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State GOP Organizations Facing Financial Ruin In Swing States

State GOP Organizations Facing Financial Ruin In Swing States

Multiple state Republican Party organizations in several 2024 battleground states are on the verge of financial ruin, largely thanks to infighting between institutional conservatives and the MAGA wing of the GOP.

The Washington Postreported Tuesday that the existing Republican Party apparatus in the critical swing states of Arizona, Georgia and Michigan have been decimated by the ongoing legal battles associated with former President Donald Trump's attempts to overturn the 2020 election. GOP leaders in those states have also reportedly had to put their 2024 organizing efforts on the back burner while addressing internal ideological struggles with MAGA activists.

"We desperately need to keep the lights on," Arizona GOP chairman Jeff DeWit reportedly told Republican National Committee (RNC) chair Ronna McDaniel during an April meeting.

According to an unnamed Republican source, DeWit requested the meeting with senior RNC leadership in the wake of sizable legal bills associated with Trump and his allies' attempts to submit alternate slates of electors in Arizona in 2020. The Post reported that the Arizona GOP's latest financial disclosure statements showed the party had just $55,000 to spend on federal races, and still owed roughly $34,000 to campaign vendors.

"[DeWit] would just ask people, 'When does money start cycling in?'" The Post's source said.

In Georgia, the state party has been so paralyzed by infighting between far-right zealots and traditional conservatives that Republican Governor Brian Kemp — who fended off a primary challenge from a Trump-endorsed candidate — created a separate PAC with legislative allies to end-run the Georgia GOP and support candidates directly.

"There has been an emphasis on ideological cleansing instead of electioneering," former Georgia Republican Party Chairman John Watson told the Post. "If those new entrants to the party want to argue the earth is flat and the election is stolen, those are counterproductive to winning elections."

Like Arizona, Georgia's Republican Party has been hamstrung by costly legal bills, with the Post reporting that the state party organization spent more than $500,000 paying down attorneys' fees relating to team Trump's alternate elector scheme. Georgia GOP donors have reportedly soured on financially backing the state party over concerns that Trump's influence cost Republicans two US Senate seats, with Senators Jon Ossoff and Raphael Warnock winning six-year terms in 2020 and 2022, respectively.

The most financially destitute Republican Party organization may be in Michigan, with the Post reporting that legal costs associated with Trump's attempts to overturn the election in the Mitten State have contributed to the party's $375,000 deficit. After MAGA activists elected 2020 election conspiracy theorist Kristina Karamo as party chair, the party's financial condition has reportedly led to her former supporters yearning for her replacement. The party has also been in a heated internal battle concerning a list that labeled some GOP activists as potential volunteers, and others as "RINOs," or "Republicans In Name Only."

"I think amateur hour is in full swing," Michigan Republican Party district chairman Jon Smith said of the list.

Click here to read the Post's full report.

Reprinted with permission from Alternet.

Kyrsten Sinema

Sinema's Campaign Funds 'Drying Up' As Democratic Donors Drop Her

Donors who gave to Senator Kyrsten Sinema's (I-AZ) 2018 US Senate campaign have largely left her for her Democratic opponent, according to federal campaign finance records.

As of the latest available Federal Election Commission data, Politicoreports that Sinema is finding little financial support in what's shaping up to be a close three-way race next November. Following her exit from the Democratic Party last December and Rep. Ruben Gallego's (D-AZ) campaign launch the following month, Sinema has had very little success maintaining enthusiasm among the financial backers who propelled her last campaign five years ago.

Sinema still has nearly $11 million in the bank from all of her combined fundraising, which is more than Gallego's total haul. However, according to Politico's breakdown of donor totals, Gallego has raised nearly three times as much as Sinema from the same group of 2018 Democratic donors the incumbent senator depended on when she first won the seat.

"Her fundraising is somewhat dried up," Arizona Republican operative Barrett Marson told Politico. "There isn’t an independent donor base as there is a Republican donor base and a Democratic donor base."

Rep. Gallego is also raking in donors who gave to Senator Mark Kelly's (D-AZ) 2022 campaign. When analyzing money from donors who gave at least $200 in the previous campaign cycle, Gallego has raised approximately $1.7 million from Kelly's backers. Sinema, by comparison, has only brought in roughly $205,000. Politico also found that Sinema's "burn rate" — the amount of money spent on a campaign versus the amount raised — is significant for an off year, with the embattled Arizona senator spending nearly half of her 2023 haul despite her not yet officially declaring for reelection.

Should Sinema declare her intent to run for another term in 2024, she would likely be pitted against both Gallego and Republican former TV news anchor Kari Lake — who ran a failed campaign for governor in 2022 on a far-right platform and who has still not conceded her loss. An internal Republican poll released last week found Gallego with a narrow lead of less than two percentage points in a three-way race, but slightly behind Lake in a two-way race without Sinema running a campaign of her own.

Reprinted with permission from Alternet.

Silicon Valley Bank

GOP Blames SVB Crash On Biden, But Trump Rolled Back Bank Regulations

Prominent Democrats pointed fingers at a Trump-era law that weakened oversight over banks like SVB.

Republicans are blaming the collapse of Silicon Valley Bank on Democratic policies and "woke" politics, using the crisis as a political cudgel against President Joe Biden and his party.

Experts say that SVB, based in Santa Clara, California, failed because of poor decision-making by bank leadership and bad investments. But that hasn't stopped Republicans from making baseless accusations and false statements about the situation. Democrats, meanwhile, have pointed out that it was former President Donald Trump who was responsible for loosening oversight of banks like SVB.

Rather than "woke" politics, reports say the bank invested in too many low-interest rate bonds, and when it tried to solve the problem, it spooked investors, who responded by trying to take their money out of the bank all at once, leaving it without enough money to give customers and ultimately taking the bank down. Republicans, meanwhile, are using cliched rhetoric around inflation, immigration, and diversity efforts to attack the administration over the bank's collapse.

"Banks are failing, groceries are unaffordable, cartels control our border & fentanyl is flooding our streets," Rep. Mary Miller (R-IL) tweeted on Sunday. "Joe Biden has led a drastic decline by putting AMERICA LAST. How much more damage will he do in the next 2 years? He should be IMPEACHED over the border alone!"

Rep. Clay Higgins (R-LA) made similar comments.

"Biden & his leftist policies are crashing banks, evaporating wealth, crippling us w/ debt, settling into WWIII, crime is rampant, & cartels control our border," he tweeted on Sunday. "But hey, they’ve established gender diversity in our schools, they’re fixing climate change and our military is woke."

And Rep. William Timmons (R-SC) blamed Democrats for inflation that is "now bringing down banks."

Donald Trump Jr., Trump's eldest child, falsely said banks didn't fail during his father's tenure.

"I don’t remember banks collapsing under Trump," he tweeted. "But don’t worry guys it’s only a matter of time till Biden/media blames him for that too. It has nothing to do with high interest rates / fed rate hikes necessitated by record inflation caused by his out of control spending."

In fact, 15 banks failed while Trump was in office, according to the Federal Deposit Insurance Corporation (FDIC), in Nebraska, Kansas, Illinois, Texas, Kentucky, Ohio, New Jersey, West Virginia, Utah, Louisiana, Wisconsin, and Florida.

Democrats are blaming the collapse of SVB and the ensuing closure by regulators of Signature Bank in New York on a law signed in 2018 by Trump that rolled back oversight of small and midsize banks like SVB. The rollback raised the dollar amount banks had to be responsible for in order to be considered too big to fail and said banks that were not worth at least $250 billion did not need to submit to stress tests. SVB CEO Greg Becker had lobbied the then-Republican-held Congress to roll back the regulation.

Sen. Elizabeth Warren (D-MA), who warned in 2018 that weakening oversight of so-called small and midsize banks could lead to situations like the ones SVB and Signature are currently in, wrote in an op-ed published in the New York Times Monday that SVB "suffered from a toxic mix of risky management and weak supervision."

"Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks," Warren wrote. "They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn’t withstand the pressure — and Signature’s collapse was close behind."

Biden also blamed the Trump law in part for the SVB collapse during remarks at the White House on Monday morning:

During the Obama-Biden administration, we put in place tough requirements on banks like Silicon Valley Bank and Signature Bank, including the Dodd-Frank Law, to make sure the crisis we saw in 2008 would not happen again.

Unfortunately, the last administration rolled back some of these requirements. I’m going to ask Congress and the banking regulators to strengthen the rules for banks to make it less likely that this kind of bank failure will happen again and to protect American jobs and small businesses.

Reprinted with permission from American Independent.

Kevin McCarthy

Republicans Can't Understand SVB Collapse, So They Babble About 'Woke'

House Speaker Kevin McCarthy’s (R-CA) plan to blame President Joe Biden’s economic policies for the Friday collapse of Silicon Valley Bank has hit a snag.

McCarthy wants the Republican message to be that Biden’s spending triggered a rise in inflation, and the Federal Reserve’s subsequent interest rate increases wiped out the bank. But his members have instead been claiming that the bank failed because it was too “woke,” a charge so ludicrous that a caucus leader reportedly urged them to “stop tweeting / going on tv if they don’t understand” the situation.

But McCarthy’s dilemma won’t be as easy to solve as that: It stems from the fact that GOP members of Congress are downstream from the same right-wing misinformation and infotainment apparatus as the party’s base. And that system has spent the Biden administration forcing every policy issue, no matter how complex, through its culture war lens.

SVB failed for banal finance reasons, as Bloomberg’s Matt Levine has detailed. It had a customer base of venture capitalists and the start-ups they fund. Those customers generally don’t require short-term, variable-rate business loans, so SVB instead invested their deposits in long-term, fixed-rate bonds without sufficiently hedging its risk. As interest rates rose, those bonds lost value. Some SVB depositors feared the bank’s finances had become too weak and withdrew their funds; since venture capitalists are panicky and move in a herd, the result was an old-fashioned bank run, and on Friday, regulators took over SVB, saying it lacked liquidity and had become insolvent.

But as the bank collapsed, the right-wing media concocted a very different story that fit neatly into their culture war narratives. In their telling, SVB failed because it was too “woke” and had excessively focused on diversity, equity, and inclusion efforts. Digital media outlets, online influencers, right-wing podcasters, powerful Fox hosts, and columnists at the staid Wall Street Journal all converged on the same talking points.

Republican politicians echoed this theme as it spread through the right-wing press, parroting the message that they perceived was popular among their political base. And not just random backbenchers — over the weekend, Rep. James Comer (R-KY), who leads the party’s investigations as chair of the House Oversight committee, went on Fox News to decry SVB as “one of the most woke banks,” while likely presidential candidate and Florida Gov. Ron DeSantis argued on the same show that its leaders had been “so concerned with DEI and politics” that it “really diverted from them focusing on their core mission.”

McCarthy had lost control of the GOP message to propagandists who produce political takes that are optimized for ratings and clicks, and now he is desperately trying to get it back.

This isn’t the first time the right has blamed bank failures on excessive support for people of color. In 2008, it became commonplace to blame the financial crisis on the Community Reinvestment Act. As Fox’s Laura Ingraham put it at the time, that law, which was enacted in 1977, “pushed all these institutions to lend to minority communities, many were very risky loans.”

That argument was wrong — only a small percentage of subprime mortgages were issued by depository institutions under the CRA — and it scapegoated borrowers rather than the predatory lenders who in many cases deceived them or the bankers who profited handsomely by selling those subprime mortgages packaged in complicated financial products, even though it dramatically increased their institutions’ risk.

But the CRA charge was at least vaguely related to actual federal economic policies. That reflected the sizable portion of right-wing media attention paid during the Obama administration to developing talking points in favor of deregulation and other conservative economic priorities like cutting taxes, particularly for wealthy Americans and corporations, and slashing the social safety net.

The right’s priorities have shifted since then to increasingly favor the empty calories of the culture war. President Donald Trump signed legislation deregulating banks like SVB, just as he signed into law a huge regressive tax cut and pushed to kick people off health insurance by dismantling Obamacare. But he was largely uninterested in broad areas of federal policy, instead reflexively viewing issues through his own personal grievances. The right-wing press, and the GOP, adjusted to match his focuses.

By the time Biden took office, the right’s policy debate muscles had atrophied. Biden offered a far-reaching economic agenda, but in early 2021, Fox’s coverage instead revolved around the “woke mob” supposedly targeting Mr. Potato Head and Dr. Seuss. Even when the network’s influential commentators discussed Biden proposals like his $1.9 trillion economic stimulus bill, they fixated on the 0.06 percent of the total supposedly wasted on “social justice stuff.” The rest of the right-wing popular press followed Fox’s lead.

The shift by Republican propagandists has been bad for the party’s electoral prospects. As Fox’s hosts trained their audience to fixate on their own bizarre grievances, Republican politicians followed along. But it turns out that normal people don’t care about the same things as millionaire TV hosts like Tucker Carlson — in the 2022 midterms, Fox-friendly candidates who pushed the network’s obsessions were trounced, helping Democrats retain the U.S. Senate and several governorships while keeping the House closely divided.

To date, McCarthy has shown little interest in creating daylight between his members and the right’s infotainers — he’s fresh off of giving Carlson’s team exclusive access to January 6 security footage so the Fox host could generate revisionist propaganda. And now the House leader is reaping the fruits of his party’s right-wing media grievance addiction.

Reprinted with permission from Media Matters.