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Welcome back to The Best & The Brightest, and happy debate night, if you celebrate!
The remaining non-Trump candidates are all gathering at the University of Alabama in Tuscaloosa, and I can’t help but wonder how this Nick Saban-worshiping audience will react to Ron DeSantis’s recent decision to disrespect the Crimson Tide. (For context: He just submitted a $1 million line item in the Florida budget to allow Florida State University to sue the College Football Playoff over its controversial decision to ice out the undefeated ’Noles in favor of 13-1 Alabama.) Personally, I think how he handles their reaction will be a true test of character.
In tonight’s edition, Teddy Schleifer has an update on the Republican money race, as the party’s biggest donors reconsider DeSantis and give Nikki Haley a second look. Teddy also gets into the turmoil at Never Back Down, the pro-DeSantis, Axiom Strategies-powered super PAC that appears to be imploding in real time.
A quick note on this: In just the last week or so, C.E.O. Chris Jankowski left, his replacement Kristin Davison was fired, and top officials Erin Perrine and Matt Palmisano were also let go. Davison and Perrine had both worked with the PAC’s chief strategist, Jeff Roe, at his Axiom Strategies, raising questions about whether the executive shake-up was really an Axiom purge. But according to my own reporting, the Axiom wiring running through the soft-money outside groups isn’t easily ripped out: While DeSantis allies recently launched a second super PAC, Fight Right, ostensibly to place attack ads on DeSantis rivals without generating as much backlash for the official campaign, F.C.C. filings show that Fight Right is still placing its Iowa ads with the help of… Ax Media, the media-buying arm of Axiom. Roe’s own fate at Never Back Down may be unclear, but his imprint is everywhere.
More on all that, below the fold. But first: a few words from Abby Livingston and myself on the McCarthy resignation fallout on the Hill…
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The Fall of the House of McCarthy |
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Former speaker Kevin McCarthy, an institution within the House G.O.P. for more than 15 years, announced today that he will resign at the end of the year, leaving behind a mess for his successor, Mike Johnson:
- Fundraising will get harder: McCarthy was an unparalleled fundraiser and will leave Congress with just under $15 million combined in his campaign account and his leadership PAC. Republicans have been quick to tout Johnson’s powerhouse fundraising in recent weeks. But much of this was likely low-hanging fruit—previously maxed-out donors had a fresh speaker to whom they could direct their money. Still, if this transition is like other recent leadership handoffs dating back to John Boehner passing the gavel to Paul Ryan, the party infrastructure—fundraising consultants, donors, and supportive lobbyists—is already smoothly coalescing around Johnson.
Where McCarthy’s absence will really hurt a vast majority of House Republicans is in his personality. In recent history, McCarthy rivals perhaps only Nancy Pelosi and Rahm Emanuel as a political animal. More than any of his other leadership contemporaries, McCarthy mentored and recruited candidates, traveled the country for fundraisers, donor retreats, and to campaign with colleagues. That political metabolism is unlikely to be replicated by anyone in the current leadership structure.
- The party will shift further right: The McCarthy exit, even after his ouster, is a major inflection point for a conference that has been in tumult since Donald Trump’s election. Yes, it’s completely normal—even a tradition—for an ousted leader to resign from congress after they fall from power. (Nancy Pelosi is the exception to this informal rule.) But these are not normal times. McCarthy was the last of the House leaders who came to power after the 2010 midterms. Despite his obeisance to Trump and the far right, he was the last vestige of pre-Trump Republicanism, at least in style and presentation. He survived because he enabled Trump’s worst behavior, but he also still cared about basic aspects of governing—like passing a spending bill.
- Johnson will feel the squeeze: The new speaker has a diminishing margin that could shrink to a one-vote majority if more expected resignations come to pass in the new year. This will put pressure on members to attend every single vote. When a party has a healthy majority, it’s routine for members to miss votes on bills since there’s no chance they’ll have to be a tie-breaker. It’s not a great look as a habit, but members have been known to skip a vote here or there for a family commitment, a national talk show appearance, an illness, or just a bad Capitol Hill traffic jam. With projections indicating McCarthy’s seat could remain open well into the summer, there’s no room for error now. —Abby Livingston
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A little more on this…
After the recent Republican double-whammy of George Santos’s expulsion and McCarthy’s surprising rushed exit, Johnson faces a truly hellacious reality: Until a replacement comes in from McCarthy’s district, which could take months, it is virtually impossible for him to pass a budget without Democratic support. But neither budgets nor reality matter much to the small band of hardliners who are hoping to seize this opportunity to push their agenda. From what I’ve heard, there are probably between eight and 12 or so members of Congress who are ready to double down on their demands—cutting aid to Ukraine, fortifying the border, de-wokening the Pentagon, gutting the I.R.S., etcetera—now that their leverage has increased. “These guys are from hard R seats and are not in leadership; they don’t care about control of the House,” a Republican source close to the Freedom Caucus told me.
So far, the members I’ve been told to keep an eye on in the coming budget fight are Josh Brecheen, Michael Cloud, Dan Bishop, Chip Roy, Lauren Boebert, Matt Gaetz, Andy Clyde, and Eli Crane. All of them initially voted against McCarthy’s speakership back in January, holding out in exchange for budgetary and power-sharing concessions, and are most likely to use this moment as a chance to take an ideological stand. (Crane and Gaetz, it should be noted, are purely anti-establishment by disposition, having voted to oust McCarthy back in October. Bishop, as well, has nothing to lose at the moment, having already announced he is leaving Congress at the end of this term.)
It’s probably too early to tell whether this bloc will unify, or whether they’ll continue to splinter into subgroups of subgroups, but it probably doesn’t matter. With the G.O.P. majority at 220-213 come January, and a special election to replace McCarthy scheduled at the discretion of Democratic California governor Gavin Newsom—and why would he want to help bail out the G.O.P. House?—it will literally take three members to tank whatever proposal leadership puts forward, for whatever reason they’d like.
And yet: though everyone I talk to in official Washington is so, so tired of this shit, and a wave of Republican members are set to retire by the end of this term, there’s still hope that the party could survive the dysfunction come Election Day. “Many believe with Biden’s low numbers that the G.O.P. could rally and keep the House,” a lobbyist with ties to the Freedom Caucus told me. “There is a major enthusiasm gap, especially with aging young voters on the Biden side of the equation, and that’s why Trump is polling as high as he is.” Perhaps this is wishful thinking fueled by the conservative media echo chamber. But with the G.O.P. presidential primary as lopsided as it is, and the polling between Trump and Biden neck-and-neck, perhaps the down-ballot effects could give moderate Republicans a boost.
And now, here’s Teddy on the DeSantis donors’ ennui…
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The DeSantis Megadonor Panic Room |
As his operation falls further into disarray, everyone is pissed at everyone else, and the money guys behind the scenes are having to make tough calls. Plus: a scoop on WhatsApp co-founder Jan Koum’s $5 million investment in Haley. |
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Last May, upon the swaggering debut of the DeSantis presidential campaign, I flew down to Miami to stake out the Four Seasons, where some 150 eager and ego-filled bundlers bounded about—barking into phones, cavorting in the hotel bar, rifling through their iPhone contacts—in the hopes of raising ungodly sums of money to dethrone Donald Trump in Iowa and beyond. The bundlers, holed up in a luxury hotel equivalent of a bomb shelter to participate in the “Ron-o-Rama,” wielded clipboards and wore campaign pins, proudly indicating their membership on the team since “Day One.” The campaign raised a record $8.2 million in its first 24 hours.
I’ve kept in touch with these bundlers, and at least a few of them haven’t done much dialing for their guy in the 194 days since “Day One”—especially not now, with DeSantis languishing in the polls and only six weeks until Iowa. I know at least one person who attended the Miami phone-a-thon who has effectively switched sides and is now steering his network toward a different candidate. Bundling, after all, is laborious work: It relies on enthusiasm, and it’s clear that enthusiasm for DeSantis—outside of his Yale homies and Florida lobbyists—has waned. “I think people are starting to pull back,” said one DeSantis bundler who has de-escalated his involvement. “I don’t see a finish line here.”
There are multiple causes and culprits, to be sure. At present, most DeSantis allies are fixated on the drama that has ensnared the outside groups—the so-called soft-money world—including the launch of a rival super PAC, near-physical fights, and most recently, a wave of resignations from the original DeSantis super PAC, Never Back Down. Among the exits was Never Back Down C.E.O. Chris Jankowski, who stepped down just before Thanksgiving with a public jab about disagreements that went “well beyond strategic differences.” Then, over the weekend, replacement C.E.O. Kristin Davison was also sent packing for unspecified “management and personnel issues,” alongside Erin Perrine and Matthew Palmisano, in what one campaign-aligned person rather gleefully described to me as a “housecleaning.”
Perhaps the most concerning exit, however, was that of Adam Laxalt, DeSantis’s close friend and former roommate, who officially left to spend more time with his family but whose departure is being read by some donors as indicative of cratering internal confidence in the group. Now, Scott Wagner, one of DeSantis’s Yale-Florida homies and a political neophyte, is at the controls and has to work with Never Back Down’s chief strategist Jeff Roe… the guy whom he almost fought.
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A MESSAGE FROM INSTAGRAM
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Parents should be able to decide which apps are right for their teens.
Apps can teach teens skills or ignite their creativity. But with access to so many apps, parents should have a say in which ones their teens download.
That’s why Instagram wants to work with Congress to require parental approval wherever teens under 16 download apps.
Learn more.
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Rather than print a dozen pissy blind quotes—although my notebook is full of ’em—let’s just say there is some serious blame-gaming among DeSantis campaign donors toward Roe, and also toward the PAC itself. There is also widespread anxiety about the structure of the broader DeSantis campaign, which essentially outsourced many of its most vital operations—travel, events, door-knocks, etcetera—to an outside group in the early months of the primary.
And let’s not forget that the campaign’s weaknesses were in some ways disguised, or papered over, by the fact that DeSantis was able to transfer some $90 million from his state account to Never Back Down at the beginning of the race, creating an artificial—and arguably misleading—advantage. (As a Ted Cruz 2016 embed, it isn’t lost on me that these are precisely the sort of multi-super PAC tensions that somewhat undermined Roe’s former presidential campaign efforts, too.)
Anyway, all that may be less important than the fact that bundlers—for whom raising money is a sort of professional sport, with leaderboards and awards—like winning. And at present, the DeSantis team is down some 30 points in Iowa, nearly 40 points in New Hampshire, and trailing by even more in DeSantis’s home state of Florida. Like a sports team, a bunker-like mentality can persist: A few DeSantis bundlers told me they didn’t believe those polls: “There’s no way [Trump’s] ahead 50 points. Nobody’s ahead 50 points. Mother Teresa’s not ahead 50 points,” said one.
But it’s also probable that DeSantis’s campaign-finance obituary is being written a bit prematurely, especially if he can place a close second or even beat Trump in Iowa, which is the sort of narrative violation that DeSantis’s team thinks would radically reset the race. I’ve learned that Jay Bergman, a Chicago-area oil baron who has donated millions to Republicans, recently flipped his support from Mike Pence to DeSantis. The two had a private meeting a few weeks ago, and he has been sufficiently impressed to volunteer for his Illinois delegate slate and to start planning contributions. “He’s a little bit more conservative than I am, but that’s beside the point,” Bergman told me. “I can’t say this guy is the most wonderful thing in the world. But he seems to have the background for it. So I think he’d be a good president.”
And there are plenty of megadonors who are still on the DeSantis train. Elsewhere in the Upper Midwest, Wisconsin’s Dick and Liz Uihlein remain committed DeSantis folks, I’m told by multiple sources, and they met with DeSantis and Never Back Down at their company headquarters on the same trip as DeSantis’s visit with Bergman. One of those sources told me that both Uihleins see DeSantis as a long-term bet—a “young man”—and that he could be a viable candidate in future national elections.
Still, there are not many new DeSantis megadonors these days. So I asked Bergman: Was he not concerned about the trajectory of the DeSantis campaign? “I’m somewhat concerned about it,” he offered. “DeSantis, I think, peaked too soon. He turned out to be the number two early on, and of course Trump and everybody else down the line attacked him because he was number two.” Nikki Haley, he conceded, clearly has the momentum.
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The next shoe to drop may be what happens with the members of the American Opportunity Alliance, whose ultra-wealthy membership has yet to fully engage in the presidential race. Some of them are feeling the Haleymentum—“Unfortunately for us, there is a mass movement toward Haley with all the billionaires,” one DeSantis donor told me this week—but not all of them are moving toward her, and several Opportunity Alliance members have argued privately that Haley’s path to victory remains much narrower than DeSantis’s. In short, there’s still an Iowa-sized shot.
On Wall Street, “everyone is waiting for the signal” from one American Opportunity Alliance honcho in particular: Paul Singer, the multi-billionaire hedge fund manager and Republican megadonor. Singer, to some people’s disappointment, did not attend what I hear was a packed Haley fundraiser on Monday in New York City, despite being hosted by several people tied to Singer, including his longtime girlfriend Terry Kassel (though she skipped it too, I hear). The hope is that Singer will step in over the next few weeks and bring his forceful donor-whipping operation to bear. Singer has said nice things about Haley, but hasn’t formally weighed in, or even confirmed that he’ll endorse anyone. We’re also still waiting on Ken Griffin, who many people expect to back Haley, too. But he can be mercurial, and it hasn’t happened until it happens.
Meanwhile, in Silicon Valley, the Haley conversation continues to revolve around Jan Koum, the WhatsApp co-founder (net worth: $15 billion) who has publicly donated $5 million in two chunks to the super PAC behind her. Koum—an ardent pro-Israel philanthropist who is attracted to Haley’s hawkishness—has worked in the past with Haley adviser Jon Lerner, and I hear he’s been making introductions for Haley to various other pro-Israel donors. In fact, I’ve learned that Koum donated another $5 million in August to the Haley super PAC—meaning that he has actually donated a total of $10 million to the outside group, making him one of the single largest donors to date in the G.O.P. primary.
Still, plenty of the people donating six or seven figures to Haley or DeSantis at this point don’t reasonably expect their candidate to win, a phenomenon I’ve never experienced before. The dominant feeling among major donors is a sense of apathy—that this is Trump’s race to lose, to say the least. Among others, there’s a sense of fear. “Trump’s big talk of retribution has got a lot of people thinking, ‘Look, the guy’s ahead by 30 points. There’s probably not a whole lot we can do. How much do I want to be in the crossfire at the end?’ And so we might not have as many people publicly going at him as you might hope,” said one person in touch with several major anti-Trump donors. “If Trump runs away with this, they’ll all come in. And there will be lots of apology money … and if our folks come in with some big checks, a lot will be forgiven.”
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FOUR STORIES WE’RE TALKING ABOUT |
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