Self-Funders Dominate Texas Delegation in Congress

By , The Texas Tribune, texastribune.org

WASHINGTON — For Texas millionaires eyeing a self-funding run for Congress, Tuesday night’s primary runoff elections delivered something of a split decision.

Two men who each loaned their campaigns more than a $1 million ran for Congress in open-seat races. One man won, the other lost.

In the South Texas race, attorney Vicente Gonzalez spent almost $1.7 million and demolished his Democratic rival. He is all but assured to win the seat outright in November.

But in West Texas, Lubbock Mayor Glen Robertson spent about $1.6 million of his own funds and came up short.

Congressional candidates self-funding their campaigns isn’t a new phenomenon. Of the current Texas delegation, all but a handful invested seed money of at least five figures into the races that first vaunted them into federal office, according to a Tribune analysis of campaign finance records.

But Tuesday night’s mirror situation, with candidates from each party displaying a willingness to spend well over $1 million to win, has led many in Texas and national politics to wonder if this is the new norm in U.S. House races, making it even tougher for all but the enormously wealthy to vie for such seats.

“If you’re rich, and you’re willing to burn your own cash as fuel for your political ambition, there’s little stopping you.”— Dave Levinthal, campaign finance expert

“Money is an important aspect of our elections,” said Nathan Gonzales, an expert on Congressional races and editor of the Rothenberg & Gonzales Political Report. “It’s not the most important factor, or else Jeb Bush would be the Republican nominee for president.”

“You can be the best candidate in the world with the best message, but if you don’t have any money to tell people, then you’re not going to win.”

There is no way around it: running a Congressional campaign anywhere in this country costs millions.

And so federal candidates are faced with two choices: paying for the campaigns themselves or spending hours each day on the phone with donors and political action committee chiefs asking for contributions up to $2,700.

“If you’re rich, and you’re willing to burn your own cash as fuel for your political ambition, there’s little stopping you,” said campaign finance expert Dave Levinthal of the Center for Public Integrity.

 

Most candidate money comes in the form of loans, not contributions. Because the loan is from the candidate, there is rarely interest assessed. After winning their races, several members of the delegation have held “debt retirement” fundraisers, slowly paying themselves back with contributions from donors and political action committees.

All four candidates in Tuesday’s two competitive congressional runoffs loaned money to their campaign. But in both races, one of the candidates relied far more on self-funding.

In the West Texas race for an open Republican-leaning seat, Jodey Arrington won by leaning on his connections through previous jobs at Texas Tech University and in the George W. Bush administration to raise money in smaller increments. Yet Robertson, the Lubbock Mayor who made a fortune in part through commercial real estate, heavily outspent him. Like Donald Trump on the national stage, Robertson attempted to tie his money to his message. Because he did not have to beg for money, he argued, he could not be bought.

Arrington ultimately managed to defeat him by an eight-point margin, though even that win involved Arrington loaning his campaign $25,000.

In the Rio Grande Valley Democratic race, Edinburg School Board member Juan “Sonny” Palacios, Jr. loaned his own campaign $261,000 but raised an additional $170,000 via donations.

None of it mattered there. Gonzalez, with a self-funded war chest of more than $1.6 million, blew Palacios out of the water Tuesday night by a 32-point margin.

Gonzalez’s cash advantage allowed him to spend heavily and early on television ads, to the point that he became a local celebrity on the trail. And that early spending also boosted his credibility as a candidate, helping draw influential political action committees, Washington lobbyists and Democratic members of Congress to his side, many of them making their own donations to Gonzalez’s campaign, reinforcing his financial advantage.

Dolly Elizondo was among the candidates who ran in the Democratic primary but didn’t make the runoff. She called Gonzalez’s loans “intimidating.”

She loaned her own campaign $165,000 but also worked donors on the phone. Elizondo said she spent years financially planning a run for public office and had no regrets about her loan.

“I’m a businesswoman,” she said. “I happen to be in the business of real estate investments, so I take risks all the time, and I am comfortable with it … It was something I could do and be comfortable with if I lost.”  

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Despite Gonzalez’s blowout, there are inherent weaknesses to funding one’s own campaign.

Consider the case of former Lt. Gov. David Dewhurst, one of the biggest self-funders for a congressional bid in U.S. history. In his 2012 race against Ted Cruz for the Republican nomination for an open U.S. Senate seat, he gave $25 million to his campaign. But in a low-turnout race in the dead heat of the summer, Cruz inspired passions among the grassroots and defeated him.

It should be noted that even Cruz, despite his fundraising prowess, was a self-funder himself. While Dewhurst’s money dwarfed his own campaign loans, Cruz gave himself $1.4 million to stay competitive.

The upset demonstrated the limitations of self-funding. While fundraising dictates how much a candidate may spend on television, digital ads and direct mail, reeling in a large haul with many contributions can reflect a strong organization and widespread enthusiasm for a candidate.

“They’ll also almost certainly vote and attempt to convince friends and family to do so,” Levinthal said of donors.

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Yet John Ratcliffe illustrates another tactic in which self-funding can prove pivotal. He challenged then-U.S. Rep. Ralph Hall in a 2014 East Texas Republican primary. It is nearly impossible to raise money against an incumbent, and so he loaned his organization nearly $700,000. Ratcliffe won.

Elizondo wondered if the increasing personal cost of running for Congress precluded those without the means to pony up.

“Obviously, anyone can file and run, but will it be a viable race is the question if you don’t have the cash?” she asked. “I don’t know.”

The Texas Tribune is a nonpartisan, nonprofit media organization that informs Texans — and engages with them – about public policy, politics, government and statewide issues.