Cantor Cash With Koch Money Boosts Scalise for House Whip

Photographer: Bill Clark/CQ Roll Call

Rep. Steve Scalise, R-La., leaves the House Republican Conference meeting in the basement of the Capitol on June 18, 2014. Close

Rep. Steve Scalise, R-La., leaves the House Republican Conference meeting in the... Read More

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Photographer: Bill Clark/CQ Roll Call

Rep. Steve Scalise, R-La., leaves the House Republican Conference meeting in the basement of the Capitol on June 18, 2014.

U.S. Representative Steve Scalise is positioning himself as a compromise candidate for the House’s No. 3 leadership post as the Republican Party struggles over its direction.

The Louisiana lawmaker has a history of working both with business-aligned members and their antagonists within the party -- those with ties to the Tea Party. He’s counting on such relationships to help him win the majority whip position in tomorrow’s leadership election.

Scalise’s top donors include those financing the movement that seeks to limit the federal government’s role and House Majority Leader Eric Cantor of Virginia, who was defeated by a Tea Party-backed candidate in a primary June 10.

Scalise voted against a spending deal crafted by House Budget Chairman Paul Ryan, favoring one with deeper cuts. Yet he worked against groups aligned with the Tea Party by helping House leaders limit the cost of flood insurance premiums with a measure that protected homeowners in his coastal district.

“I’ve worked hard to bring conservative policy to the floor in a way that unites our conference,” Scalise told reporters yesterday, adding that he’s been able to “bridge some of the divides that we’ve seen over the years.”

Tricky Navigation

As Cantor’s loss showed, it can be dangerous to navigate between the party’s Republican business allies and a Tea Party movement that punishes any deviation from its goal of curtailing the government’s reach. If House leaders can’t find a way to satisfy members of that branch of the party, their frustration risks deepening divisions and depressing turnout in November’s midterm election.

Scalise, 48, is seen as a slight favorite in a competitive three-man race for the House of Representatives’ majority whip. That’s largely because he’s not a member of the current leadership team like fellow whip candidate Peter Roskam of Illinois, and isn’t as closely aligned with the Tea Party, like Marlin Stutzman of Indiana, who is also seeking the job.

That election will take place tomorrow if the current whip, Kevin McCarthy of California, wins the contest to replace Cantor as majority leader that day. Idaho’s Raul Labrador is also running for majority leader.

The secret-ballot vote among the 233 House Republicans will be held behind closed doors.

‘Move Forward’

“The internal issue is who do you trust to pull your party together and move forward,” former Republican House Speaker Dennis Hastert said in a phone interview.

Tea Party-aligned lawmakers complain that they don’t have anyone in leadership from a state that has consistently voted for Republican presidential candidates.

Having one of their members on Speaker John Boehner’s team also may provide the Ohio Republican with an early-warning system to stem the next uprising. Last October, Tea Party efforts to defund the 2010 health-care law led to a 16-day partial U.S. government shutdown.

Stutzman, 37, is the whip candidate most closely aligned with the Tea Party.

Roskam, 52, is currently the chief deputy whip. If he moves up to the whip job, Boehner’s leadership team would be little changed.

That would probably increase pressure on Boehner and his deputies for another shakeup in the leadership vote following the November election. Two Boehner allies, Republican Conference Chairwoman Cathy McMorris Rodgers and Representative Patrick McHenry, are backing Scalise.

‘Scream About’

Scalise is also the only one of the three from a state that voted for Republican Mitt Romney for president in 2012. “As somebody from a red state, I think it’s important that we balance leadership,” McHenry of North Carolina told reporters.

“If the Tea Party gets shut out, it gives people more to scream about,” said former Representative Tom Davis, a Virginia Republican, who oversaw the party’s House races from 1998 to 2002. “Do you really want that as a party? Their members are going to be harder to deliver under those circumstances.”

Scalise won his first political election to the Louisiana statehouse 19 years ago. He’s collected $424,600 in campaign donations from oil and gas, more than any other industry, according to data compiled by Washington-based Center for Responsive Politics.

Energy Producers

Other Louisiana lawmakers have received more from the industry. Still, Scalise would bring relationships with energy producers into Republican leadership.

His New Orleans-area district is home to the headquarters of Entergy Corp., the second-largest owner of nuclear plants in the U.S. The district also includes Chalmette Refining LLC, a refinery operated by Exxon Mobil Corp. with estimated annual revenue of $5.6 billion, according to data compiled by Bloomberg.

Many of his constituents work at the nearby Ports of Southern Louisiana and New Orleans, two of the five largest U.S. water ports, or in energy production.

Scalise has led fellow House Republicans on helicopter tours to oil rigs several miles off his coastal district. He has pushed for increased oil and gas drilling in the Gulf of Mexico, and for Louisiana to get a bigger cut of the government’s money that comes from it.

Scalise’s political contributions show the middle ground he occupies between Republican leadership and the Tea Party.

Koch Brothers

He’s received $32,500 from Koch Industries, run by David and Charles Koch, financiers of the small-government movement.

Scalise has also received $50,000 from Cantor’s political action committee, known as the Every Republican Is Crucial PAC.

Since winning election to Congress in 2008, Scalise has risen to become chairman of the Republican Study Committee, a group of lawmakers pushing for small-government policies.

He’s also voted against House leadership positions. Scalise opposed a spending deal crafted by Ryan of Wisconsin, instead backing a plan that would have cut an additional $64 billion.

Scalise has pushed leaders for an up-or-down vote on an alternative to the Obamacare health-care law, which House Republicans have voted more than 50 times to repeal, roll back or defund since taking control of the House in 2011. They haven’t held a vote on a replacement.

Always ‘Against’

“Steve will push that we actually vote on things we’re for, instead of always being against things,” Representative Vicky Hartzler, a Missouri Republican aligned with the Tea Party and backing Scalise, said in an interview.

Scalise’s willingness to make a deal was illustrated when he crossed the Tea Party in February, persuading Republicans to support a flood insurance bill that rolled back a 2012 law requiring premiums to rise to market rates. The bill preserved federal subsidies, which helped home builders and waterfront homeowners, including those along the Louisiana bayou.

Financial Services Chairman Jeb Hensarling opposed the measure, calling it a “misguided” effort. It was opposed by Heritage Action and the Club for Growth, two groups aligned with the Tea Party movement.

Scalise pitched the bill as one that would avert another housing crash, guiding the legislation to passage.

His rating from the Club for Growth has dropped, too. Scalise voted with the group 94 percent of the time in his first three years in office, an average that dipped to 85 percent over the past three years.

Stutzman’s average was 93 percent for the past three years. It may not help him because the Club for Growth hasn’t gotten involved in the leadership contests.

To contact the reporters on this story: Michael C. Bender in Washington at mbender10@bloomberg.net; Derek Wallbank in Washington at dwallbank@bloomberg.net

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

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