is enough. (Chabot was elected to represent the Cincinnati area in Congress in 1994, lost a previous version of this seat in 2008, and won it back two years later.)

As we've written before, Chabot's campaign was thrown into turmoil last summer when the FEC sent a letter asking why the congressman's first-quarter fundraising report was belatedly amended to show $124,000 in receipts that hadn't previously been accounted for. From there, a bizarre series of events unfolded.

First, Chabot's longtime consultant, Jamie Schwartz, allegedly disappeared after he shuttered his firm, called the Fountain Square Group. Then Schwartz's father, Jim Schwartz, told reporters that despite appearing as Chabot's treasurer on his FEC filings for many years, he had in fact never served in that capacity. Chabot's team was certainly bewildered, because it issued a statement saying, "As far as the campaign was aware, James Schwartz, Sr. has been the treasurer since 2011." Evidently there's a whole lot the campaign wasn't aware of.

The elder Schwartz also claimed of his son, "I couldn't tell you where he's at" because "he's doing a lot of running around right now." Well, apparently, he'd run right into the arms of the feds. In December, local news station Fox19 reported that Jamie Schwartz had turned himself in to the U.S. Attorney's office, which, Fox19 said, has been investigating the matter "for a while."

Adding to the weirdness, it turned out that Chabot had paid Schwartz's now-defunct consultancy $57,000 in July and August of 2019 for "unknown" purposes. Yes, that's literally the word Chabot's third-quarter FEC report used to describe payments to the Fountain Square Group no fewer than five times. (Remember how we were saying the campaign seems to miss quite a bit?)

We still don't know what those payments were for, or what the deal was with the original $124,000 in mystery money that triggered this whole saga. Chabot himself has refused to offer any details, insisting only that he's been the victim of an unspecified "financial crime."

There haven't been any public developments since December, though. The Cincinnati Inquirer's Jason Williams contacted Schwartz's attorney last week to ask if Schwartz had been informed of any updates, and the reporter was only told, "No, not yet." Unless something big changes in the next few months, though, expect Democrats to keep pounding Chabot over this story.

OK-05: State Sen. Stephanie Bice is going up with a negative commercial against businesswoman Terry Neese just ahead of next week's Republican primary runoff. The winner will face Democratic Rep. Kendra Horn in what will be a competitive contest for this Oklahoma City seat.

Bice accuses Neese of running "the same fake news smears she always sinks to." Bice continues by alluding to Neese's unsuccessful 1990 and 1994 campaigns for lieutenant governor by declaring that in her 30 years of running for office Neese has been "mastering the art of dirty politics but never beating a single Democrat." (Neese badly lost the general election in 1990 but fell short in the primary runoff four years later, so she's only had one opportunity up until now to beat a Democrat.) Bice then sums up Neese by saying, "Appointed by Clinton. Terrible on gun rights. Neese won't take on the Squad, because she can't beat Kendra Horn."

Neese outpaced Bice 36-25 in the first round of voting back in late June, and Neese' allies have a big financial advantage going into the runoff. While Bice did outspend Neese $290,000 to $210,000 from July 1 to Aug. 5 (the time the FEC designates as the pre-runoff period), the Club for Growth has deployed $535,000 on anti-Bice ads this month. So far, no major outside groups have spent to aid Bice.

SC-01: The NRCC has started airing its first independent expenditure ad of the November general election, a spot that seeks to attack freshman Democratic Rep. Joe Cunningham on the issue that powered his upset victory in 2018: offshore drilling. The ad tries to question Cunningham's commitment to opposing such drilling in a move straight from Karl Rove’s dusty playbook, but given how closely his image is tied to the cause—he defeated his Republican opponent two years ago, Katie Arrington, in large part because of her support for offshore oil extraction—it's a tough sell.

And while Nancy Mace, his Republican challenger this year, might welcome the committee's involvement, the move doesn't come from a position of strength. In fact, the NRCC's own ad seems to acknowledge this at the outset, with a narrator saying, "Your TV is full of Joe Cunningham" as three images from prior Cunningham spots pop up on the screen. It's not wrong: The congressman has been advertising on television since the first week in July, and he recently released his fifth ad.

Cunningham's been able to blanket the airwaves because of the huge financial advantage he's locked in. Mace raised a prodigious $733,000 in the second quarter of the year, but Cunningham managed to beat even that take with an $845,000 haul of his own. It's the campaigns' respective bank accounts that differ dramatically, though: Cunningham had $3.1 million in cash-on-hand as of June 30 while Mace, after a costly primary, had just $743,000.

As a result, she hasn't gone on the air yet herself, which explains why the NRCC has moved in early to fill in the gap. Interestingly, the committee didn't bother to mention that this is its first independent expenditure foray of the 2020 elections in its own press release, whereas the DCCC loudly trumpeted the opening of its own independent expenditure campaign in New York's 24th Congressional District a month ago.

TX-21: Both Democrat Wendy Davis and the far-right Club for Growth are running their first commercials here.

Davis talks about her life story, telling the audience, "[M]y parents divorced when I was 13. I got a job at 14 to help mom. And at 19, I became a mom." Davis continues by describing her experience living in a trailer park and working two jobs before community college led her to Texas Christian University and Harvard Law. She then says, "As a state senator, I put Texas over party because everyone deserves a fair shot."

The Club, which backs Republican Rep. Chip Roy, meanwhile tells the Texas Tribune's Patrick Svitek that it is spending $482,000 on its first ad against Davis. The group has $2.5 million reserved here to aid Roy, who ended June badly trailing the Democrat in cash-on-hand, and it says it will throw down more.

The Club's spot declares that Davis is a career politician who got "busted for using campaign funds for personal expenses," including an apartment in Austin. However, while the narrator makes it sound like Davis was caught breaking the rules, Svitek writes, "Members are allowed to use donors' dollars to pay for such accommodations—and it is not uncommon."

This topic also came up during Davis' 2014 campaign for governor. The campaign said at the time that legislative staffers also stayed at the apartment, and that Davis followed all the state's disclosure laws.

Polls:

  • AZ-06: GQR (D) for Hiral Tipirneni: Hiral Tipirneni (D): 48, David Schweikert (R-inc): 45 (50-48 Biden)
  • MT-AL: WPA Intelligence (R) for Club for Growth (pro-Rosendale): Matt Rosendale (R): 51, Kathleen Williams (D): 45
  • NJ-02: RMG Research for U.S. Term Limits: Jeff Van Drew (R-inc): 42, Amy Kennedy (D): 39
  • NY-01: Global Strategy Group (D) for Nancy Goroff: Lee Zeldin (R-inc): 47, Nancy Goroff (D): 42 (46-42 Trump)
  • WA-03: RMG Research for U.S. Term Limits: Jaime Herrera Beutler (R-inc): 44, Carolyn Long (D): 40

The only other numbers we've seen from Arizona's 6th District was an early August poll from the DCCC that had Republican Rep. David Schweikert up 46-44 but found Joe Biden ahead 48-44 in this Scottsdale and North Phoenix constituency; Donald Trump carried this seat 52-42 four years ago, but like many other well-educated suburban districts, it's been moving to the left in recent years.

The Club for Growth's new Montana survey comes a few weeks after two Democratic pollsters found a closer race: In mid-July, Public Policy Polling's survey for election enthusiasts on Twitter showed a 44-44 tie, while a Civiqs poll for Daily Kos had Republican Matt Rosendale ahead 49-47 a few days later. PPP and Civiqs found Donald Trump ahead 51-42 and 49-45, respectively, while the Club once again did not include presidential numbers.

U.S. Term Limits has been releasing House polls at a rapid pace over the last few weeks, and once again, they argue that Democrats would easily win if they would just highlight the Republican incumbents' opposition to term limits; as far as we know, no Democratic candidates have tested this theory out yet. These surveys also did not include presidential numbers.

The only other poll we've seen out of New York's 1st District on eastern Long Island was a July PPP internal for Democrat Nancy Goroff's allies at 314 Action Fund. That survey gave Republican Rep. Lee Zeldin a 47-40 lead, which is slightly larger than what her poll finds now, though it showed the presidential race tied 47-47. This seat has long been swing territory, though it backed Trump by a 55-42 margin in 2016.

Mayoral

Honolulu, HI Mayor: Former Rep. Colleen Hanabusa, who finished a close third in the Aug. 8 nonpartisan primary, announced Monday that she was endorsing independent Rick Blangiardi over fellow Democrat Keith Amemiya. Blangiardi took 26% in the first round of voting, while Amemiya beat Hanabusa 20-18 for second.

ELECTION CHANGES

Minnesota: Republicans have dropped their challenge to an agreement between Democratic Secretary of State Steve Simon and voting rights advocates under which Minnesota will waive its requirement that mail voters have their ballots witnessed and will also require that officials count any ballots postmarked by Election Day and received within a week.

In dismissing their own claims, Republicans said they would "waive the right to challenge [the agreement] in any other judicial forum." That likely moots a separate federal case in which Republicans were challenging a similar agreement that a judge had refused to sign off on.

North Dakota: An organization representing county election officials in North Dakota says that local administrators are moving forward with plans to conduct the November general election in-person, rather than once again moving to an all-mail format, as they did for the state's June primary.

South Carolina: Republican Harvey Peeler, the president of South Carolina's state Senate, has called his chamber in for a special session so that lawmakers can consider measures to expand mail voting. Legislators passed a bill waiving the state's excuse requirement to vote absentee ahead of South Carolina's June primary, and Peeler says, "I am hopeful we can do it again."

However, Republican House Speaker Jay Lucas is refusing to convene a special session for his members, who are not due to return to the capitol until Sept. 15. That would give the state significantly less time to prepare for a likely influx of absentee ballot requests should the legislature once again relax the excuse requirement.

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