(Bloomberg) — Months after House Financial Services Committee Chairman Barney Frank muscled an overhaul of Wall Street rules through Congress, he is showing signs of weakness in a Massachusetts re-election bid he says is his toughest ever. Frank this week loaned his campaign $200,000 for television ads to counter any last-minute infusion of outside-group cash to help his Republican opponent, Marine reservist and businessman Sean Bielat. The Tea Party Express appealed to donors Oct. 20 to help defeat Frank, whom the political action committee called "one of the worst liberals in Congress."
"When I want to fight, I fight," Frank said in an interview yesterday. "When people lie about you and distort things, if you don't answer, it can be damaging." The nonpartisan Cook Political Report rates Frank a likely winner. Still, he is being depicted as a poster child for the nation's economic woes and risks getting pulled into an anti- Democratic wave, said Paul Watanabe, a political scientist at the University of Massachusetts in Boston. Bielat had $365,000 to spend this month against Frank, who faced little or no opposition in some prior elections. "There's no question that Barney Frank is facing a significant challenge with the best-funded opponent he's ever had," Watanabe said.
Frank said at least three groups that support Tea Party- backed candidates have said they want to spend money on ads and mailings to defeat him. He said he is confident he will win though the race is more challenging than the others he has faced since he was first elected in 1980.
Relinquishing the Gavel?
Asked whether he sees Democrats keeping control of the House, allowing him to remain Financial Services Committee chairman, he declined to say. Republicans need a net gain of 39 seats to win a majority. "Don't ask people when you're not going to get an honest answer," said Frank, who is known for a caustic wit and impatient manner.
"Why would you do that?" Frank has been chairman of the panel since Democrats took over the House in January 2007. The following year he helped negotiate the $700 billion bank bailout as well as legislation to protect 400,000 homeowners from foreclosure and keep mortgage giants Fannie Mae and Freddie Mac from collapsing. He was the lead author of an overhaul of Wall Street regulation approved in July. It created a consumer protection bureau at the Federal Reserve, a council of regulators to guard against risk to the system and a mechanism to liquidate large failing firms.
Representing a heavily Democratic district that stretches from the Boston suburbs south through the city of New Bedford, Frank won his 2008 race with 68 percent of the vote against a Republican rival who raised just $40,000. In 2006 no one ran against him. In this campaign, Bielat raised $644,000 by Sept. 30 and had $365,000 left to spend in the last month before the Nov. 2 election.
Frank has raised $2.7 million with just over $1 million on hand in the final month. He has drawn on the securities, insurance and other industries affected by his committee, with the PACs and individual employees of FMR LLC, New York Life Insurance and Weiss Capital Management Inc. among his top donors. Rhodes Cook, an independent analyst who follows congressional races, said Frank likely will win re-election. An Oct. 13-14 poll of 500 likely voters commissioned for the Frank campaign showed him ahead, 56 percent to 37 percent. The poll released by the campaign had an error margin of plus or minus 5 percentage points.
'Big Chunk of Money'
Bielat said he believes that poll is skewed and that Frank's loan to his campaign shows the Democrat thinks the race is tight. "That's a big chunk of money for him, and he clearly is feeling in danger," Bielat said in an interview. Bielat said he tells voters that Frank is responsible for the housing crisis because he didn't work soon enough to rein in Fannie Mae and Freddie Mac before their financial difficulties set in.
Cook, editor of a nonpartisan political newsletter in Virginia, said the fact that Frank is concerned reflects an increasingly volatile campaign season. Also at risk are a number of Democratic lawmakers who have long held power. The Cook Political Report in Washington has rated House Armed Services Committee Chairman Ike Skelton of Missouri and House Budget Committee John Spratt of South Carolina's races as tossups.
Also rated a tossup is the Arizona race between Representative Raul Grijalva, co-chairman of the House Progressive Caucus, and Republican Ruth McClung, a Tea Party- backed candidate and political newcomer. President Barack Obama carried the district with 57 percent of the vote in 2008, and Grijalva — now in his fourth term — has won all his elections with at least 59 percent. Frank's district gave Obama 63 percent of its vote, though Watanabe said the chairman must pay attention to political changes taking hold in Massachusetts.
Republican Scott Brown in January won the Senate seat of the late Democratic Senator Ted Kennedy, and Frank's district includes areas Brown once represented in the state Capitol. Those voters helped send Brown to Washington, Watanabe said. What is more, an anti-Democratic national mood appears to be trumping everything, Watanabe said. That, he said, belies a favorite phrase of former House Speaker Tip O'Neill of Boston that "all politics is local." "This is a case where all politics is national," Watanabe said.