October 17, 2014 4:00 AM
Kay Hagan’s October Surprise:
Her family’s businesses benefited from $400K in stimulus funds.
She was more right than she knew. As
it turns out, North Carolina’s Democratic senator was doing some of the
rigging. Now, Kay Hagan’s political future may depend on how voters
react to the story.
Hagan’s vote for the 2009 stimulus, coupled with revelations that
the legislation resulted in taxpayer funding for her family’s
businesses, has emerged as an October surprise in a race hitherto marked
by her unexpected resilience in a difficult political environment.
The
story has received limited attention in local press, but now a
Koch-backed free-market group is launching a major TV ad campaign
accusing the Hagans of self-dealing.
“Kay Hagan said that the
stimulus would help North Carolina — instead it helped the Hagans,”
James Davis of Freedom Partners Action Fund told
National Review Online.
“What voters despise most about Washington is that they aren’t playing
by the same set of rules as everyone else. The fact that the Hagan
family business received nearly $400,000 taxpayer dollars from the
stimulus just reinforces what everyone already suspects. The Hagans got
richer and North Carolina paid the price.”
The super PAC plans to
spend at least $1 million to bring that message to TV screens across the
Tar Heel state, starting next week.
In late September,
Politco reported
that JDC Manufacturing, a company owned by Hagan’s husband, received
almost $400,000 in stimulus grants to help pay for energy-efficiency
upgrades. Thereafter, the
Carolina Journal reported that Hagan’s husband kept the stimulus money in the family by paying a company he founded with their son to make the upgrades.
That decision “appears to be at odds with the conflict of interest policy the company submitted with the grant application,” wrote the Carolina Journal
in mid October, noting that the elder Hagan assured the federal
government that his company avoids even the appearance of a conflict of
interest.
Hagan’s campaign told
Politico that she
had nothing to do with her husband’s winning the grants. Presumably, she
also had nothing to do with his decision to use the stimulus money to
hire another family-owned company to make the upgrades.
JDC
Manufacturing did Hagan’s campaign no favors when, as the project came
in under budget, it “kept all of the savings, sending none back to
taxpayers who had funded the stimulus grant,” according to the
Carolina Journal. The Freedom Partners ad puts it
this way:
Kay
Hagan claimed Obama’s failed $800 billion stimulus would help North
Carolina, but now we know it was Kay Hagan’s family who
profited. . . . And what did the company do? It funneled the money to
another company owned by the Hagans to do the work.
This
kind of story can damage a candidate, as a liberal super PAC
acknowledged in another context. “Voters are connecting the dots when
candidates take positions that are not in the best interest of their
state or good public policy, but instead financially benefit a
candidate’s campaign benefactors,” Christopher Lehane
wrote in a memo obtained by
Politico
for Next Gen Climate. The super PAC, which is backed by
environmentalist Tom Steyer, is “on pace to spend $50 million on the
2014 midterm elections” against Hagan’s opponent, Thom Tillis, and other
Republicans, according to
Mother Jones.
Now Steyer’s
counterparts on the right are helping voters connect the dots between
Hagan’s position in government and her family’s bank account. The issue
has already gained traction among Republican voters. “A lot of the
volunteers are really upset about this story,” Donald Bryson, executive
director of American for Prosperity’s North Carolina chapter, told NRO.
“Whether it’s illegal or not, it doesn’t look good.”
Americans
for Prosperity, a Koch-supported advocacy group focused on
get-out-the-vote efforts in North Carolina, might also have its army of
volunteers raise this issue when going door-to-door.
The
independent swing voters likely to decide a close election, according to
a public pollster in the state, tend to be very concerned about these
sorts of allegations.
“Their suspicion of the integrity of
government is part of their identity,” says Martin Kifer, a former
Democratic staffer who now conducts polls for High Point University.
That might explain why, for instance, Peter Schweizer’s book on
congressional exemptions on insider-trading laws generated such outrage
and immediately prompted action. More than 150 lawmakers co-sponsored
the Stop Trading on Congressional Knowledge Act in response to the book,
which was spotlighted by CBS’s
60 Minutes. In short order, a bill that had previously received minimal support was signed into law.
Hagan’s
access to stimulus funding is obviously different from insider trading,
but the story on “how Senator Hagan’s husband won stimulus cash” taps
into the same kind of voter suspicions.
With Hagan and Tillis
separated by 1.4 points in the Real Clear Politics average of polls,
anything that increases the passion of the GOP base while appealing to
independents could be decisive.
On Election Day, “if we’re within a few thousand votes of each other, everything matters,” Kifer says.
— Joel Gehrke is a political reporter for National Review Online.
At this moment I can actually feel some degree of pity for Kay Hagan.
Her failure to appear at tonight's "debate" with Thom Tillis is another
defeat for her.
