Virginia Mercury: July 24, 2019

As Democrats debate campaign finance reform, an intimate mountain retreat with corporate lobbyists continues

By Ned Oliver, Virginia Mercury

BATH — Democratic state senators and delegates spent the end of last month holed up with dozens of lobbyists at the Omni Homestead, a remote luxury resort in Bath County.

They soaked up poolside hospitality sponsored by the bankers’ association, took in a golf clinic courtesy of the state’s credit unions and paired off with lobbyists representing telecoms, utilities and other big business interests for activities ranging from ziplining to shotgun shooting.

“Gross but mandatory – that’s pretty much how I feel about this event,” said Del. Lee Carter, D-Manassas, wearing swim trunks and a “Fight for 15” shirt as he passed through the hotel’s column-lined lobby on his way to the pool. He said he felt compelled to attend because, in addition to all the schmoozing, the event, a fundraiser known as the Joint Democratic Caucus Retreat, includes important caucus discussions. “I kind of have to be here even if I’m uncomfortable with some of the company.”

In a pivotal election year that’s likely to see an unprecedented infusion of cash into political races across the state, Democrats are wrestling with exactly what role PAC and corporate contributions should play in their campaigns. Some members of the party would like to see these contributions reined in, while others, including party leaders, vigorously defend them.

The debate played out in real time over the course of the two-night event, in which lobbyists and the companies they represent trade contributions as high as $20,000 for face-time with senators and delegates away from the bustle of the state’s short legislative sessions.

Some members eagerly mixed, mingled and drank. Others said they attended reluctantly but voiced hope that a Democratic majority could pass campaign finance reform measures that would render the event outmoded. And a handful declined to participate at all, including Del. Danica Roem, D-Prince William, who cited her pledge to not accept corporate campaign donations.

The event’s biggest donors included Comcast, Cox Communications, Dominion Energy and the Virginia Beer Wholesalers Association. Party leaders did not answer questions about how much the retreat brought in, instead touting small-dollar fundraising events they’ve held around the state.

“The annual Joint Democratic Caucus retreat is just one example of the many fundraising tools the Democratic caucuses use to raise money to support our candidates in critical election cycles,” the House and Senate caucuses said in a joint statement.

A Generational Shift and the No-Dominion Pledge

Remote, retreat-style fundraisers are not unique to Virginia or Democrats. Congressional caucuses hold nearly identical events, as do Virginia Republicans, who met a few weeks earlier to kayak, golf, drink and dine with lobbyists.

But unlike campaign finance laws in place at the federal level and in nearly every other state, Virginia code sets no caps on how much money elected officials can accept from donors. And unlike GOP members of the General Assembly, who generally welcome financial support from big businesses and industries, state Democrats are increasingly conflicted over how much money the party should accept — and from whom.

For decades, state Democrats have run on business-friendly but socially liberal platforms, an approach still embraced by party leaders like former Gov. Terry McAuliffe and sitting Gov. Ralph Northam, said longtime Virginia political expert Bob Holsworth.

“Some of the new legislators are saying, ‘Well, we really don’t want to be that,’” Holsworth said. “We want to be more progressive on business and employment and environmental issues. Dominion Energy has been kind of an easy target on that, but at the heart of it is something even larger. A fraying of what had been long-held consensus in the party.”

The influence of Dominion, the state’s largest utility, emerged as a flashpoint two years ago, when 13 Democratic House of Delegates candidates who had sworn off the company’s donations were elected. Of those, 11 were new delegates, many of whom had flipped Republican-held districts to bring the party within two seats of the majority.

Since then, 17 more sitting Democrats in the House have said they will also stop accepting campaign donations from state-regulated utilities, according to Clean Virginia, a political action committee funded by Charlottesville investor Michael Bills in an effort to counter Dominion’s influence in state politics. In the Senate, four of 19 sitting Democrats have made the same promise, as have Lt. Gov. Justin Fairfax and Attorney General Mark Herring.

The stance has gained traction in part because of Dominion’s involvement in a controversial pipeline project and in part because of a now heavily criticized rate freeze bill that prevented state regulators from stopping the utility from overcharging customers.

“I don’t think there will be a new member elected in the House or a new member elected in the Senate who will take money from Dominion Energy,” said Del. Patrick Hope, D-Arlington, who announced this year he would join his peers in refusing Dominion’s money. “In fact, I believe that Ralph Northam will be the last governor — probably the last statewide official, who accepts money from Dominion Energy.”

Echoing a sentiment shared by many lawmakers, Hope said he doesn’t have anything against the company and often supports its legislation. But he said the appearance of a conflict of interest troubled his constituents.

“Even if I believe it’s a good bill, I got tired of going home and explaining to my constituents that I voted for this bill not because they wrote me a check but because it’s a good bill on its merits or on its policy,” he said.

‘It’s Obviously a Loophole in Virginia Law’

Dominion is not the only source of big money – or concern – within the General Assembly. Some delegates have taken steps to limit or eliminate corporate contributions to their campaigns altogether. Others have raised concerns about unlimited spending by single-issue political action committees.

Out-of-state groups pledged more than $1.6 million in donations to help the Democratic Party flip the General Assembly. And during the Democratic primaries earlier this month, a PAC funded by liberal financier George Soros poured nearly $1 million into local prosecutors races in Fairfax and Arlington. The unprecedented donation drew concern from some party members, even if they supported the criminal justice reform platform of the candidates on the receiving end of the money, both of whom succeeded in toppling long-time incumbents.

The donation led a group of four Democratic lawmakers in Northern Virginia to call for capping donations from PACs at between $5,000 and $10,000, depending on the office.

“It’s obviously a loophole in Virginia law that we continue to allow these supersized donations,” said Sen. Chap Petersen, D-Fairfax City, who has long called for campaign finance reform and has introduced legislation to ban candidates from accepting money from regulated utilities like Dominion.

Other Democrats defended the PAC donations, including Del. Marcus Simon, D-Fairfax, who said the election of the new prosecutors meant two of the state’s largest localities will be implementing reforms to cash bail and minimum sentences that would never pass out of the Republican-controlled General Assembly.

“Democrats were really parroting Republican talking points and invoking this almost conspiracy-minded fearmongering about Soros’ money,” Simon said. “That’s a dog whistle that appeals to folks who believe in conspiracy theories.”

The Multi-Millionaire Versus the Monopoly

And then there’s the anti-big-money big money.

Bills, a multi-millionaire hedge fund manager from Charlottesville, raised eyebrows last year when Clean Virginia, the political action committee he founded with the goal of lessening the regulated utilities’ grip on the General Assembly, emailed every member of the legislature offering them donations of up to $20,000 if they pledged to stop accepting contributions from Dominion Energy, Appalachian Power and their executives.

The blowback was immediate, with critics and allies alike noting that the agreement looked an awful lot like a quid pro quo.

Clean Virginia defended the pledge, arguing that it was only trying to influence the way candidates campaigned, not the decisions they made once they were in office. But the group also quietly stopped asking candidates to sign the agreement, instead adopting the approach traditional advocacy groups take – making donations based on candidates’ responses to questionnaires and past actions. The impact is more or less the same: If they want it, candidates who don’t accept utility money can count on a donation from Clean Virginia.

Bills has had no trouble giving away bits and pieces of his fortune: He’s the biggest single donor so far of the 2018-2019 election cycle, giving $1.3 million to Democratic candidates and PACs, according to the Virginia Public Access Project, which tracks the flow of money in state politics. His wife donated another $720,000. Both figures top Dominion’s giving during the same time period, which came in at $628,000, though the aggregate figures don’t include direct donations from top executives, which havegrown in recent years.

But Democratic leaders have kept the group at arm’s length, rejecting offers – implicit and explicit — to replace or even double whatever Dominion Energy would have given to caucus fundraising efforts should they stop accepting donations from regulated utilities.

“We don’t take money that comes with a single condition,” said Senate Minority Leader Dick Saslaw, D-Fairfax, who is among the biggest recipients of Dominion’s cash, when asked about the group’s donations. “Ever. Never.”

Saslaw accepted more money from business donors this cycle than any other member of the General Assembly, according to an analysis by VPAP, and he’s been a vocal defender of corporate contributions. “I think it’s quite insulting to think that somehow or other I’m controlled by that,” he said while explaining his opposition to campaign finance reform during a debate earlier this year.

On the House side, Del. David Toscano, D-Charlottesville, who served as minority leader until December, said he personally stopped taking Dominion’s donations in 2017 but wasn’t comfortable with accepting Clean Virginia’s donations either personally or on behalf of the caucus.

“As you know in Virginia, anyone can give whatever they want, but I have been increasingly concerned over the years about large contributions coming from public sector corporations like Dominion and individuals and groups that are attempting to dictate an agenda of any kind to the General Assembly,” he said.

Clean Virginia, meanwhile, disputes the idea that their money would come with more strings than donations from a monopoly with business before the state and a track record of getting what it wants from lawmakers.

“The absurdity of the argument that a nonprofit out there promoting clean government and clean energy – you should not be taking their money because it’s a quid pro quo but you should be taking money from a utility you regulate – it’s kind of mind-boggling,” said Clean Virginia Executive Director Brennan Gilmore.

Republicans Cast Small-Donor Donations as Scourge

Individual Democrats have proposed a host of campaign finance reform measures over the years. None have made it far in the Republican-controlled General Assembly.

Gov. Ralph Northam endorsed legislation that would cap individual campaign contributions at $10,000 per candidate per election cycle. He also backed legislation that would ban direct giving by corporations and their political action committees.

Neither piece of legislation advanced out of committee, and in the case of the cap on individual contributions, two Democrats, Sens. Rosalyn Dance, D-Petersburg, and Lionell Spruill, D-Chesapeake, joined Republicans in voting the measure down.

Instead, House Republicans supported a bill introduced by Del. David Yancey, R-Newport News, focused on bringing more transparency to donations under $100, the vast majority of which go to Democrats. House Republicans rejected a floor amendment proposed by Democrats that would have extended the tighter reporting requirements to businesses and PACs that donate less than $50,000.

In their remarks, Republicans framed the small donations as the real scourge of campaign finance. (Incumbent members of the caucus took in $5.4 million in donations from business groups so far this cycle, compared with $326,000 worth of sub-$100 donations, according to an analysis by VPAP. Their Democratic counterparts took in $3.2 million from business groups and just under $1 million in small donations.)

“People are talking about dark money, PAC money, Citizens United, whatever,” said Sen. John Cosgrove, R-Chesapeake, during a February committee meeting. “Well, the new deal is basically to go countrywide and say, send Sen. Cosgrove 25 bucks, and you come up with this large chunk of money, which is virtually non-reportable — and it can be larger than any corporate donation, and the people of Virginia have no idea where this money comes from.”

The lobby of the Omni Homestead in Bath County, where House and Senate Democrats held their annual fundraising retreat with lobbyists at the end of June. (Photo by Ned Oliver/Virginia Mercury)

Ending Luxury Retreats with Lobbyists?

It remains unclear what, if any, reform Democrats would pass were they to take the majority in both chambers this year.

Most agree imposing some limits is important to bring Virginia in line with the vast majority of states, but they differ on where the line should be drawn and whether those limits should be imposed just on state-regulated monopolies, apply to corporations as a whole or be capped across the board.

At the Homestead, some hoped they would be strong enough to render the annual fundraising pilgrimage outmoded. Others said they thought the event was fine.

As the final evening wound down, delegates paired off again with lobbyists for dinner in one of the resort’s gourmet restaurants. The event flowed into drinks at the bar and, finally, a reception hosted by the gambling industry, where delegates drank booze out of Draft-Kings-branded cups and watched Democratic presidential candidates debate.

Hope, sitting with his wife and two children in the hotel lobby, said he thought it was a good way to spend time with his family while raising money for the party and building relationships with the lobbyists legislators work with during the frenetic session.

Others said they thought that spending time with people in exchange for money is a problem. “This is how corporate influence actually works,” said Carter. “It doesn’t look like an envelope full of cash under the table. What it looks like is, ‘Hey, I’m your friend.’ … People say donations don’t influence your votes, but it’s abundantly clear when you look at the results that are produced by the system.”

In either case, no one in attendance seemed to think that unilaterally shunning corporate donations as a party is a good idea as long as Republicans are still taking the money.

“I’m all for breaking apart this system,” said Del. Mark Levine, D-Alexandria, sipping a drink outside a reception where the winner of the golf tournament was announced as he detailed his vision for a publicly-financed campaign system. “But we don’t have power, they have the majority, and we’re never going to get any significant campaign finance reform as long as Republicans are in charge. We have to win. It takes money to win.”


Correction: An earlier version of this story misstated the personal wealth of Charlottesville hedge fund manager Michael Bills. He is a multi-millionaire.