As Virginia governor's race turns ugly, outside funds flow in

Reuters

By Gary Robertson

RICHMOND, Va., Oct 11 (Reuters) - The battle between a TeaParty favorite and a former top Democratic official to becomethe next governor of Virginia has set a record - moreout-of-state money has poured into this race than anygubernatorial campaign in the state's history.

In the contest between Republican Ken Cuccinelli andDemocrat Terry McAuliffe, about 70 percent of the nearly $30million raised for the campaigns has come from outside Virginia,according to the Virginia Public Access Project, a non-profitgroup that monitors spending in state politics.

The largesse underscores the thinking among politicaloperatives, lobbyists and special interest groups: When it comesto elections this year, Virginia is the only game in town. Thebiggest U.S. political contest of 2013, to take place Nov. 5, iswidely seen as a testing ground for next year's congressionalmid-term elections.

It is the first time in the state's history that agubernatorial candidate has raised more than half his fundsoutside Virginia, the Virginia Public Access Project said,referring to both Cuccinelli and McAuliffe.

The list of donors includes special interest groups such asPlanned Parenthood and the National Rifle Association, and hedgefund executives from as far afield as New York and California.

"I'd be surprised if there weren't massive out-of-statecontributions," said Larry Sabato, director of the Center forPolitics at the University of Virginia. "Virtually everyDemocratic contributor knows Terry McAuliffe, and Ken Cuccinelliis a national Tea Party hero, and a favorite of most groups onthe right, from the NRA to social issue organizations."

Cuccinelli, Virginia's attorney general, led an unsuccessfullegal challenge to President Barack Obama's healthcare law,while McAuliffe is a former chairman of the Democratic party.

The surge in out-of-state funding underscores the risingimportance of Virginia in electoral politics.

Long considered reliably Republican, Virginia has been putsquarely in the swing state category by changing demographics,particularly in the northern suburbs. President Barack Obama wonthe state in 2012, following up on his 2008 victory, the firsttime a Democrat had won the presidential vote there since 1964.

Hoping to capitalize on Obama's win, McAuliffe, 56, has runa campaign on national party touchstones including theenvironment, abortion rights and gun control.

The candidates have traded bitter personal attacks, witheach describing the other as unfit to govern.

Cuccinelli, 45, has dredged up scandals dating back to theClinton administration, when McAuliffe was chairman of theDemocratic National Committee, to remind voters that he"invented the scheme to rent out the Lincoln Bedroom" in theWhite House to raise funds for the Democratic Party.

McAuliffe, in turn, has played up the fact that Cuccinellihad been sucked into a donor scandal involving gifts from StarScientific Inc Chief Executive Jonnie Williams. An ethics probecleared Cuccinelli of any wrongdoing, though he has made apublic apology.

TURNOUT IN DOUBT

The campaign has grown uglier in recent weeks.

With Republicans shutting down large parts of the federalgovernment in a bid to repeal Obama's healthcare reform law, theVirginia election is seen as a barometer of which party iswinning the battle for public opinion.

So far, the 11-day-old shutdown has given McAuliffe a boostin a state that is home to a larger percentage of federalworkers than the national average. A Politico poll released onTuesday showed McAuliffe with a 9 percentage point lead.

In a campaign appearance this week, McAuliffe called onCuccinelli to denounce the shutdown. Cuccinelli has said hewants to see the government up and running, and called for thepresident, members of his cabinet and all members of Congress todecline their pay during the shutdown.

As the attacks have grown sharper, political donations fromnational lobbying groups have followed. McAuliffe has been thebiggest beneficiary: Some 74 percent of the $17.4 million initemized donations above $100 - the threshold the VirginiaPublic Access Project uses to track donations - came fromoutside Virginia.

Sixty-six percent of the $11.6 million in large donations tothe Cuccinelli campaign has come from out of state.

Planned Parenthood vowed to spend $1 million on advertisingto educate Virginia voters about what the group described asCuccinelli's "dangerous" views on women's health.

The National Rifle Association, a frequent player inVirginia politics, has contributed nearly $500,000 to finance TVand Internet advertising opposing McAuliffe, who wants universalbackground checks for gun sales.

Hedge-fund operators have also emerged as big contributors.

Robert Mercer, of East Setauket, New York, has given$600,000 to the Virginia Principle Fund, a pro-Cuccinellipolitical action committee. Tom Steyer, a hedge-fund billionaireand environmentalist in San Francisco has formed the NextGenClimate Action Committee, which donated $439,000 to McAuliffeand $125,000 to the pro-McAuliffe National Wildlife Federation.

"Tom sees a significant difference between Terry McAuliffe,who is committed to creating clean economy jobs as part of anoverall economic plan and Ken Cuccinelli, who sneers at the veryidea of basic climate science," said Mike Casey, a consultantfor Steyer's NextGen.

Cuccinelli in 2010 launched an inquiry into whether aUniversity of Virginia climate scientist manipulated data tosupport his research correlating an increase in globaltemperatures and growing fossil fuel consumption. The VirginiaSupreme Court later ruled that Cuccinelli had no authority toissue such a demand.

The donations have fueled negative campaign advertising,sparking fears among some observers that it could turn offvoters and depress turnout on election day.

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