- Fracking's Wilks, Quantum Energy's Neugebauer back Texan
- Clinton is third, in sign of industry `hedging their bets'
U.S. Senator Ted Cruz, the first-term Republican from Texas, leads all candidates in the scramble for oil industry campaign cash, surpassing Jeb Bush, whose father and brother were West Texas oilmen before they became presidents.
Cruz leads all presidential candidates in contributions from employees of oil and natural gas companies through the end of 2015, according to the nonprofit Center for Responsive Politics. His coffers have been boosted by scores of smaller gifts and $25 million to super-PACs that back his campaign from two sources: energy investor Toby Neugebauer and Dan and Farris Wilks, brothers who made their fortune in the fracking boom.
Industry donations are following the surprise story line of the 2016 presidential race which has seen upstart Republican candidates Cruz and Donald Trump beating all establishment favorites. Cruz won the Iowa caucuses on Feb. 1 and was third in New Hampshire Feb. 9, where Trump prevailed. Bush’s campaign has languished.
“If you line up the priorities of the hydrocarbons industry, they fit almost perfectly with Cruz’s positions," Mark Jones, a political science professor at Rice University in Houston, said in an interview. “It’s a natural policy fit.”
Cruz’s stance on climate change and policies such as cap-and-trade align with the industry’s critical views, according to Jones. More generally, his belief in limited government also fits with industry concerns about environmental regulation. While the industry initially was supportive of Bush, the perception now is that he’s unlikely to become the Republican nominee, he said.
“There is the combination of picking someone you’re aligned with but also investing in someone you think will actually win the nomination,” Jones said.
Even if Cruz doesn’t win, he’s an influential senator of the state where many energy companies are based or have a significant presence. That leads to a tendency to make sure Cruz knows he has the industry’s support, he said.
Bush was a distant second in oil-industry contributions, despite the support of energy-sector aristocracy like pipeline magnate Richard Kinder, investing tycoon T. Boone Pickens and Trevor Rees-Jones, the billionaire founder of Chief Oil & Gas LLC.
The Cruz and Bush campaigns didn’t respond to messages seeking comment.
Democrat Hillary Clinton, who’s vowed to defend President Barack Obama’s policies, was a surprising third, ahead of all other Republicans.
Bush’s moderate politics and family ties may make him a better fit for industry pragmatists, Jones said. Still, it’s the more conservative Cruz whose campaign has taken off.
Cruz led in direct contributions from oil and gas company employees with $675,000, according to an analysis of Federal Election Commission filings by the Center for Responsive Politics in Washington. Bush, who led the money chase in June, was second with $420,600. Clinton followed with $227,000.
“People are hedging their bets," said Jones. “There’s a recognition that it’s an even-money bet that Hillary Clinton is the next president of the United States, and you don’t want to be completely on the outs with a new Clinton administration.”
Trump, who is leading Republicans in the polls, hasn’t won over the oil patch, at least when it comes to donations. He raised just over $8,000 from oil and gas employees, 16th overall and behind also-rans Bobby Jindal and Chris Christie.
The filings capture two streams of election money: direct giving to campaigns and larger contributions to super-PACs, outside groups that support politicians but aren’t allowed to coordinate with them. FEC data through January is scheduled to be released on Feb. 20.
Cruz is winning in both categories. Among the rank-and-file, he collected more than 1,000 individual donations over the past year from people who indicated they work in the industry, according to data compiled by Bloomberg Government. Bush had just 64.
But Cruz’s biggest benefactors were contributors to super-PACs that back his campaign. Neugebauer, co-founder of Houston private-equity firm Quantum Energy Partners LP, gave $10 million to one. Another super-PAC raised $15 million from the Wilks and members of his family. The brothers from Cisco, Texas, sold Frac Tech Services Inc. for $3.5 billion in 2011, the Wall Street Journal reported in 2011. They have since emerged as major backers of social conservative causes.
Bush’s Right to Rise super-PAC has its own mega-donors. The group received $1 million apiece from Kinder, Rees-Jones, legendary oil explorer Ray Lee Hunt and Hushang Ansary, chairman of drilling-equipment firm Stewart & Stevenson and matching gifts from their wives. Exxon Mobil Corp. chief Rex Tillerson gave a more modest $7,700, including individual and super-PAC donations.