Money Mania: In down economy, candidates are flush with cash

At a time when the state treasury is reeling from a multi-billion dollar deficit, jobs are scarce and many residents are losing their homes to foreclosure, Arizona’s candidates for federal office appear to be recession-proof.

Take U.S. Sen. John McCain, who has spent a whopping $15.6 million for his re-election bid, ranking only second in the nation behind Connecticut Senate Republican candidate Linda McMahon, whose World Wrestling Entertainment fortune is fueling her campaign.

But McCain has a secret weapon reserved exclusively for former presidential candidates: $17.1 million sits untouched in what’s known as the McCain-Palin Compliance Fund, which was set up to defray legal costs during the 2008 presidential campaign.

Money from that fund could be transferred to his Senate campaign — as has already been the case in smaller amounts — but McCain’s campaign spokesman would not say whether the senator planned to tap the massive war chest again.

Besides McCain’s high-profile Senate matchup against former Congressman J. D. Hayworth, Arizona’s congressional candidates can hold their own on a national scale, campaign finance records show.

U.S. Rep. Gabrielle Giffords in Arizona’s 8th Congressional District has raised almost $2.3 million for her re-election bid, while candidates in Arizona’s crowded 3rd Congressional District have collected nearly $4 million — on pace to shatter the fundraising total in that district in the 2008 election cycle, and far surpassing the money raised in the pre-recession 2006 election cycle.

What’s happening in Arizona is not an aberration, according to Michael Beckel of the Washington, D.C.-based Center for Responsive Politics, which tracks campaign money in U.S. politics.

“We’ve seen many, many races with significant millions of dollars pouring into them,” Beckel said. “Both federal lobbying and campaigning for federal office seem to be recession-proof.”

McCain’s big spending boost was bolstered in part by about $9.3 million from other campaign finance committees, the bulk which came from various 2008 presidential campaign funds.

Incumbents are always expected to collect big money, but other candidates, too, have reported raising a lot of cash in a down economy.

And nowhere is this as apparent as the contest in Arizona’s 3rd Congressional District.

All told, the candidates in CD3 have raised nearly $4 million by the end of the second quarter of the year, an impressive haul. The total for the whole 2008 election cycle was about $4.7 million.

Three candidates in the crowded field have each reported amounts that hovered around the $1 million mark.

There are several explanations, according to political observers. One of them is that CD3 is an open seat, as U.S. Rep. John Shadegg is retiring at the end of his current term. The vacancy offers the best chance for victory for anyone who wants to be in Congress.

Another explanation is that some candidates simply can raise a lot of money, despite a down economy.

Ben Quayle, the son of former Vice President Dan Quayle, can tap his father’s political network and has the advantage of a well-recognized family name.

“Other candidates have fared well, too, though, and I think that’s just a reflection of people really wanting to see a different direction in Washington,” said Chad Willems, a polling consultant for Jim Waring, a CD3 candidate.

To Willems, people are angry and frustrated with the direction of the country and that may have made them more enthusiastic to open up their wallets, hoping their investment would translate into changes at the nation’s capital.

The high number of candidates — it’s a 10-way Republican primary — and their caliber make the CD3 an anomaly, according to lobbyist Barry Aarons, who is often approached to help out in raising funds.

“I have been doing this for a lot of years and I don’t remember seeing that many legitimate candidates lined up in a race,” he said. “So I would say it’s the anomaly and not the economy.”

In fact, some of his clients who normally write “modest” checks for state legislative races have been a little more constrained this year because of the economy, he said.

Political consultants and observers, however, agree that there are extraordinary elements in CD3.

“You have the son of a vice president running and using his connections to run, you have a very wealthy, largely self-financed businessman and they’re all running in I think the wealthiest district in Arizona,” said political consultant Chuck Coughlin of Quayle and entrepreneur Steve Moak. “You take those two outliers out of the race and, you know, you see some fairly competitive fundraising going on.”

Quayle has raised more than $1.1 million and Moak has collected $824,000, about a third of which came out of his own pocket.

In fact, big money in CD3 is not unusual.

Shadegg raised $2.9 million in the 2008 cycle. His Democratic opponent, Bob Lord, collected $1.8 million.

Shadegg also raised more than $1 million during the 2006 election. Of course, times were better then.

For some candidates this year, it seems times are always better.

Beckel said his group expects the fundraising and the flow of funds into campaigns to intensify in the final stretch of the campaign, when money becomes most important.

“If there is a finite pool across the country, we haven’t plateaued yet,” Beckel said.

Indeed, big money is expected to keep flowing past the primary elections in several of Arizona’s congressional districts, which sport competitive general election candidates.

For instance, Giffords will likely drain her impressive war chest to compete with the winner of the GOP primary in CD8. Two candidates in particular, former state Sen. Jonathan Paton has raised nearly $700,000, and Jesse Kelly has banked nearly $500,000.

And in Arizona’s 5th Congressional District, Rep. Harry Mitchell will face the winner of a crowded GOP field where two candidates, David Schweikert and Jim Ward, have each raised more than $600,000.

— Arizona Capitol Times writers Bill Bertolino and Jeremy Duda contributed to this report.