The GOP's Money War: the Tea Party vs. Business

Frustrated that party leaders haven't been able to corral the Tea Party, Republican business donors are taking matters (and their money) into their own hands.

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Frustrated that party leaders haven't been able to corral the Tea Party, Republican business donors are taking matters (and their money) into their own hands. Tea Partiers in Congress showed little regard for big business when they threatened to blow through the debt ceiling — a move that many biz leaders see as the final straw. As David French, the top lobbyist at the National Retail Federation, told The New York Times on October 9:

"We are looking at ways to counter the rise of an ideological brand of conservatism that, for lack of a better word, is more anti-establishment than it has been in the past. We have come to the conclusion that sitting on the sidelines is not good enough."

That was a week before Congress reached a budget deal to reopen the government and raise the debt ceiling (without any GOP "wins" like delaying or chipping away at parts of Obamacare). Now that the shutdown is over, wealthy donors are not ready to forgive and forget. Official talks to develop some kind of fundraising entity (thought probably not a super PAC) have begun. Politico reports on Friday:

"New York City GOP mega-bundler Paul Singer has held a series of informal, and a few very formal, discussions in recent months with other extremely wealthy donors about how best to spend their cash in 2014, including debating the idea of forming a new entity to play a serious role in the midterm races."

It should be noted that Singer is a major donor to the Club for Growth, which backed Sen. Ted Cruz.

The American Bank Association gave thousands of dollars to Tea Party candidates in the 2012 cycle, but is beginning to regret those investments. The Daily Beast reported on Thursday that Cruz, Rep. Ted Yoho (perhaps the most outspoken default denier in the GOP), Rep. Scott Garrett, and Rep. Mick "there is no default" Mulvaney all received donations from the ABA. The ABA would not comment on this giving history, but its president, Frank Keating, warned of the catastrophe default would bring during the shutdown.

"One thing about Wall Street, it is very aware of who is working in their best interest," Michael J. Driscoll, a former managing director of Bear, Stearns & Co, told Politico. "What we want [in a candidate] is a conservative business person, but someone who in many respects will be more realistic, in our opinion," Bruce Josten, the top lobbyist at the U.S. Chamber of Commerce (which is the biggest lobbying organization in Washington), told The New York Times. Business donors aren't ready to abandon the Republican party, they just want the party not to be controlled by a House ready to blow through the debt ceiling.

So how will big business successfully funnel money like Tea Party groups Freedomworks and Heritage Action? Well, by acting like the Tea Party and focusing on grassroots activism, according to the National Journal's Alex Roarty.

So they’re talking about taking an approach with a smaller footprint, about regaining leverage in GOP circles by encouraging grassroots business activism. That means getting local (and politically moderate) business owners to pressure their tea-party lawmakers toward negotiation and compromise, and nudging these local (and more politically moderate) business leaders to run for office themselves. Anything, lobbyists and Republican strategists say, to create the impression that this is an organic development—that Washington and national business interests are keeping their heavy hands out of the districts. 

The Tea Party doesn't seem worried, however. Freedomworks CEO Matt Kibbe said Friday on CSPAN that moderate Republicans will "go the way of the Whigs."

Everything's more democratized and Republicans should come to terms with that. They still wanna control things from the top down and if they do that, there will absolutely be a split. But my prediction would be that we take over the Republican Party and they go the way of the whigs.

And so a different kind of funding battle begins.

This article is from the archive of our partner The Wire.