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August 22, 2014

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Recession means there’s less money for political campaigns

Gaming cuts its contributions; developers aren’t giving at all

Add politicians to the list of Nevadans hard up in the recession.

Candidates, consultants and fundraisers say the sharp economic downturn has shrunk the pool of traditional donors to whom they turn for money — and made those who are still giving reluctant to make commitments early in the campaign.

Experts see a national trend but say the effect is more pronounced in Nevada, where the economic engines — growth and gaming — are sputtering, if not seizing altogether.

What it means, they say, is candidates will be forced to run smaller, more efficient campaigns and rely on less costly ways of getting out their message, such as on the Internet.

In the 2006 election cycle, casino companies were Nevada’s top political donors, contributing more than $6.7 million to state candidates, according to the National Institute on Money in State Politics. The real estate industry contributed $3 million.

Today, casino giants MGM Mirage, Harrah’s Entertainment and Station Casinos are slashing costs to cope with huge debt taken on in the boom and declines in visitor volume and gaming revenue.

Development has slowed dramatically. Building permits issued by Clark County have declined by about 60 percent in the past year.

As Dan Hart, the Democratic political consultant, put it: “Gaming is cutting back and developers have disappeared. Candidates are universally concerned about raising money.”

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Michael Montandon

Take, for instance, Mike Montandon. The former three-term mayor of North Las Vegas is one of four Republicans vying for the party’s nomination in the governor’s race. Although he declined to disclose how much he has raised since declaring his candidacy, Montandon acknowledged the difficulty.

“It has been very tough,” he said. “But we’re keeping the campaign funded.”

In addition to donors feeling less flush, consolidation in the gaming industry has reduced the number of big donors, Montandon said. “It isn’t what it used to be,” he said. “You can count the number of key players on one hand.”

MGM Mirage spokesman Alan Feldman said his company is cutting political contributions by 40 percent this cycle. “We are no less interested in politics, no less committed to participation,” he said, “but we have to be realistic about what’s appropriate under the circumstances.”

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Rory Reid

MGM Mirage announced in July that in the race for governor it would exclusively support Clark County Commission Chairman Rory Reid, who’s running uncontested for the Democratic nomination.

Feldman said the company pledged $100,000 to Reid’s campaign, roughly half the amount it donated to the company’s favored candidate in the 2006 governor’s race, Jim Gibbons.

The company does not plan to contribute any more money in the race.

Political fundraiser Amy Ayoub, who counts Reid among her clients, said the days when gaming companies gave to multiple candidates in the same race are over.

“Contributors are being very careful about whom they support,” Ayoub said. “Relationships mean more now than ever.”

Among the exceptions, experts say, are candidates in lightning-rod races.

For example, whoever emerges from the field of challengers to face Senate Majority Leader Harry Reid is expected to have little difficulty attracting donations from across the country as Republicans aim to take down the high-profile Democratic leader.

Similarly, Nevada Democrats are expected to pool money for key state Senate races to expand their majority in the upper house of the Legislature. The Democratic challenger to Republican state Sen. Barbara Cegavske will likely benefit from the party’s interest.

Also dodging the local donation downturn are candidates who have connections to out-of-state sources.

Rory Reid has benefited from his relationship with former Sen. Hillary Clinton, whose presidential campaign he chaired here. Los Angeles Mayor Antonio Villaraigosa, a Clinton supporter, will host a fundraiser for Reid this week in California. Former President Bill Clinton has committed to hosting an event for the county commissioner in Las Vegas next month.

Reid rubbed elbows with business and government leaders at the annual meeting of Clinton’s Global Initiative in New York last week. Those connections will mean more out-of-state money in state politics than past cycles, Ayoub said.

Though campaign finance reports aren’t due until January, Rory Reid’s campaign says it already has $3 million in the bank.

Republican consultant Jim Denton said the shrinking of the pool of Nevada money favors incumbents over lesser-known challengers. Regardless, he said, “everyone is going to have to lower their expectations of what they can raise, and everyone is going to have to learn to spend that money smarter.”

Hart said that would mean less spending on traditional TV ads and more focus on the Internet and social networking sites such as Facebook and Twitter.

“You have to run campaigns differently,” he said. “You have to search for creative ways to connect with people and deliver your message.”

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