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Gambling and dark money bankroll two big-spending groups in Ky. governor race

Gov. Andy Beshear and his wife Britainy wave to the crowd at the public swearing in ceremony in Frankfort, Kentucky on Dec. 12, 2023.
J. Tyler Franklin
/
LPM
Gov. Andy Beshear and his wife Britainy wave to the crowd at the public swearing in ceremony in Frankfort, Kentucky on Dec. 12, 2023.

Competing gambling interests, “dark money” nonprofits, businesses and labor unions were among those bankrolling two key political groups that spent $29 million trying to swing Kentucky’s race for governor last year.

New IRS filings by the Democratic Governors Association (DGA) and Republican Governors Association (RGA) provide a glimpse at who filled the coffers of the two groups that led the way in the record-shattering $70 million spent on the race between incumbent Democratic Gov. Andy Beshear and his Republican challenger Daniel Cameron.

The two partisan groups are tax-exempt 527 organizations that can accept contributions of unlimited amounts from people, companies and unions to support their parties’ gubernatorial candidates – as opposed to the $2,100 contribution limit to Kentucky candidates in the general election.

While large corporate interests in the pharmaceutical, energy, tech and financial sectors contributed heavily to both groups, the DGA picked up nearly $2 million last year from people and companies based in Kentucky, nearly four times the amount received by the RGA — and a spillover from the Beshear campaign’s homestate fundraising advantage.

The rivalry between two gambling interests in Kentucky over whether to ban so-called “gray machines” spilled over into these 527 contributions. The DGA received more than $750,000 from the horse racing industry within the state last year, while the RGA picked up nearly half a million dollars from Pace-O-Matic — the out-of-state “skill games” company that battled the horse industry over legislation to ban their cash payout machines and made other contributions in support of then-Attorney General Cameron.

Partisan “dark money” 501(c)(4) nonprofits that can shield the identity of their donors were able to funnel millions of dollars into the two groups, with one conservative group adding another $1.25 million to the $3.25 million it had already spent to elect Cameron.

National labor groups supporting Beshear kicked in more than $2 million to the DGA. Meanwhile people and businesses from one small Kentucky town raised an eye-popping amount for the Democratic group.

The DGA directed $16 million last year to Defending Bluegrass Values, the main PAC spending ads in support of Beshear, while the RGA sent $13 million to Kentucky Values and State Solutions, its affiliated PACs supporting Cameron.

The $70 million spent in the general election by candidates and PACs more than doubled the previous record for a governor race in Kentucky, with Beshear winning by 5 percentage points despite the state’s conservative bent.

In their new filings with the IRS covering the second half of 2023, the two partisan groups both reported raising roughly $30 million, but Democrats had a big spending advantage. The DGA spent $40.6 million in the period, far more than the $24.4 million spent by the RGA.

There were only two other governor races for the DGA and RGA to spend on in 2023, though the Beshear-Cameron race in Kentucky was considered to be the most competitive and attracted twice the amount of spending from the 527 groups. While Republicans won a blowout in Louisiana, the Mississippi race was unexpectedly close, with the GOP incumbent only winning by 3 percentage points.

Here’s a detailed look at the people and industries with ties to Kentucky that contributed to the DGA and RGA, the dark money groups that pitched in and the business interests who covered their bets by sending large amounts to both organizations.

Kentucky’s horse industry bets on Beshear

More than $940,000 raised by the DGA in the second half of 2023 came from individuals and businesses based in Kentucky, nearly identical to such contributions in the first half of the year.

More than half of this funding in the latter half of the year came from the state’s horse racing industry, with Churchill Downs giving the DGA $250,000 and Kentucky Downs contributing $200,000.

The Kentucky Thoroughbred Association also contributed $25,000 in the months leading up to the election, as did Revolutionary Racing of Kentucky — the owners of a new race track and gambling facility in Ashland — that gave $50,000.

Revolutionary Racing and the owners of the Red Mile Racetrack in Lexington had already given $100,000 each to the DGA in the first half of the year, along with $25,000 from Churchill Downs.

But the horse industry didn’t place all of its bets on Democrats. Churchill Downs had already given $100,000 to the RGA earlier in the year, with Revolutionary Racing and the Red Mile owners each giving the GOP group $25,000 before the election.

Little Louisa goes big for DGA

More than $144,000 of DGA contributions came from an unlikely source in Kentucky: the small town of Louisa bordering West Virginia in Appalachia, with a population of less than 3,000.

Pioneer Health Group and London Valu-Rite Pharmacy — two companies led by Tim Robinson, the CEO of the Addiction Recovery Center drug treatment facilities — respectively gave $40,000 and $20,000 to the DGA in the second half of 2023.

Robinson’s London Valu-Rite Pharmacy had also given the DGA $50,000 earlier in the year, while the Committee for Comprehensive Healthcare Policy — a PAC whose only donor in the past two years was Robinson — also contributed $2,000 last summer.

The DGA contributions were a change of pace for Robinson, who has been a large donor for Republican candidates in the state over the past several years, though he did also give $29,000 to Beshear’s inauguration fund in November.

Another big Louisa-based contributor to the DGA was Todd Case, the owner of a large trucking company who had given $15,000 earlier in the year and whose Case Coal Sales company contributed another $11,600 in August.

Kentucky booze, roads and power flow to DGA

Among the Kentucky-based contributors that gave exclusively to the DGA in 2023 were Louisville Gas and Electric and Kentucky Utilities, who provide electricity to nearly two-thirds of the state’s counties. The companies gave $20,000 to the DGA in October, the same month that Duke Energy — which provides power to six northern Kentucky counties — gave $100,000. Duke only contributed $10,000 to the RGA last year.

Gary Taylor, the president of road contractor Bizzack Construction, contributed $10,000 to the DGA in October. The company — which has won lucrative contracts with the state to expand the Mountain Parkway — had also given $18,500 to the group earlier in the year.

Louisville-based spirits giant Brown-Forman contributed $25,000 to the DGA in August. While Sazerac — another large spirits company based in Louisville — gave $10,000 to the RGA this summer, it contributed less than the $35,000 it gave to the DGA in 2023.

Though not principally headquartered in Kentucky, health insurer CareSource — which offers federal marketplace plans in Kentucky — gave $100,000 to the DGA in October. That same month, the national PAC of the women’s health care provider Planned Parenthood contributed $50,000 to the DGA — building on its previous financial support for Beshear against Cameron, who supported the state’s abortion ban.

A fellow Democratic governor happened to be the DGA largest individual contributor of the year. Illinois Gov. J.B. Pritzker gave $2 million to the group a week before the election.

Other notable Kentucky-based exclusive donors to the DGA in the second half of 2023 include:

  • SK FL Investments LLC, which is owned by Frank Lassiter — an official who drew scrutiny from the previous administration of Gov. Steve Beshear, the current governor’s father ($50,000).
  • John Ridley, a former Democratic state legislator and Beshear administration official ($15,000).
  • New Day Recovery Center in Lexington ($20,000).
  • Nursing home centers Seneca Place (Louisville) and Valley Stream Operator (Richmond) each gave $10,000.
  • Southeast Construction Welding of Hazard has no online presence and has not filed with the Secretary of State’s office, but contributed $10,000.

Labor, PACs and ‘dark money’ pile up for DGA

Just as labor unions contributed heavily to other PACs supporting Beshear last year — more than $3.6 million — they also combined to give more than $2 million to the DGA.

The political arms of unions from around the country combined to give roughly $1.3 million to the DGA, with the largest contributions coming from the United Auto Workers and electrical workers. Two union-affiliated PACs lifted that total further. America Works USA gave $700,000 and Working for Working Americans sent $100,000.

Two progressive dark money nonprofits also directed nearly $1 million to the DGA in October. The American Bridge Foundation contributed $600,000, while America Votes gave $350,000.

The Democratic National Committee kicked in $315,000 for the DGA last fall, along with $50,000 from the Dirt Road Democrats PAC of its chairman Jaime Harrison. State Democracy Defenders PAC also gave $50,000 to the DGA in September.

Pace-O-Matic counters horse industry funds for RGA

The RGA had a harder time picking up contributions from individuals and businesses based in Kentucky than the DGA in 2023. The GOP group received more than $213,000 from within the state in the second half of the year, bringing their yearly total to just shy of $500,000.

While Kentucky’s horse industry heavily favored Beshear and the DGA, the RGA received a big boost from Pace-O-Matic. That’s the major skill games company that was doing business in the state before a new bipartisan state law banned them.

The Georgia-based company contributed $145,000 to the RGA last year, while its subsidiary Queen of Virginia also contributed $50,000. Ten Pace-O-Matic executives also combined to contribute $267,000 in the second half of the year, with owner Karmin Pace contributing $200,000.

In addition to the $50,000 Pace-O-Matic gave to the RGA in late 2022, the company and its executives also contributed $100,000 to Bluegrass Freedom Action — a PAC airing ads to support Cameron in his GOP primary — and $29,000 to Cameron’s campaign last spring.

Pace-O-Matic also gave one $25,000 contribution to the DGA last summer.

Amidst the company’s heavy funding of the RGA and PACs supporting Cameron last year, Pace-O-Matic also sued the state to block the new gray machines ban. Cameron’s office defended the state in the lawsuit, though he personally recused himself from the case.

Yass and Concord Fund remain big GOP funders

Two of the largest funders of PACs supporting Cameron in his bid to win the GOP primary and general election last year were also two of the largest contributors to the RGA.

The Concord Fund, a major conservative dark money group, contributed $750,000 to the RGA in July, following its $500,000 donation earlier in the year. The same group had also given $2.25 million to the pro-Cameron Bluegrass Freedom Action in the primary and more than $1 million to the same PAC during the general election.

Jeff Yass, the Pennsylvania billionaire financial investor, also contributed $250,000 to the RGA last summer. Three PACs that are almost entirely bankrolled by Yass also spent nearly $8 million in support of Cameron during the general election.

Americans for Prosperity, a conservative group tied to billionaire industrialist Charles Koch, also contributed $100,000 to the RGA.

Biggest Ky. funders of RGA in 2019 don’t show up this time

The two biggest funders of the RGA from Kentucky in the state’s previous race for governor in 2019 — who are also the two largest GOP political contributors in Kentucky over the past decade — barely showed up this time around.

The largest RGA contribution from a Kentuckian in 2019 was the $250,000 given by Joe Craft, the CEO of coal giant Alliance Resource Partners. His wife, Kelly Craft, challenged Cameron in a sometimes nasty primary GOP primary in 2023 where she finished a distant third.

Following that primary, neither Joe nor Kelly Craft contributed any money in 2023 to the RGA, Cameron’s campaign or the other PACs supporting his candidacy against Beshear.

The second-largest funder of the RGA from Kentucky in 2019 was Inez banker Terry Forcht, who contributed $150,000. Forcht, who supported Craft in the primary, only gave $1,000 to the RGA last year.

Other notable Kentucky donors to the RGA in the second half of 2023 include:

  • ParSyd LLC, which is tied to U.S. District Judge Rebecca Jennings and her husband Patrick Jennings, a major GOP lobbyist ($5,000).
  • Neil Ramsey, CEO of investment firm ($5,000).
  • Kentucky Association of Healthcare Facilities ($5,000).
  • Commonwealth Network LLC, which is tied to lobbyist Steve and Ginger Kelly ($2,000).

The largest individual donor to the RGA outside of Kentucky in 2023 was Paul Singer, a hedge fund manager who is one of the largest Republican donors in the country. Other notable large RGA donors include GOP Sen. Peter Ricketts of Nebraska and Buc-ees president Arch Aplin III, who both gave $250,000 in the latter half of the year.

Kentucky companies cover their bets with both DGA, RGA

Some of the Kentucky-based companies who gave the largest contributions to a governors association gave heavily to both sides.

Humana had given $100,000 to the DGA in January, but then gave $50,000 to the RGA later that summer. The day after the election in November, the Louisville-based company gave $110,000 to both groups.

Other Kentucky-based companies giving similar amounts to both the DGA and RGA include:

  • ResCare, a Louisville-based community living services provider, gave $125,000 to both the DGA and RGA.
  • Owensboro-based Southern Star Central Gas Pipeline contributed $35,000 to the RGA and $25,000 to the DGA.
  • The PAC of Houchens Industries, which owns chains of grocery and convenience stores, contributed $10,000 to both the DGA and RGA.
  • Railroad giant R.J. Corman gave $5,000 to both groups.

Other companies that aren’t headquartered in Kentucky but do significant business there also gave similar amounts to both groups.
IGT Global Solutions and Scientific Games both do significant business with the Kentucky Lottery. IGT contributed $275,000 to the RGA and $250,000 to the DGA, while Scientific Games gave $102,000 to the RGA and $125,000 to the DGA.

Major health care companies who hold or vie for Kentucky’s lucrative Medicaid managed care contracts also contributed heavily to both sides. Molina Healthcare gave $1.1 million to the RGA and $775,000 to the DGA. United Healthcare and Elevance Health both gave $500,000 to both 527s earlier in the year.

Cable and internet provider Charter Communications gave $221,000 to the RGA and $165,000 to the DGA in 2023.

The tables tilted a little more for Republicans when it comes to the contributions of HCA Healthcare, which owns hospitals in Frankfort and Bowling Green. The Nashville-based company gave $250,000 to the RGA and $75,000 to the DGA last year.

National tech, pharmaceutical giants play both sides

While it’s unclear if they had specific intentions in mind for their funds to go into Kentucky’s race for governor last year, the massive corporations doing nationwide business tended to have the largest contributions to the 527 groups, and didn’t play favorites.

Microsoft gave $400,000 last year to both the DGA and RGA, while Google contributed $325,000 to Democrats and $275,000 to Republicans.

PhRMA, the trade association for pharmaceutical research companies, gave $250,000 to the RGA and $550,000 to the DGA, while Pfizer gave $300,000 to the RGA and $375,000 to the DGA. CVS and Walgreens also combined to give both sides $400,000.

One of the largest corporate contributors to both sides was Centene Management Company, a health care services provider based in St. Louis, which gave $1.4 million to the RGA and $1.2 million to the DGA.

LPM's state government and politics reporting is supported in part by the Corporation for Public Broadcasting.

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Joe is the enterprise statehouse reporter for Kentucky Public Radio, a collaboration including Louisville Public Media, WEKU-Lexington, WKU Public Radio and WKMS-Murray. Email Joe at jsonka@lpm.org.