POLITICO: New business plan: crushing Dems

By: Jeanne Cummings and Chris Frates

 Democrats may be going out of their way to say they aren’t anti-business, but business is gearing up to demonstrate that it’s anti-Democrats – at least when it comes to members of the party’s liberal wing.

The latest blatant signs of hostility come from coal executives who are considering starting up their own political operation to work against candidates they deem unfriendly to their interests. Their first three targets are all Democrats.

The U.S. Chamber of Commerce has already vowed to invest $75 million in the mid-term elections. And health insurers are also planning to play big in November, although the specifics remain in flux. Both groups are hedging their bets by aligning themselves with some moderate or conservative Democrats in case Republicans don’t win control of Congress.

Both America’s Health Insurance Plans (AHIP) and its Coalition for Medicare Choices are expected to play a major role in the messaging, along with individual companies. But neither group, according to sources, plans to directly attack Democrats, which would risk infuriating the White House as it writes reform regulations as well as the Blue Dog Democrats who opposed the legislation. But the negative messages could still create headaches this fall for health care supporters.

For instance, districts with large populations of seniors enrolled in Medicare Advantage will likely be inundated with ads explaining it was health reform – not insurers – that is responsible for their higher bills and slashed benefits, one industry official said.

Robert Zirkelbach, a spokesman for the industry trade group AHIP, wouldn’t discuss the organization’s political battle plan except to say, "We are going to continue to talk about the need to address skyrocketing medical costs and the significant impact that Medicare Advantage cuts will continue to have on the 11 million seniors in the program."

A handful of large insurance companies are considering a separate campaign aimed at building long-term relationships with Democrats, including those who bucked their party leadership on reform or who stood by the insurance industry on other issues.

"They understand and recognize that it’s not a partisan effort, that they need to play in the middle on both sides of the aisle," one source familiar with the discussions said.

The decision to operate independently of AHIP "reflects the fact they want a streamlined process, regardless of cost, without dealing with ankle biters," the same source noted.

When AHIP President Karen Ignagni was asked about the potential for a breakaway group, she said: "I generally make it a policy not to comment on palace intrigue."

Bill Miller, the chamber’s political director, has a simple explanation for why it is mobilizing.


"You could spin the wheel of industry and probably not land on a number for an industry that doesn’t believe they have been kind-of attacked by this Congress," he said.

Although Miller said the chamber will support some pro-business Democrats, he conceded that the chamber’s members "are looking to us and others to try and help reset the composition of the Congress."

Political advertising already is on track to far exceed any prior midterm cycle, according to Evan Tracey, of the Campaign Media Analysis Group,. Thus far, candidates, political parties and interest groups have spent about $139 million on advertising – more than twice the amount spent during the same period in 2006.

The entry of major corporate spenders could send those numbers even higher. That’s the prediction of Fred Wertheimer, a campaign finance reform advocate. He said the coal industry’s action represents "the first" substantive move by corporations to engage in the campaign cycle after a recent Supreme Court decision overturned a law banning such activity, "but it ain’t going to be the last."

"This is the beginning. We are going to see, in my view, very large amounts spent involving this free-up money in 2010 congressional races," said Wertheimer. "But over a period of time, this is going to absolutely explode."

That could spell big trouble for Democrats, who could be forced to square off against deep-pocketed companies in addition to their traditional Republican adversaries in a stridently anti-incumbent environment.

The coal effort is being led by International Coal Group’s Senior Vice President Roger Nicholson. "With the Supreme Court ruling, we are in a position to be able to take corporate positions that were not previously available in allowing our voices to be heard," Nicholson wrote in a letter to several other coal executives, which was first reported in the Lexington Herald-Leader.

In a statement released Wednesday to POLITICO in response to the leaked letter, Nicholson said his call to arms "stated the obvious; there are those of us in the coal industry who are clearly concerned about the attack on the coal industry, and by extension, the jobs of each and every one of those workers, directly and indirectly, employed by the coal industry."

"The Obama Administration, through the EPA, and the Congress controlled by Nancy Pelosi and Harry Reid, are taking steps that seek ultimately to eliminate coal production and its use. We believe that these goals are disastrous for Kentucky and West Virginia, and would constitute an egregious national energy policy that would make us more, not less, dependent on foreign governments," he added.

Among the political targets identified by Nicholson are Rep. Ben Chandler (D-Ky.) and Rep. Nick Rahall (D-W.Va.), neither of whom is now counted among their party’s most vulnerable incumbents.

Chandler is drawing the ire of the industry because he voted for the House energy bill, which included a cap-and-trade carbon reduction program that the coal sector opposed.

Rahall, whose district is situated in the heart of coal country, is under fire for not objecting to a slowdown in mine permitting. "The EPA’s interference in the states’ administration of mine permitting decisions is, in my view, a veiled attempt to strangle the industry and, by extension, the jobs of those who work in the industry," Nicholson charged.

The third potential target is Jack Conway, the Democrat running for the U.S. Senate in Kentucky. His support for natural gas, a coal competitor, is believed to have gotten him on the wrong side of the industry.

The level at which coal’s corporate titans are willing to spend is still unclear.

In the 2008 campaign, coal mining political action committees and workers donated nearly $3.5 million to candidates, with about three-quarters of it going to Republicans. But all of those donations had to be drawn from personal accounts and were subject to campaign finance limits intended to dilute the influence of special interests in politics. The cap on donations to candidates from individuals is $2,400 and the limit for PACs is $5,000.

But the January Supreme Court ruling in Citizens United v. Federal Election Commission overturned the law preventing corporations from using their vast, general treasury funds to pay for political activity, and it set no limits on the amount a firm could spend.

Consequently, the contemplated coal coalition could ask each firm to donate an unlimited amount to the effort and it could spend an unlimited amount on its own advertising and other activity. The coal group could not coordinate with candidates and donations to political races would still be limited. The group also would be required to disclose its activity during the campaign cycle.

In a letter to industry executives, Nicholson provided the rough outlines of the new organization.

"A number of coal industry representatives recently have been considering developing a 527 entity with the purpose of attempting to defeat anti-coal incumbents in select races, as well as elect pro-coal candidates running for certain open seats," Nicholson wrote.

"We’re requesting your consideration as to whether your company would be willing to meet to discuss a significant commitment to such an effort," he added.

According to the letter, Nicholson’s colleagues already have had "theoretical discussions" with executives at Massey Energy, Alliance Resource Partners and Natural Resource Partners and that they are anxious to develop an "action plan."

Massey Energy owns the Upper Big Branch mine where 29 miners were killed this spring and Nicholson’s firm owns the Sago mine where 12 miners died in 2006. ,

But Nicholson denied that disputes over mine safety legislation are not "a key driver of this potential initiative."

Sarah Kliff contributed to this story.