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PACs Flocked to Conservative Blue Dog Democrats, Then Fled After Crucial Votes

Coalition Lost Support From Health Care, Energy and Financial Service Sectors

by Josh Israel and Aaron Mehta

In mid-2009, the 52 conservative House Democrats who made up the Blue Dog Coalition were at the height of their power. Money was rolling in - especially from the health care, energy, and financial services industries looking to curry favor with a key voting bloc in expectation of legislation proposed by the Obama White House.

Through the first six months of that year, the Blue Dog political action committee (Blue Dog PAC) was on pace to shatter its fundraising record, and political observers were anointing the Blue Dogs as congressional kingmakers.

But a new Center for Public Integrity analysis shows that many of these budding relationships were short-lived. The Blue Dog PAC raised more than $2.5 million over 2009 and 2010, almost entirely from about 300 other special-interest PACs. But ultimately 58 of these special interest PACs also decided to donate to individual opponents of Blue Dog Coalition members, mostly after May 2010 - following a series of votes on reform legislation affecting the three key sectors which had backed the Blue Dogs so enthusiastically.

Ten of those 58 committees, which had given not just to the Blue Dog PAC, but to individual Blue Dogs, ultimately stopped giving to the PAC entirely, and supported opponents of Blue Dogs. Another PAC donated to both an incumbent Blue Dog and his Republican challenger at about the same time. In these contests, special interests gave about 77 percent of their contributions over the first 17 months of the cycle to the incumbent Blue Dog and about 97 percent of their contributions from June 2010 onward to the GOP challenger. And 16 PACs that had made the maximum annual legal contribution of $5,000 to the Blue Dog PAC in 2007, 2008, and 2009 declined to donate anything to the Blue Dog PAC this year. Whether due to Blue Dog support for legislation these interests opposed - or perhaps due to the turning political tide - the Blue Dogs saw a significant drop in support over the course of 2010.

Less than two years after the Center for Public Integrity launched a series of stories looking at the massive fundraising and clout of the Blue Dog PAC, the coalition is about to find itself stuck in the minority, apparently with just 26 remaining members.

After this month's Republican rout, the GOP will control at least 242 House seats, a commanding majority. And though the new majority may seek the support of centrist Democrats on some issues, the few remaining Blue Dogs seem likely to find themselves with significantly diminished clout - and PAC investment.

No Longer the Linchpin

In the 111th Congress, which encompasses 2009 and 2010, the Democrats have had what looked like a massive House majority, with almost 40 extra votes to spare. Even so, to pass any legislation, they needed at least some votes from those conservative Blue Dogs, 52 votes strong. The math gave the Blue Dog coalition significant leverage in shaping the final versions of bills and, when the Blue Dogs stood together, a virtual veto on any measure. That power garnered them significant interest - and campaign cash - from a variety of industries whose fortunes would be impacted by any congressional action.

"The business community realizes that [the Blue Dogs] are the linchpin," former Blue Dog Rep. Mike Parker of Mississippi told the Center in 2009. And, he predicted, they would "become much more so as time goes on."

But that didn't happen.

Whether because many business groups recognized the changing winds and decided to hedge their bets, or perhaps because interest groups got fed up with the Blue Dogs' ultimate support for Speaker Nancy Pelosi and the Democratic agenda, many incumbent Blue Dogs found themselves in the proverbial doghouse.

As House Democrats, with the requisite Blue Dog support, passed controversial bills to reform health care, expand regulation of the financial sector, and institute a cap-and-trade system to combat climate change, many businesses and trade groups discovered that their campaign investments had not always paid off. Of the 54 Blue Dogs serving at the end of the 111th Congress, 26 voted for the climate change bill in June 2009, 30 voted for the final version of health care reform in March 2010, and 42 ultimately backed the financial services bill in late June this year. Following these votes, some PACs cut their losses or even sent checks to Republican opponents challenging Blue Dogs.

Biting the Hand that Feeds You

Specific examples of industries turning their backs on the Blue Dogs are plentiful.

The American Financial Services Association represents banks that offer home mortgages, financing companies that provide car loans, and other lenders. In March 2009, the association's political committee gave the Blue Dog PAC a $5,000 contribution - the annual legal maximum. Nine months later, the House passed its initial version of the Dodd-Frank Wall Street Reform and Consumer Protection Act, significantly expanding government regulation of the financial services industry. The association opposed the measure. In late June 2010, the House passed the conference report, which President Barack Obama signed into law. The majority of Blue Dogs voted for the bill.

Several weeks later, the financial services association PAC sent a $2,000 contribution to Republican Jackie Walorski, the GOP nominee against Indiana Blue Dog Rep. Joe Donnelly, a backer of the bill. In the ten days that followed, nine other Republican challengers seeking to unseat Blue Dogs who voted for the bill (and three who had opposed the bill) received similar $2,000 checks. Ten of those thirteen Blue Dogs ultimately lost re-election. The association's PAC contributions to either the Blue Dog PAC or the individual Blue Dog members for the year 2010: zero.

Karen Klugh, the American Financial Services Association's director of communications, told the Center that the PAC aimed to give 80 percent of its funds for the 2010 cycle to Republicans, up from 50 percent in 2008. The change "reflects our deep concerns with the work of the 111th Congress," she explained.

The PAC for Capital One Financial Corp. also donated to the Blue Dog PAC prior to the enactment of the Wall Street reform bill. Between January 2009 and June of 2010, the company donated to seven Blue Dog incumbents, while kicking in $5,000 to the Blue Dog PAC. After the passage of the Dodd-Frank bill, however, Capital One donated nothing to the Blue Dogs, and made a pair of $2,000 donations to challengers running against Blue Dogs who voted aye.

Tatiana Stead, a spokeswoman for Capital One, told the Center that the bank's PAC giving "does not hinge on a single vote or issue." She said that while the bank "supported the overarching goals of financial reform," it has "some concerns about elements of the law that disconnect safety and soundness from consumer protection" and about unintended consequences.

Health Company PACs Also Retreat

A similar pattern was evident with health insurance sector PACs and the passage of the Patient Protection and Affordable Care Act, President Obama's health reform bill. WELLPAC is the political action committee for WellPoint Inc., the health insurance company for more than 33 million Americans and a vocal critic of the health care reform law. In January 2009, and again in February of 2010, WELLPAC gave $5,000 donations to the Blue Dog PAC. The company also gave to numerous individual Blue Dogs, including $1,000 to the re-election of Blue Dog Betsy Markey of Colorado and $2,000 to Donnelly of Indiana.

In March 2010, the House passed the final version of the health care bill, with the support of 30 Blue Dogs, including Donnelly, Markey, and Baron Hill of Indiana. WellPoint's response was swift. The PAC gave nothing to Donnelly, Markey, or Hill after the vote. Two days after President Obama signed the bill into law, WELLPAC gave a $1,000 contribution to Walorski, Donnelly's challenger. Another $5,000 contribution to her campaign coffers followed in August.

In the following months, WELLPAC also gave $5,000 to Markey's challenger, Cory Gardner, and $5,000 to Hill's opponent, Todd Young. Though WELLPAC would make donations to eight other Blue Dogs after the health care vote, all but one of those contributions would be to Democrats who voted against the bill. WellPoint did not respond to a Center request for comment.

The National Association of Health Underwriters PAC, the political arm of the trade association of benefit specialists, gave $10,000 to the Blue Dogs PAC prior to the March 2010 enactment of the health care bill. Prior to the final vote, the PAC had also donated a total of $51,000 to 15 individual Blue Dog incumbents. After the vote, it donated to only six Blue Dogs - all "no" votes on the bill - while supplying $5,500 in combined donations to four Republican Blue Dog challengers. The underwriters association had opposed the reform package.

Kathryn Gaglione, spokeswoman for the National Association of Health Underwriters, said the association backs "members and candidates who are dedicated to the right kind of health system reform."

Political action committees for Koch Industries and the National Mining Association also first supported the Blue Dog PAC and later switched to back Republican challengers to incumbent Blue Dog Coalition members.

Carol Raulston, senior vice president for communications at the National Mining Association, said that her organization's PACs backed the Blue Dog PAC because most of its members "had positions on legislation that were similar to ours," such as responsible spending and regulation that supports economic growth. But, she said, the association saw no inconsistency in backing challengers to Blue Dogs when they "were more in line with our views on legislation."

Koch Industries did not respond to a Center request for comment.

In all, those 58 PACs gave almost as much to candidates opposing the Blue Dogs (about $414,000) as they invested in the Blue Dog PAC (about $486,000) over periods so far reported in the 2009-2010 cycle. And, in part thanks to that PAC support, it appears 22 Blue Dog incumbents lost their re-election races, making those dogs truly blue.

A spokeswoman for the Blue Dog PAC and several Blue Dog Coalition members who lost re-election did not respond to requests for comment for this story.

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