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If one thing was clear from Connecticut hedge fund manager David McCormick’s brief run during the 2022 Pennsylvania Republican Senate primary, it’s that his campaign had a practically bottomless underlying fundraising base — as did the candidate himself.
But while McCormick, who boasts a net worth of millions, likely won’t have trouble raising cash for his fledgling 2024 Senate bid, his financial maneuvering this time has already become the subject of scrutiny among legal experts. And those experts told The Daily Beast that it appears McCormick is testing the limits of “testing the waters” — taking steps to craft his operation while keeping it off the books and exploiting loopholes in campaign finance law. Taking advantage.
Since March, McCormick has quietly operated a state-level PAC in Pennsylvania called “Pennsylvania Rising”. But The Daily Beast’s review of the PAC’s disclosures, along with a series of reporting on McCormick’s backstage activities over the same time period, suggests the investment manager may have dual objectives in mind.
McCormick, the husband of former Donald Trump administration official Dina Powell and the head of Bridgewater Associates, the world’s largest hedge fund by 2022, is one of the GOP’s top 2024 recruits. He is also possibly the Republican Party’s best bet to unseat longtime Democratic Congressman Bob Casey. In 2022, McCormick delivered the GOP primary to his fellow wealthy non-Pennsylvanian Dr. Mehmet Oz in a nailbiter, but for the past several months, he has been setting the stage for the second act.
In six months, Pennsylvania Rising has managed to raise nearly $1.2 million for the state in a non-election year. This includes a $1 million contribution in June from the state’s wealthiest citizen, GOP megadonor Jeff Yass. Additionally, the PAC has spent much of that money not on its stated purpose of promoting state GOP candidates, but on firms and consultants that either worked for McCormick’s 2022 campaign or in his current operation. have joined.
According to Dan Weiner, a former attorney for the Federal Election Commission and current director of elections and government at the Brennan Center for Justice, McCormick is “blatantly bending the rules”.
“This is clearly a state PAC that clearly sounds like a federal PAC,” Weiner said. “These are the kind of steps that have become common, creative allocation of funds. But if you’re assembling the entire device, there’s no way to end it by saying you’re not sure you’re running.”
Candidates considering a campaign for federal office can enjoy a “testing the waters” grace period, where they can raise and spend money for services that help inform their decision. But if a candidate chooses to run, they must retroactively disclose that financial activity — and it must follow the same rules that apply to any federal campaign.
This grace period was once rare, Weiner explained, “a narrow cut for candidates who aren’t really sure they want to run.” But more and more candidates like Trump and Ron DeSantis are treating it as a black box, he said, “as a way to prevent disclosure and undermine campaign transparency, which is a fundamental building block of campaign finance law.” is, and it’s gone much further than it was originally supposed to be—a long-term shadow campaign that you run until you decide on your timeline for when you want to make it official.
“It’s a culture of impunity, and it’s that mindset that gets you to a place where a sitting member of Congress is accused of stealing a donor’s credit card,” Weiner said.
McCormick’s official announcement this month was no more than a formal approval of what supporters and observers had long assumed would happen. fait accompli, Reporting since early January has made it clear that McCormick has been openly “testing the waters” for quite some time, with even a Philadelphia Republican Party official falling for the same metaphor this summer. Have given.
“I was told that he has stuck his toe in the Atlantic Ocean and the temperature is not at the level where he needs it,” the official said. philadelphia enquirer in August. The same outlet reported that GOP insiders acknowledged in January that McCormick had already begun “interviewing media firms for a potential campaign.”
However, Pennsylvania Rising is a shining flag.
The group, which McCormick created in March, spent more than $700,000 in the months and weeks before McCormick’s October 1 formal candidacy announcement, according to The Daily Beast’s review of state filings. But the majority of that money — more than $400,000 — went to consultants, firms and executives who also worked for McCormick, either in 2022 or now. This includes his current campaign spokesperson, Elizabeth Gregory, who doubles as a spokesperson for Pennsylvania Rising and has received approximately $55,000 for that work.
Gregory did not return The Daily Beast’s detailed request for comment.
ColdSpark, a consulting firm, openly promoted its work on McCormick’s 2024 campaign launch in an email last month, which was reviewed by The Daily Beast.
“Here’s a glimpse of the hard work and professional craftsmanship that went into making the launch of one of the most important U.S. Senate races in the country a huge success,” the email said.
This spending does not appear to be in line with the mission statement on the PAC’s website.
“Pennsylvania Rising is fighting to defend our conservative values by supporting Republican candidates running for state office in Pennsylvania,” the statement said. “We will address the challenges facing Pennsylvania Republicans and serve as an opportunity to address important issues, including vote-by-mail and voter registration disparities.”
While Pennsylvania Rising has paid more than $400,000 to known McCormick appointees, it has contributed only a quarter of that amount to candidates and committees. Pennsylvania held most of the statewide elections last year, leaving an extremely narrow set of judicial and special legislative elections, most of which ended in May.
Additionally, the PAC’s spending on popular GOP fundraising firm Targeted Victory — another McCormick hire from 2022 — has already exceeded $200,000, dwarfing the PAC’s overall small-dollar fundraising and its Political contributions have been eclipsed.
Overall, this activity raises fears of a low-profile shadow operation to help McCormick make his all-but-inevitable jump to power in 2024. And that activity, experts said, pushes and may even exceed the limits of the law.
Saurav Ghosh, director of federal reform at the nonprofit advocacy group Campaign Legal Center, who reviewed Pennsylvania Rising’s filing, told The Daily Beast that McCormick “will need to answer” for the group’s activity.
“The idea of using a state PAC whose purpose is to advance other GOP candidates in Pennsylvania just to chase money is clearly not the majority of what it’s doing,” Ghosh said. “Most of this money is being spent on consultants and other strategists, and that’s an important question they have to answer.”
Because McCormick filed his candidacy the day after the third quarter reporting period ended, any potential “testing the waters” campaign activity will not be disclosed until the next round of reports in January. And while Ghosh allowed that it was possible that McCormick could eventually reveal that this PAC had conducted some of that investigative work, one key fact would take that off the table.
That would be the group’s fundraising. Pennsylvania allows unlimited individual political donations at the state level, as exemplified by Yass’s $1 million gift to the PAC. But Paul S., an expert on campaign finance law and deputy executive director of the Funders Committee for Civic Participation. According to Ryan, that contribution alone would put almost all of the PAC’s existing funds off limits for federal campaign activity.
“Any entity established directly or indirectly by a federal candidate must comply with federal restrictions on ‘soft money,’” Ryan told The Daily Beast, noting that the individual donor limit for a primary campaign is $3,300. “A single donor can’t give $1 million to a federal candidate.”
But by September 18, the PAC had spent most of Yass’s money, still having about $450,000 left. That fact, Ryan said, brings to mind recent memories of DeSantis, whose presidential efforts received a controversial multimillion-dollar boost from his state-level PAC — and a federal complaint from the campaign legal center.
Ryan said, “McCormick is the creator of a state-level PAC, so it should be a positive that the money should not be used in his federal election campaign.” He said such a move would be “completely illegal”.
However, it’s possible that McCormick could try the move that the DeSantis team did, when his state PAC contributed more than $80 million to the super PAC.
“It’s not a legal maneuver, but he could try to get around it because the Federal Election Commission doesn’t enforce those rules,” Ryan said.
McCormick’s campaign apparently may not have needed the money – he raised more than $14 million of his own funds in his five-month sprint into that year’s primary. (His team also reportedly launched a super PAC months ago, using it to build a political infrastructure like DeSantis’s.)
But the PAC offers other benefits that could benefit a Senate bid, such as underwriting voting, research and strategic consulting services.
To that point, disclaimers on both the PAC’s website and its donation landing page suggest that McCormick is using the group to acquire personal lists of supporters and potential donors. Those disclaimers tell supporters that, by entering their personal information, they agree to receive emails, text messages, and phone calls not only from Pennsylvania Rising, but also from “Dave McCormick” – including automated calls. McCormick can use these PAC assets as a federal candidate, although he will be required to report the list as contributions to his campaign.
Notably, the PAC immediately began raising money from small-dollar donors across the country. Its first financial filing revealed that donors from Florida, Texas, Tennessee, California, Virginia, South Carolina, Michigan and Oregon are pushing hard with its home-state support.
Ghosh said it’s possible the PAC is double dipping, “both testing the waters for McCormick and helping other Republicans.”
“It’s not unlikely or impossible, but we still need to know if that’s what’s happening,” he said.
Of course, McCormick already had a federal campaign underway. In fact, now that he has two of them, he has launched a new campaign committee called “Friends of Dave McCormick” before finishing his 2022 vehicle, “Dave McCormick for U.S. Senate.”
It is unclear why McCormick created a parallel group rather than rejoining his existing campaign. However, his 2022 committee faced multiple FEC notices in recent weeks, including reports from last year. The notice flagged a series of apparent errors and violations, including excessive contributions and improperly reported loans.
These debts not only include a $14.4 million loan that McCormick never paid back, but two prominent Republican consulting firms are still owed $407,000 for work through 2022. However, it cannot be closed until the campaign committee resolves those debts. It has $7,266.82 in the bank.