Fate of Indiana Senate Seat Resides With Lugar Loyalists

For 36 years, Jim Rice was a loyal supporter of Richard Lugar, the six-term Republican senator from Indiana with a reputation for compromise and stature in Washington. Now, Rice says he will vote for a Democrat.

A 60-year-old civil engineer, Rice is put off by the campaign of Richard Mourdock, a Tea Party favorite who defeated Lugar in a Republican primary with an anti-tax, anti-Washington message.

The race for the open seat between Mourdock, the state treasurer, and Democratic Representative Joe Donnelly will probably pivot on which candidate can win over the kind of voters who cast ballots for Lugar regardless of party affiliation, with control of the U.S. Senate at stake.

“Politics have taken a nasty turn,” said Rice, who lives in the Indianapolis suburb of Carmel in vote-rich Hamilton County, which ranks among the three-dozen wealthiest counties in the U.S. “I will vote for Donnelly just in terms of what Mourdock did.”

Mourdock, 61, and his supporters say the attacks on Lugar during the primary came primarily from outside spending groups he doesn’t control.

Lugar, 80, hasn’t publicly supported Mourdock and a spokesman reiterated that the senator has no plans to campaign for him. “During the primary, Mourdock and his supporters perpetuated misleading statements about Senator Lugar,” said spokesman Andy Fisher.

Photographer: Jay Mallin/Bloomberg

Indiana Senator Richard Lugar leaves the U.S. Senate chambers in Washington, D.C., in this June 26, 2007 file photo. Close

Indiana Senator Richard Lugar leaves the U.S. Senate chambers in Washington, D.C., in... Read More

Close
Open
Photographer: Jay Mallin/Bloomberg

Indiana Senator Richard Lugar leaves the U.S. Senate chambers in Washington, D.C., in this June 26, 2007 file photo.

While the race probably will be decided by voters in prosperous suburbs such as Carmel and nearby Fishers, it was the economically depressed pockets of Indiana that gave life to Mourdock’s challenge to Lugar.

Manufacturing Towns

The aging manufacturing towns that have lost thousands of jobs have hollowed out the economies of places such as Anderson, where General Motors Co. (GM) parts plants once employed as many as 23,000 workers.

The jobless rate in Indiana is 8.3 percent, down from 9.1 percent a year ago, according to the U.S. Bureau of Labor Statistics. The improving jobs picture works in Mourdock’s favor in this state that, with the exception of President Barack Obama, has voted for Republican presidents since 1964.

“The economy has improved and Hoosiers are feeling much better about circumstances,” said Morton Marcus, a former Indiana University business professor. “They’re back to the patterns they voted prior to 2008.”

With plants shuttered and businesses disappearing, the economic anxiety of voters in cities like Anderson heightened amid the downturn that started in 2007, said Indiana Republican Senator Dan Coats. The unemployment rate in Anderson stood at 9.5 percent in August, according to the BLS.

‘Shift of Focus’

“All of a sudden there was a shift of focus from support for long-serving senators who had established themselves” like Lugar, said Coats, who beat two-term Democratic Congressman Brad Ellsworth in 2010. “There was just a lot of open talk about the fact that he doesn’t listen to the concerns over the fiscal and economic plight of the country.”

Republicans like Mick Jacks, a 65-year-old retired Air Force member from Logansport, said Lugar had become part of the problem in Washington. “He just became what we call out here in the boonies, ‘the establishment,’” he said.

The Indiana Senate race, along with those in Massachusetts and Virginia, is among the most closely watched in the U.S. According to data compiled by Kantar Media’s CMAG, it is a top target for outside Republican and Democratic-aligned groups seeking to influence which party gains the Senate majority for the next Congress, with 22,134 ads having aired in the past 90 days.

Can’t-Lose Seat

Republicans must hold all five of their competitive seats and pick up four seats to win control of the Senate next year, and Indiana is one of the seats the party can’t afford to lose to reach that goal.

The outcome may depend on how many Indiana voters join Rice in supporting Donnelly or in skipping over the Senate race on their ballots, said Brian Howey, publisher of Howey Politics Indiana, a political newsletter.

Donnelly, a three-term congressman, touts independence from his party with support for oil drilling, gun rights, and a balanced budget amendment and opposition to abortion.

It has been difficult for Mourdock to unite his party after the divisive primary.

Base ‘Problem’

“Mourdock has a problem with his base,” Howey said. After winning the nomination, Mourdock said “bipartisanship ought to consist of Democrats coming to the Republican point of view.”

Howey considers the race a toss-up -- his latest poll taken Sept. 19-23 shows Donnelly with a 2-point lead, though other surveys give Mourdock an edge.

Mourdock beat Lugar by 20 percentage points in the May primary, in which 75 percent of the state’s Republican Party county chairs had endorsed Mourdock.

“Many of them would not have done that if Richard had been the Tea Party candidate,” Coats said. “He’s an establishment candidate.”

Even so, Mourdock’s bid was powered by the Tea Party wing of the party, including groups such as FreedomWorks and the super-political action committee Club for Growth Action that bankrolled millions of dollars in negative ads against Lugar.

Tea Party Support

He espouses the party’s positions on issues including the national debt. In an interview, Mourdock said would have voted against the 2011 legislation that raised the U.S. debt limit, which was supported by most of the Republican leadership.

Now Mourdock is seeking to broaden his appeal by playing down the Tea Party label.

“We appreciate the help of all of the so-called Tea Party groups that have come forward,” Mourdock said. “I certainly don’t look at myself as just a candidate of one special interest group.”

Outside groups have spent $11.4 million on the race in the general election, with $5.9 million on negative ads against the Democratic candidate and $4.4 million on negative ads against the Republican, according to the Center for Responsive Politics.

Mourdock is bashing Donnelly for supporting Obama’s health- care law, casting the Democrat as fiscally irresponsible and trying to tie him to the president and Democratic congressional leaders Harry Reid and Nancy Pelosi.

‘Extreme Makeover’

Donnelly is using footage of the treasurer’s previous comments scorning bipartisanship and his ties to the Tea Party, trying to repel Lugar voters and independents.

“This is the extreme makeover Richard Mourdock edition,” Donnelly said in an interview. “We are not a state that sends bomb-throwers to the U.S. Senate.”

Indiana Lieutenant Governor Becky Skillman, a Republican, said Mourdock will be able to live down some early gaffes.

“Richard made some comments the morning after capturing the nomination in the heat of the moment and the adrenaline was still flowing and probably it could have been phrased a little bit better,” she said.

Donnelly also is emphasizing a controversy over Mourdock’s role in a 2009 lawsuit seeking to stop Chrysler Group LLC’s government-supported bankruptcy in a state where manufacturing employment dropped 26 percent from its peak in 1973 to 2007, according to a July 2010 report by Ball State University. The losses came primarily in counties including Lake, Marion and Madison that had employed 237,211 workers in industries including machinery, electronics and appliances.

Pension Funds

Teachers’ and firefighters’ pension funds that Mourdock invested as state treasurer lost millions buying up Chrysler’s secured debt. Mourdock argues that he was trying to force Chrysler’s liquidation to get the money back for the pension funds. Donnelly maintains that if Mourdock’s suit had succeeded, it would have cost more than 120,000 jobs in Indiana and that Mourdock was offered a settlement and refused it.

“This made him a Tea Party star,” Donnelly said. “This gave him the vehicle to go after Richard Lugar.”

In the end, Donnelly probably can’t win the Senate seat if Obama loses the state to Mitt Romney by more than 10 percentage points because of the tendency of many voters to vote along party lines, said Evan Bayh, the former Democratic senator who won re-election in the state in 2004 as Republican George W. Bush won his second term.

“It depends on the magnitude of the president’s margin,” Bayh said. “When it gets into double digits, it’s just a bigger burden to carry.”

To contact the reporter on this story: Heidi Przybyla in Washington at hprzybyla@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.