New Castle County proposes investments in police salaries, parks, libraries and more

Sources of money for Delaware's blue wave may surprise you

Scott Goss Karl Baker
The News Journal

Newark's Sen. Bryan Townsend went on Facebook in the weeks before November's midterm election and noticed a strange post.

It was a political ad supporting his run for re-election. He had never seen it before. Later, he saw similar ads that had come in the mail. What stood out most, he said, was the 6-year-old photo of his once-skinnier self that accompanied the advertisement.

People in his district noticed the ad blitz, too.

“I kept hearing from constituents, ‘Enough mail, enough mail. Can you please stop?’ And, I was like, ‘It’s not me. I literally can not stop it,’” Townsend said.

Voters head to the polls to cast their votes in the midterm election in early November on Cab Calloway School of the Arts.

The ads were paid for by Building Stronger Communities, a months-old entity that exists only in documents filed with the state election office.

The group's media barrage was just one part of a multimillion-dollar offensive that flowed through the Delaware Democratic Party and other entities that support its causes.

Sometimes it dribbled in as smaller contributions from payday lenders in Oklahoma and California or trade unions in Pennsylvania. Other times, it was checks for $240,000 or more from national party organizations and union-affiliated groups.

The money alone did not win any elections. But it did give Democrats an advantage over their Republican counterparts, who struggled to keep pace.

"Is it bad that at the end there is so much cash flowing in and out?" asked state Democratic Party Chairman Erik Raser-Schramm. "I, as state party chair, will say 100 percent 'yes,' but at the same time we know the cost to win elections."

Erik Raser-Schramm speaks after being named chairman of the Delaware Democratic Party during the Democratic State Convention at Delaware Technical Community College, Terry Campus, in Dover. As chairman, Schramm oversaw the contributions to and expenditures from the party during the midterm campaign.

The effort ultimately helped Democrats tighten their grip on power, flipping two seats in the Legislature and winning the Delaware state auditor and treasurer posts – the last two statewide offices still held by Republicans.

Those outcomes tell only the end of the story.

The rest of the tale occurred behind the scenes, writ in the language of campaign finance reports. Those reams of pages show how the party and its supporters were able to use a fundraising model tested during a 2017 state Senate special election to capitalize on a growing anger over President Donald Trump.

A year ago, that influx of money from outside of Delaware helped Democrat Stephanie Hansen defeat Republican John Marino for the state Senate seat left vacant by Bethany Hall-Long's election to lieutenant governor four months earlier. 

"We had a 10-10 tie in the Senate and entities from all corners of the party ... came together and said we've got a job to do," Jesse Chadderdon, executive director of the Delaware Democratic Party.

"That served as a blueprint for how these entities can cooperate without feeling like one of them is winning and one of them is losing," he said.

Jesse Chadderdon is the executive director of the Delaware Democratic Party.

The plan capitalized on two major sources of cash: hefty tithes paid by the all-Democrat congressional delegation and an injection of cash from organized labor, sometimes spent on behalf of candidates without their knowledge.

James Maravelias, president of Delaware AFL-CIO and a central figure in the marshaling of union resources to aid Democratic candidates, said in today's political climate it is necessary to spend massive sums of money to maintain middle-class standards.   

"We’re living in a time where some parties have drawn the line in the sand with us, and we got to go with our friends," said Maravelias, who in the last year has worked with Democrats to fight off what he describes as anti-union efforts.

Democrats have long held a sizable margin in Delaware in voter registration. But their ability to tap into large amounts of out-of-state funding has given them another clear – and little understood – advantage.

While Republicans used sometimes-opaque political action committees and out-of-state benefactors, they did not generate nearly the volume of cash, did not share their resources as broadly and did not deploy their money with the same level of organization.

That difference helps explain how Democrats, who once trailed Republicans in fundraising prowess, have turned the tables to win tight races while keeping the contests where they have a clear advantage well out of reach. 

“Just as we’ve seen over the years a lot of conservative interests spending major money on campaigns, I mean major money, I think we’re maybe now in an era where on the Democratic side, they’re starting to pool their resources,” said Townsend, D-Newark.

Who funded the blue wave

Cash is the lifeblood of any political campaign.

Candidates need it to travel to events, to buy targeted advertising, fund donations to civic groups, create websites and even pay for the occasional meal. 

The Delaware Democratic Party, not the candidates, pays for some of the big-ticket expenses such as polling, common messaging, phone banks, coordinated canvassing efforts and even the salaries of some campaign staff.

The party took in $1.5 million for such efforts in 2017 and 2018 – roughly double past election cycles due to the special election.

Nearly 80 percent of the haul came through federally regulated contributions from corporate political action committees and wealthy individuals across the country.

Six out of every 10 of those dollars came from Delaware's three members of Congress; the Democratic National Committee; and Gov. John Carney, who served as the state's lone U.S. representative until 2016.

U.S. Sen. Tom Carper salutes veterans as he arrives at a ceremony unveiling a new Gold Star Families Memorial Monument at the Delaware Memorial Bridge. During the midterms, Carper contributed close to $225,000, a total matched nearly dollar for dollar by the national Democratic Party, to the state party

U.S. Sen. Tom Carper contributed close to $225,000, a total matched nearly dollar for dollar by the national Democratic Party. The DNC's $221,000 in contributions are more than 10 times what the Republican National Committee gave to the Delaware GOP.

Another $275,000 came from the campaigns of U.S. Sen. Chris Coons, U.S. Rep. Lisa Blunt Rochester and Carney's former campaign accounts.

Tracking the original sources of money that flowed from Delaware's all-Democrat congressional delegation is not easy because many of the dollars came in as small donations from groups with names like Opportunity & Renewal PAC, Country Roads PAC and Nutmeg PAC.

Some of the top donors to those incumbents were PACs and individuals connected to major law firms, credit card companies, insurance companies and the pharmaceutical industry, according to the campaign finance tracking website Open Secrets.

They included major local employers such as DowDuPont, Discover Financial Services, Bank of America and the Wilmington law firm Young Conaway Stargatt & Taylor.

The Delaware Democratic Party also received close to a $185,000 from federal committees dedicated to turning state Legislatures blue and keeping them that way.

The Democratic Grassroots Victory Fund, the Hillary Victory Fund and the Democratic Legislative Campaign Committee all collect donations from supporters around the country and redistribute that money to help local Democratic candidates win elections.

House Majority Leader, Valerie Longhurst, D-Bear speaks during a rally for the Delaware Equal Rights Amendment on the steps of Legislative Hall in Dover. Longhurst also serves as the vice chair of the national legislative committee, which contributed to the Democratic campaigns in the state.

"We put money toward states that could flip or gain more seats," said Delaware House Majority Leader Valerie Longhurst, D-Bear, who also serves as the vice chair of the national legislative committee

As that money from those traditional funding sources was flowing in, other organizations closer to Delaware, but still out of state, were directing even more cash toward local Democrats.

Organized labor's impact 

Halfway between New York City and Philadelphia sits 104 Interchange Plaza, a standard suburban office building, home of the New Jersey Laborers PAC, a political arm of the Laborers’ International Union of North America.

The organization calls itself "the most progressive, aggressive and fastest-growing union."

Listed at the same address, according to the original Delaware campaign filings, was the entity called Growing Economic Opportunities.

On Oct. 25, just two weeks before the election, that organization transferred $240,000 to an account held by a newly registered third-party advertiser called Building Stronger Communities, which then spent the money on campaign ads for five Democratic state Senate candidates.

The entity lists New Jersey political operative Keith Furlong as its treasurer. In 2016, the publication, PolitickerNJ, called Furlong, “the whispering ghost in the (New Jersey) political machine."

Furlong did not reply to a request to comment.

Building Stronger Communities, an unknown political group, received a $240,000 donation from New Jersey-based Growing Economic Communities in the final days before the midterm election. The money paid for campaign ads in key legislative races.

Days after the $240,000 transaction was when Townsend noticed the strange ad on Facebook, paid for by Building Stronger Communities.

Such names that convey little meaning are commonly used in politics to avoid transparency, said Michael J. Malbin, director of the Washington, D.C.-based Campaign Finance Institute.

”It just suggests a donor who finds it more convenient to stay a step removed, and create another organization to be its gladiator,” said Malbin, who also is a professor at the University at Albany, SUNY.

Townsend said he doesn't know why the group chose his race, one of the more secure for Democrats.

The other Democratic candidates supported by Building Stronger Communities were Hansen; Dover's Louisa Phillips and Trey Paradee; and Laura Sturgeon, who defeated Republican incumbent Greg Lavelle in the most contested of Delaware's Senate races. Of the five candidates backed by the PAC, only Phillips lost.

Building Stronger Communities, an unknown political group, received a $240,000 donation from New Jersey-based Growing Economic Communities in the final days before the midterm election. The money paid for campaign ads in key legislative races.

Rob Lewandowski, a spokesman for the New Jersey Laborers PAC, confirmed that Growing Economic Opportunities is affiliated with his union but did not respond to questions about the $240,000 donation, including why it was funneled through Building Stronger Communities, a group he claimed is not run by the union.    

John Duthie, treasurer of the New Jersey Laborers, also is listed as treasurer of a group called the Laborer's Political League of Delaware PAC.

During the last election cycle, it contributed $5,000 to the DE Senate PAC, $6,000 to the Delaware Building & Construction Trades PAC, and $5,000 to Delaware Women on the Move, among dozens of other donations to union-friendly Delaware candidates.

Early in 2018, the Laborer's Political League of Delaware also transferred $31,000 to the New Jersey Laborers PAC.

Jim Maravelias, president of the Delaware AFL-CIO.

Maravelias of the AFL-CIO said that Labor International's strategy is to pool money from Delaware, New Jersey and New York City, then send it out during campaigns to areas most in need. Often, those are in Delaware, because “organized labor is on the dinner plate whenever there’s a budget crisis,” he said.

“If we don’t [spend money on campaigns], then somebody else will that’s going to be directly in opposition to us,” he said. 

Central tenets for most union-affiliated PACs include legislation to create new construction and oppose right-to-work laws, which would make it illegal for businesses to require that their employees join a union or pay agency fees – charges used to cover the cost of union services for non-union members – as a condition for employment.

Payday lenders

The end game for organized labor is more clear than the goal of other groups.

In the final days before the election, a trio of entities from Oklahoma, California and Georgia with ties to payday lending and online gambling sent checks to the state party, which cashed all three.

AWL Inc. is an online payday lender and focus of a federal class-action lawsuit that contends the company is using a Native American tribe in Oklahoma to avoid state and federal usury laws and is charging borrowers interest rates as high as 740 percent.

The company donated $10,000 to the Delaware Democratic Party on Oct. 19.

The same day, the party received $2,000 each from HPUL Project Operations, a California tribe that operates several online payday lending business, and Strategic Link Consulting, a Georgia company with ties to the online lending industry.

Another Georgia-based payday lending company called Select Management Resources donated $10,000 to the House Democrats PAC a month earlier.

None of those companies responded to requests for comment, and Democratic Party officials said they are unaware of why they might have contributed money here.

Lawmakers in Delaware passed a major reform bill in 2012 that limited the number of payday loans a person can take out at any one time. Since then, two other reforms have been proposed to cap payday lending interest rates at 100 percent but both stalled out in committee.

Both were introduced by state Rep. Helene Keeley, D-Wilmington, who retired to take a job as deputy director of the Delaware Lottery Office. She serves as treasurer of the state Democratic Party.

Asked if donations from out-of-state payday lenders should receive extra scrutiny, Chadderdon said that past legislation is evidence that payday lenders aren't currying favor with Democrats.

"We get quite literally hundreds of contributions that come in from a variety of entities," he said. "We've got employees to pay and we got a lot of obligations."

Still, party officials have a responsibility to ensure they can ethically and legally receive contributions, Chadderdon said. The party made a decision in the past not to take money from the National Rifle Association.

Asked if the party will return the money to the payday lenders, he said, that is a "conversation that can and should happen."

"We should have a conversation about whether those are entities we're comfortable taking money from in the future," he said. "But that's not a decision we get to make as individuals. We have a whole body that makes those decisions."

Contact reporter Scott Goss at (302) 324-2281, sgoss@delawareonline.com or on Twitter @ScottGossDel. Contact Karl Baker at kbaker@delawareonline.com or (302) 324-2329. Follow him on Twitter @kbaker6.