Probe reveals 'outsized' influence of out-of-state gubernatorial donations

The political fortune of his Democratic nemesis, gubernatorial challenger John Gregg, also has been fed by out-of-state interests, with more than $1 out of every $4 given by donors with non-Hoosier addresses.

A national campaign finance think-tank expert and at least two Indiana political experts conclude it's all part of a growing trend in which national political lines extend into states and vise versa.

But the trend of out-of-state interests with monetary skin in the state-level political game appears to be heightened in Indiana.

Out of 47 nationwide gubernatorial candidates in the most recent election cycles, Pence ranked seventh highest in percentage of out-of-state campaign contributions, an analysis by the National Institute on Money in State Politics concluded.

Gregg ranked ninth highest, according to the same study.

On paper, neither the size of the opposing Indiana gubernatorial candidates' campaign funds nor their top contributors appear to have much in common.

Among the top contributions to Pence's $19.8 million campaign fund between 2011 and 2014 were a $1.1 million infusion from a national conservative political action committee and $200,000 from one of the Koch brothers, the politically charged family operating a massive oil and gas empire, The Times probe shows.

Gregg's campaign war chest, though much smaller at $6.6 million over the same four years, enjoyed nearly half a million dollars in support from an equivalent national Democratic political action committee and hundreds of thousands of dollars from labor unions.

But what seem to be polar opposites on the campaign finance spectrum have one important characteristic in common: disproportionately large out-of-state funding compared to gubernatorial candidates in most other states.

Out-of-state funds

Nearly 30 percent, or $5.6 million, of Pence's overall war chest came from campaign contributors with out-of-state addresses, The Times analysis shows.

By comparison, the median out-of-state funding amount for gubernatorial candidates nationwide is about 11 percent, according to the National Institute on Money in State Politics.

Among the top single contributors to Pence's campaign in the past four years were:

• The Republican Governor's Association, a national PAC that injected $1.1 million into Pence's campaign.

• The late Houston home builder Bob Perry and his wife, Doylene, who together gave $220,000 to the Pence fund over four years. Perry, who died in 2013, also made large donations to the Swift Vets and POWs for Truth, private veterans groups formed to oppose Democratic presidential candidate John Kerry's unsuccessful 2004 run for the White House.

• Billionaire Koch Industries executive David H. Koch, of New York, who contributed $200,000 over four years.

• Retired Oregon oil tycoon John D. Bryan, who gave $120,000 to Pence's fund.

On the Democratic side of the Hoosier gubernatorial race, Gregg garnered nearly 27 percent, or $1.8 million, of his war chest from out-of-state sources, The Times probe shows.

Gregg saw some of his greatest support from labor unions with non-Hoosier addresses — but which represent Indiana's unionized workforce.

Among Gregg's top contributors between 2011 and 2014 were the following:

• Various political action committees affiliated with the Laborers International union, which together gave $510,300 to the Gregg campaign.

• The Washington, D.C.-based Democratic Governors Association, which gave $484,164.79 to Gregg over four years.

• The Springfield, Ill.-based Midwest Region Laborers' Political League, which donated at least $300,000 to Gregg.

• A D.C.-based legislative committee of the United Brotherhood of Carpenters, which contributed at least $125,000.

• Illinois and D.C.-based PACs of the International Union of Operating Engineers, which gave Gregg at least $157,500 over four years.

Fueling the fire

The glut of out-of-state money flowing to candidates for Indiana's chief executive office are due to a few key factors, said Pete Quist, researcher for Montana-based National Institute on Money in State Politics.

The first is that state-level policy-making has become a national business, Quist said.

On the GOP side, out-of-state companies peddle influence with campaign contributions because they either already do business in the Hoosier state — or seek to do more of it, he said.

On the Democratic side, labor unions infused millions of dollars into state politics, particularly in battleground states such as Indiana, which has passed anti-union legislation in recent years, Quist said.

And both Pence and Gregg enjoyed heavy funding from their respective national governors associations because of the closeness of the race, he said.

The 2012 gubernatorial race went down to the wire, with Pence winning 49.5 percent of the vote to Gregg's 46.5 percent.

The D.C.-based Republican Governors Association and the Democratic Governors Association likely picked up on that and tried to tip the scales with cash, Quist said.

"This can be exacerbated in cases where a state is a battleground for a national issue, such as the Indiana fight over unions," he said.

Indiana political analyst Brian Howey concurred, noting Indiana's right to work legislation and the recent repeal of a common construction wage, both of which have fanned union passions.

"The unions have really taken it on the chin over the past half decade or so," Howey said. "They're really investing in John Gregg."

'Outsized' influence?

But Howey, of Howey Politics Indiana, said Pence has enjoyed a leg up in past war chest funding from out-of-state sources.

Pence spent 12 years as an Indiana congressman and was exploring a possible run for president at one point, Howey said, boosting his chances for non-Hoosier contributions.

"I might have thought it would have been bigger than 30 percent for Pence," Howey said of The Times analysis of the governor's out-of-state funding.

Pence campaign spokesman Robert Vane argued the out-of-state funding is a testament to the diverse support enjoyed by his candidate.

"The Koch brothers, for example, are actually closer to full-on Libertarian in their political beliefs," Vane said. "It takes all of that support to be successful."

Indiana University Northwest political science Professor Marie Eisenstein said she wasn't surprised by Pence's high percentage of out-of-state funding.

"It's not atypical for state politicians to receive a high percentage of money from out-of-state donors," Eisenstein said. "Businesses and other entities from out of state still have in-state interests.

"The Koch brothers, for instance, clearly have a political agenda. But I'm not so sure it's any different from others who use money to advance their political objectives. They want to help their team."

Eisenstein did acknowledge, however, that many out-of-state contributors appear to have "outsized" monetary influence in Indiana politics.

It all comes down to the difficulty in balancing major campaign donors' freedom of speech — by way of financial support of candidates — with the desire to keep their heavy political influence in check, she said.

"It is a problem, but the cure might be potentially worse than the disease," Eisenstein said. "It's the messiness of democracy."