Wall Street, Washington Part of Debate in Today's Indiana Senate Primary

Ties to Washington and Wall Street loom as liabilities for most U.S. politicians these days. Dan Coats has both, and today’s Indiana primary offers a test of how toxic such links have become.

Coats, 66, a former U.S. senator running again for a seat in the chamber, has been under assault for working for a lobbying firm that has represented Bank of America Corp., along with Google Inc., Lockheed Martin Corp. and other interests.

Four fellow Republicans in the primary have argued that voters seeking change should recoil from nominating Coats for the seat being vacated by Senator Evan Bayh, a Democrat. Even if Coats wins -- he leads in the polls -- Democrats believe he will emerge battered and plan to recycle the attacks on him.

“He sold out Indiana and left 10 years ago and never came back, so he’s going to have some problems explaining a lot of that stuff in a general election,” said Dan Parker, chairman of the Indiana Democratic Party. “His votes and his record as a lobbyist are a huge problem if he becomes the nominee.”

Besides Indiana, primaries are being held today in North Carolina and Ohio, to be followed later in May by seven contests that will collectively begin to define what November’s ballots will look like. States with Senate primaries on May 18 include Arkansas and Pennsylvania, where Democratic incumbents Blanche Lincoln and Arlen Specter face challenges.

Democratic Contender

The Republican winner in Indiana likely will take on Democrat Brad Ellsworth, 51, who represents a U.S. House district that has been one of the nation’s most politically competitive. State Democratic leaders are expected to designate Ellsworth as the party’s Senate nominee later this month.

Coats led in a poll conducted April 22-26 of likely Republican primary voters, though with support from barely more than a third on those interviewed. He had 36 percent; John Hostettler, a former House member, placed second with 24 percent, followed by state senator Marlin Stutzman at 18 percent.

The poll by Survey USA for the Mike Downs Center for Indiana Politics at Indiana University-Purdue University Fort Wayne had an error margin of plus-or-minus 5 percentage points.

Hostettler, who lost his House seat in 2006 to Ellsworth, offers himself as a “reliable conservative,” questioning Coats’s credentials by pointing to the ex-senator’s support for some gun control measures while in office.

DeMint Support

Stutzman has the backing of South Carolina Senator Jim DeMint, a Republican who is funding more conservative candidates within the party. DeMint has described Stutzman as the “conservative outsider” who will take on the “Washington establishment.”

Coats, though, received the biggest share of support in the Survey USA poll -- 30 percent -- among likely Republican primary voters who identify with the Tea Party.

“Despite the anti-Washington persona of much of the Tea Party movement, its Indiana supporters are more supportive of the ‘establishment’ candidate Dan Coats than other candidates,” the center said in its poll analysis.

Coats was elected to the U.S. House in 1980 and appointed to the Senate in 1989 to replace Republican Dan Quayle, who had become vice president. Coats won his own term in 1992; six years later he declined to seek re-election.

Carpetbagger

Democrats are gearing up to paint Coats as a carpetbagger because he has lived in Virginia since 2005, after serving four years as ambassador to Germany for then-President George W. Bush.

“I know how Washington works, and I know how Washington doesn’t work,” Coats said in an interview yesterday. “Right now, Washington doesn’t work and I want to go there to make it work.”

Coats called the attacks against him and his lobbying work “false, totally misleading and factually wrong.”

He released a financial disclosure report last week that showed $603,609 in salary during 2009 and the first two months of 2010 from the Washington office of King & Spalding LLP.

In 2008, Barack Obama became the first Democratic presidential candidate to carry Indiana in 44 years. The race to replace Bayh, though, is rated as leaning toward a Republican win in November by the nonpartisan Cook Political Report in Washington.

The Survey USA poll showed Coats winning a hypothetical match-up with Ellsworth, 47 percent to 31 percent.

Ellsworth declined an interview request.

Senate Majority

The race will help determine whether Democrats maintain their Senate majority and, if so, by what margin. The party controls the chamber 59-41.

The primary is being held as Indiana’s economy continues to struggle. The state’s unemployment rate was 9.9 percent in March, above the national rate of 9.7 percent.

Coats greeted diners yesterday at Flap-Jack’s Restaurant in Avon, Indiana.

“Glad to see you’re running again,” said Joyce Lowry, a therapist who lives in the town.

Lowry and her husband, Jim, said they plan to vote for Coats, and aren’t bothered by his lobbyist work.

“I don’t see it being a problem this fall, particularly since he will be running against a guy who voted for the health- care bill,” Jim Lowry said, referring to Ellsworth’s backing of the measure Congress enacted in March.

To contact the reporter on this story: John McCormick in Indianapolis at jmccormick16@bloomberg.net

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