New Reports Highlight GOP Senate Candidates’ Vulnerabilities

This week, a wave of new reporting uncovers Senate Republican candidates’ vulnerabilities in key races across the map. In Nevada, CNN reported Sam Brown started a PAC to “help elect Republicans” that has instead been used to pay off his own losing campaign debts. In Pennsylvania, the Associated Press reported “David McCormick is gearing up for a Senate run in Pennsylvania. But he lives in Connecticut.” And The Messenger reported that in Montana, West Virginia and Pennsylvania, GOP Senate candidates have “sprawling finances, business dealings, … and unpaid tax bills” that are “rais[ing] tax questions.”

Here’s what they’re saying: 

The Messenger: Wealthy GOP Hopefuls … Raise Tax Questions
Recruiting rich candidates means a bigger paper trail
By Matt Holt
August 14, 2023

Key Points: 

• The National Republican Senatorial Committee has prioritized recruiting wealthy candidates. 

• In Montana, Republicans have recruited retired Navy SEAL Tim Sheehy, the CEO of Bridger Aerospace, an aerial firefighting company worth around $300 million. In West Virginia, they are backing Gov. Jim Justice, the wealthiest man in the state who oversees a coal and hospitality empire. And in Pennsylvania, the NRSC is attempting to lure former Bridgewater Associates CEO David McCormick back for another campaign — he narrowly lost the 2022 GOP primary.
  
  
• …their sprawling finances, business dealings, and in some cases unpaid tax bills could provide fodder for their Democratic opponents. 

• “Republicans are recruiting candidates with massive baggage and disqualifying vulnerabilities,” said DSCC spokesperson Tommy Garcia. He argued that their liabilities will bring about “vicious primaries” that will lead to Democrats keeping hold of the Senate.

• [David McCormick’s] financial disclosure from the 2022 primary revealed that he earned $22.5 million in salary and owned multiple properties in Manhattan, Dallas, Colorado, and Pittsburgh, along with his family’s ranch in Pennsylvania that he highlighted throughout his campaign. He and his wife, Dina Powell McCormick, owned assets with a total value between $116 and $290 million. 

• [McCormick] and his ex-wife held $39 million worth of assets, including six Credit Suisse bank accounts worth $4.3 million. The Swiss bank is famous for its banker-client confidentiality. The documents obtained were prepared on December 23, 2014….That was the same year the Senate released an extensive investigation that found Credit Suisse helped their American clients evade taxes. 

• A McCormick aide did not respond to requests for comment for this article. 

• McCormick, who lost to celebrity Dr. Mehmet Oz by less than 1,000 votes in the GOP primary last year, was relentlessly attacked over Bridgewater’s investments in China and has recently come under scrutiny for his financial ties to Saudi Arabia. 

• [Tim] Sheehy brought the company [he founded] public in 2023, merging with Jack Creek Investment Corp., a “blank check company” incorporated in the Cayman Islands. The deal valued Bridger at $869 million. 

• The Caymans also are a tax haven for wealthy individuals, and companies are typically incorporated there to avoid paying income, capital gains, or corporate taxes.

• Bridger Aerospace is incorporated in Delaware, like many other companies in the country. Corporations registered in Delaware can have their headquarters elsewhere in the U.S. and are exempt from state corporate income tax, and are drawn to the state due to their corporate secrecy laws. Montana has a 6.75% corporate income tax rate. 

• The Sheehy campaign did not respond to multiple requests for comment.
  
  
• In March, the Wall Street Journal reported that [Jim] Justice had put his coal businesses up for sale and that Justice’s empire had fallen on hard times as he was “personally on the hook for nearly $700 million in loans his coal companies took out from now-defunct Greensill Capital.” 

• New reporting from the Parkersburg News and Sentinel found that a company owned by Justice and managed by his family has more than $124,000 in tax liens from the state tax division. 

• An editorial in the Charleston Gazette-Mail published on December 21, 2022, said that Justice “is notorious for dodging fines, taxes, court settlements, fees and vendor costs associated with his businesses.” 

• A story published in the West Virginia record in 2021 noted that Justice and his family owed nearly $100,000 in 2020 property taxes. 

• In May, the Club for Growth, who supports Justice’s primary rival, Rep. Alex Mooney, launched an ad calling Justice a “deadbeat billionaire” who is an “embarrassment” to West Virginia.
  
  
• “Do we truly want someone who doesn’t pay his bills and accrues fines left and right to represent our great state,” Mooney posted on X, formerly known as Twitter, on July 26. “Absolutely, not! West Virginians deserve better than this.”
  
  
• The Justice campaign did not return requests for comment. 

Associated Press: David McCormick is gearing up for a Senate run in Pennsylvania. But he lives in Connecticut
By Brian Slodysko 
August 14, 2023

Key Points: 

• David McCormick had a clear explanation for why his fellow Republican, Dr. Mehmet Oz, lost a critical Pennsylvania Senate seat: Voters viewed the daytime television celebrity as an interloper from New Jersey with limited ties to the state he hoped to represent.

• “People want to know that the person that they’re voting for ‘gets it,’” McCormick, who narrowly lost to Oz in a GOP primary, said in March when asked to offer a postmortem of the general election defeat. “And part of ‘getting it’ is understanding that you just didn’t come in yesterday.”

• “I live in Pennsylvania,” McCormick said during a March appearance on Texas Sen. Ted Cruz’s podcast.

• […] a review of public records, real estate listings and footage from recent interviews indicates he still lives on Connecticut’s “Gold Coast,” one of the densest concentrations of wealth in America. The former hedge fund CEO rents a $16 million mansion in Westport that features a 1,500-bottle wine cellar, an elevator and a “private waterfront resort” overlooking Long Island Sound.

• The trappings of a wealthy enclave, well outside Pennsylvania, offer a jarring contrast with the political identity McCormick has sought to cultivate, which emphasizes his upbringing buck hunting, his Army service and his desire to serve his home state.

• “He spent a big chunk of time working for Wall Street and living in Connecticut,” Borick said of McCormick. “There’s nothing wrong with that choice — unless you want to be a U.S. senator from Pennsylvania.”

• He added, “As someone who is aware that he is going to have to confront this, it’s questionable to not really devote yourself.”

• A spokeswoman for McCormick, Elizabeth Gregory, declined to make him available for an interview and would not say how much of his time he spends at his Connecticut mansion, which also boasts a spa, pool and heated pavilion nestled in an area that real estate listings describe as a “summer playground of America’s wealthiest families.”

• McCormick has also not received a homestead tax exemption on his Pittsburgh home, a tax break reserved for an individual’s primary place of residence. He voted in a Pennsylvania election for the first time in 16 years during the 2022 Republican primary, when he was on the ballot, voting records show.

• McCormick’s wealth … presents an opportunity for Democrats, who are likely to seize on his ties to Wall Street in what is expected to again be one of the most competitive Senate matchups in the country.

CNN: Nevada GOP Senate candidate raised money to help other candidates – the funds mostly paid down his old campaign’s debt instead
By Abby Turner and Andrew Kaczynski
August 12, 2023

Key Points:

• Nevada Republican Senate candidate Sam Brown created a political action committee to “help elect Republicans” but most of its funds were spent paying down debt from his failed previous campaign. The group donated less than 7% of its funds to the candidates it was set up to support, according to campaign finance records – a move one campaign finance expert likened to using the PAC as a “slush fund.” 

• Brown formed the Duty First PAC in July 2022, saying the organization would help Republicans take back Congress. A month earlier, Brown lost the Republican Senate primary to Adam Laxalt after raising an impressive $4.4 million for his upstart campaign, but his campaign was left with more than $300,000 in debt.

• Now Brown is running again in Nevada as a top recruit of Senate Republicans. A former Army captain, Brown made lofty promises when launching his PAC, Duty First.

• Since then, the PAC raised a small amount – just $91,500 – and used the majority of their money – $55,000 – to repay debt from Brown’s failed campaign for Senate, which Brown had transferred over. Campaign finance experts told CNN this falls into a legal gray area.

• Of the $90,000 spent so far, just $6,000 made its way to five Nevadan Republican candidates’ committees. An additional payment for $1,000 was listed as going directly to congressional candidate Mark Robertson as a contribution but lists the amount as being directly paid to the candidate at his home – not to his committee.

• Instead, the Duty First PAC made over a dozen debt payments. A combined $23,000 was spent on website and software services used by Brown’s Senate campaign. Another $11,275 went towards paying down the failed campaign’s credit card, with an additional $3,000 spent on credit card interest fees.

• Duty First paid off over $1,200 in credit card debt accrued at a country club near where Brown previously lived in Dallas, Texas, and ran for the state house in 2014. Duty First PAC is also responsible for eventually repaying Brown $70,000 that he personally loaned his committees.

• According to a CNN analysis of Duty First PAC’s FEC filings, of all the money raised, less than 7% went to candidates. When considering Brown’s personal loans, debt the PAC took on from Brown’s campaign, and expenditures, fewer than 2% of the PAC’s funds went towards candidates in 2022. 

• Despite this, Brown played up his PAC’s donations to candidates in interviews and in posts on social media. The PAC’s donations were from grassroots donors, who typically donated $50 or less. 

• Campaign finance experts CNN spoke to said Brown marketing the Duty First PAC as a way for people to financially support conservative candidates was a “creative way” for Brown to pay off old campaign debts behind the scenes.

• “It creates a situation where contributors to a PAC may think that PAC is doing one thing, which is supporting political candidates, when in fact what it’s doing is being used to pay off long standing debts from a previous campaign,” said Stephen Spaulding, vice president of policy at Common Cause and former advisor to an FEC commissioner.

• Spaulding said transferring debts between campaign committees and PACs is a gray area in campaign finance law. In Brown’s case, … what struck the experts as odd was that Brown terminated the Sam Brown PAC, and transferred his outstanding loans and debts to the Duty First PAC.

• “Unfortunately, Sam Brown, like too many other politicians, has given almost no money to other candidates and, instead, has used his PAC as a slush fund,” said Paul S. Ryan, executive director at Funders’ Committee for Civic Participation. “Many donors would understandably be upset if they learned their money wasn’t used to help elect other candidates like Brown – the reason they made their contributions,” he added.

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