Buffetts Take On Ricketts in Nebraska's Billionaire-Backed Race
Chuck Hassebrook, Nebraska Democrats’ best chance in two decades for winning a governor’s race, stands at a hotel ballroom podium in an Omaha suburb and takes aim at his Republican opponent Pete Ricketts, the son of billionaire TD Ameritrade Holding Corp. (AMTD) founder Joe Ricketts.
“His job at the top of corporate America was given to him by his dad,” Hassebrook, 59, tells the crowd of about 500 Democratic activists. “His dad wants to buy him a new job at the top of his state.”
The crowd reacts to the trust-funder trashing with delight, though one supporter is absent: Hassebrook’s honorary campaign co-Chairman Susan Buffett, the daughter of Berkshire Hathaway Inc. (BRK/A) Chairman and Chief Executive Officer Warren Buffett.
Though Susan Buffett’s name is not on the Nebraska ballot, her leadership position with Hassebrook’s campaign puts the offspring of two of America’s wealthiest men on opposite sides of a race where four percentage points separate the candidates.
Her campaign role -- along with a $100,000 donation from her father -- has helped make Hassebrook the best-funded Democratic candidate for governor in more than a decade, cash he’ll need to counter the more than $10 million in Republican spending that he’s anticipating between now and November.
“It has the potential to be a big race,” said Mitchell West, a senior analyst with New York-based Kantar Media’s CMAG, which tracks television advertising. “There’s a lot of money here, if they decide to battle it out.”
The contributions pouring into Nebraska, with its 1.2 million registered voters, is the latest example of how U.S. billionaires are engaging in elections. Their new roles result from regulatory inaction and 2010 court rulings that paved the way for unlimited spending on politics by individuals, corporations and labor unions.
Since then, Joe Ricketts created the Ending Spending Action Fund, which he runs with his youngest son Todd. The super-political action committee has become the third-largest spender on behalf of Republican candidates this cycle, according to the Center for Responsive Politics, a Washington group that tracks political spending.
Ending Spending doesn’t plan to contribute in the Nebraska race, said Brian Baker, president of the super-PAC. Instead, Republican mega-donors, including energy executive David Koch, hedge fund manager Paul Singer, investor Foster Friess, and members of Ricketts’ clan have helped the family’s oldest son raise $4.3 million so far. The candidate’s parents alone have donated $600,000 to his cause.
Warren Buffett’s check has caught the eye of Democratic party activists who have sought to lure the world’s fourth-richest man more deeply into political fundraising. Buffett generally has donated to Democrats or party organizations, not outside political groups.
Buffett and his daughter Susan both declined to be interviewed for this article.
The chief of Omaha-based Berkshire traditionally has relied on soft power, lending his name to causes. In 2011 he spurred a national conversation about taxes when he pointed out in a New York Times essay that he paid a lower rate than anyone in his office. President Barack Obama seized on the anecdote and outlined a minimum tax on high earners -- dubbed the “Buffett Rule” -- during his 2012 State of the Union address.
He’s also stirred debate about large inheritances. Buffett, 83, committed most of his wealth to the Bill & Melinda Gates Foundation in 2006. He distributes some of his Berkshire stock each year to charities overseen by his three children and one named after his late wife, Susan. He’s said the plan is to give his heirs “enough so that they could do anything, but not enough so that they could do nothing.”
Yet Buffett’s check-writing has begun to change in recent years. In the 2012 election cycle, he donated almost $200,000 to campaigns and party committees compared with $28,400 in the 2010 cycle, according to federal and state records. He headlined fundraisers for Obama’s re-election, though he rebuffed solicitations by Priorities USA Action, a super-PAC supporting the president, said a person familiar with the talks who wasn’t authorized to speak publicly.
At a May 2012 Berkshire annual shareholders meeting in Omaha, Buffett was asked about giving to outside groups such as super-PACs, which raise and spend unlimited sums while not coordinating their activity with candidates.
“I don’t want to see democracy go in that direction,” Buffett said. “You have to take a stand some place.”
Former Nebraska U.S. Senator Bob Kerrey, who in 2012 tried to recapture the seat he held from 1989 to 2001, said he has refrained from pressing his friend to give to non-candidate accounts.
“I knew what the answer was going to be,” Kerrey, a Democrat, said in an interview. “I don’t always know what question not to ask to avoid insulting somebody but, in this case, I did.”
Others in Buffett’s inner circle have asked him to increase his giving to Democrats, including Richard Holland, who first invested with the billionaire five decades ago and is the Hassebrook campaign’s other honorary co-chairman.
“I have written him notes asking why the hell he doesn’t” contribute more, Holland said. “I never get a reply.”
In June, Buffett took a step toward big-money giving: His check for $100,000 to Hassebrook’s campaign marked the largest single donation he’s made to a candidate, according to state and federal records. Nebraska state law doesn’t impose campaign contribution limits.
The donation helped Hassebrook raise about $1.4 million, according to state records, and he said he expects to collect enough for his message to break through on television.
“Sometimes those large-money ads work against you,” even if they are produced by friendly super-PACs, said Hassebrook in an interview at his campaign headquarters in an Omaha office park. Voters “see those ads as an implication of who you are and that you’re trying to buy the race.”
The Buffett support has helped excite supporters, said Hassebrook, the former director of the Center for Rural Affairs, a Lyons, Nebraska-based non-profit that advocates for small farms, renewable energy and health care. He left the center after 36 years last August to campaign full-time.
“Warren Buffett is perhaps America’s most respected and effective and brilliant investor,” he said. “When they see him investing in me, it says something to them.”
A June poll by Public Policy Polling in Raleigh, North Carolina, showed Hassebrook down by four points, though the Washington-based Cook Political Report rates the contest as “solid Republican” because of the state’s registration tilt. Forty-eight percent of voters filed as Republicans while 31 percent are affiliated with the Democratic Party, according to state election data.
Although family wealth is fueling his campaign, Ricketts is building a broader network than he did in 2006, when he spent $12 million of his own money on a losing U.S. Senate bid.
“In ’06 I put a lot of my own money into the race, some people took away that I was trying to buy the race,” Ricketts, 49, said in an interview. “This time I’m really focused on showing I have a broad base of support. And also, quite frankly, I learned that if somebody writes you a ten dollar check they’re going to vote for you.”
The Ricketts campaign dismissed the accusation that his father gave him a cushy job at Ameritrade. He started in entry-level position, and rose to president of retail operations. During his tenure in that position and as chief operation officer, the company hired more than 2,800 employees.
“Pete played an integral role in the success and growth of Ameritrade,” said campaign spokesman Josh Moenning in an e-mail. “In the same way, he wants to help Nebraska grow. He knows what it means to manage costs, make investments, and grow jobs.”
On July 26, Ricketts marched through 90-degree Fahrenheit (32 Celsius) heat with his wife, Susanne, and one of his three children, Roscoe, at a parade in Benson. Spying a man with a shaved head -- just like his own -- he cracked a joke: “Hey, there, I like your barber!”
“That always gets a laugh,” Ricketts said.
In the May 13 Republican primary, Ricketts bested a field of six candidates in a race that drew spending from outside groups for the first time in a Nebraska governor’s contest. Four groups paid for television commercials, according to Kantar Media’s CMAG data. One of them, USA Super PAC, received checks from some of the same donors who gave to Ricketts’ campaign, including Singer and Ronald Gidwitz, co-founder of GCG Financial Inc., a Bannockburn, Illinois-based insurance and financial services firm.
Democrats are girding for the same activity in the November election, with a countering strategy that includes broadening the voter base. Nebraskans for Better Wages, a local activist group, collected enough signatures for a ballot measure that would increase the state’s minimum wage to $9 an hour from $7.25. The signatures still must be verified.
“That vote is likely to bring a lot of people to the polls who are poor and not very well heeled,” said Holland, the Hassebrook campaign’s co-chairman who, state records show, sunk $350,000 into the ballot signature collection effort. “And that may be a tipping point” in the race.