Swing State Showdown

Why business, organized labor, and lawyers are fixated on a congressional race in Iowa

From its rolling cornfields to the small manufacturing operations on the bluffs above the Mississippi River, the first congressional district of eastern Iowa has become a leading battleground in the Republican effort to fend off an increasingly plausible Democratic takeover of Congress. Business interests have made the race a top priority, and for good reason: It is a swing district in a swing state, featuring two articulate and well-funded candidates vying to replace departing Republican Representative Jim Nussle. The U.S. Chamber of Commerce and other business groups have poured money into the campaign of the Republican candidate, restaurateur Mike Whalen, who argues on the stump that he knows firsthand about the impact of taxes, regulation, and government mandates on the private sector. Organized labor and lawyers, meanwhile, have fueled the campaign of Democratic candidate Bruce Braley, a plaintiff's attorney and a former president of the Iowa Trial Lawyers Assn.

"From a business perspective, you have a race that ought to interest everyone very much," says John R. Gilliland, senior vice-president at the Iowa Association of Business & Industry.

Whalen has played the business card early and often. On Sept. 28, he took part in a roundtable at a riverside hotel in the town of Bettendorf with women executives who lamented the costs of lawsuits to business and praised Whalen's understanding of the burden of regulation. Over eggs and made-in-Iowa bacon and sausage, Flo Spyrow, vice-president for hospital operations at Trinity Medical Center in Bettendorf, told the candidate that 8 of the district's 12 counties have no OB/GYN doctors because of malpractice insurance costs. "We need tort reform," she said.

Whalen, whose support from business helped him to prevail over two more socially conservative candidates in a wide-open June primary, is hoping to capitalize on the name recognition from his quarter-century in the restaurant and hotel business. But even his staunchest supporters are worried that the scandal that broke in Washington on Sept. 30 involving sexually explicit e-mails sent to a teenage male page by ex-Representative Mark Foley (R-Fla.) could make a challenging political environment even more harrowing.


If Whalen loses, it won't be for lack of resources. Business accounts for 60% of Whalen's campaign contributions, according to the nonpartisan Center for Responsive Politics. The Iowa Association of Business & Industry is helping employers educate workers about the differences between the candidates and early-voting procedures. Deere & Co. (DE ), the district's leading employer, has created a customized election Web site. "People have figured out what's good for business is good for their jobs," says Kendig Kneen, chief executive officer of Al-Jon Inc., an Ottumwa (Iowa) maker of car-crushing devices.

Not surprisingly, the district has been flooded with proxies for both candidates. Whalen has imported Republican heavyweights such as First Lady Laura Bush, Vice-President Dick Cheney, White House political guru Karl Rove, and Senator John McCain (R-Ariz.). Braley has countered with Democratic star Senator Barack Obama of Illinois, 2004 Vice-Presidential nominee John Edwards, and 2008 Presidential hopeful Mark Warner, former governor of Virginia. Labor has hundreds of ground troops here, and lawyers have donated more than $460,000 to Braley.

Normally, a well-financed Republican like Whalen might have an edge in a district that has not elected a Democrat to Congress since 1974. But this is not a normal year. A recent poll found that President Bush's job approval rating in the district has dropped to 30%, and the Iraq war is very unpopular in a state suffering a disproportionate number of casualties.

Democrats must pick up 15 GOP seats to take back the House, and this district is one of the most vulnerable of the three dozen currently in play. Independent polls vary widely, and the e-mail scandal that has rocked the Republican House leadership will only complicate matters. "This is a very tough race," McCain says.

The GOP nominee is well-known for his chain of Iowa restaurants, The Machine Shed, featuring vintage farm implements, rustic decor, homegrown Iowa pork dishes, and Aunt Grace's famous apple dumplings. "He's not elite or upper crust," says Delia Meier, who owns and operates the largest truck stop in Iowa. "You cannot work in a restaurant and not be one of us."

Whalen is not your typical partisan. Like many executives, he decries fiscal mismanagement on the GOP's watch. He defended companies' attempts to deal with illegal immigration while his primary opponents called for deportations and a fence along the Mexican border. "I get tired of business having the finger pointed at us, that somehow we are all scofflaws or criminals," Whalen says. "This is a government problem. This is not a business problem."

Whalen's platform mirrors that of the business establishment. He calls for an overhaul of the tax system and creation of private savings accounts within the Social Security system. He favors immediate deductibility of capital equipment and advocates limits on medical malpractice suits. "The reason I ran is to get things done," he says. "I don't need a job, and I don't need to be in Congress to validate my ego."

But Democrats think Whalen's business successes can be turned into his Achilles' heel. TV ads blast "Millionaire Mike" for paying some of his restaurant employees paltry wages and for moving his corporate headquarters to Illinois to avoid Iowa taxes. "He's got a good restaurant, but he's made his money on the backs of a lot of people that make the minimum wage," says Mike Traylor, president of the American Federation of State, County & Municipal Employees unit in Davenport.

Braley also accuses Whalen of trying to privatize Social Security to aid rich Wall Street buddies. "His politics of privilege benefit the richest 1% of people in this country," he roared at a Sept. 30 rally in Davenport with Obama.

Braley's platform combines antiwar rhetoric with fiery economic populism. He advocates an increase in the minimum wage, expansion of renewable fuels, and a new approach to trade. "I know what it's like to work a minimum-wage job," says Braley, who worked throughout college and law school. "My opponent has never applied for a job as an adult."

By Richard S. Dunham

    Before it's here, it's on the Bloomberg Terminal.