Taking Down Mitch

Mitch McConnell is the most powerful person in the US Senate. In fact, he may be the most powerful person in US politics because Trump would be toast if the Senate turned against him. But Mitch McConnell has never been particularly popular in his home state of Kentucky, even at the height of his power. In most of his elections, he has relied on the fact that the state is strongly Republican and that he can raise boatloads of money to scare off any serious challenge from a Democrat. Nor has he really received a real primary challenge from the right, crushing now Governor Matt Bevin by over 20% in 2014.

With the Senate seemingly in permanent do-nothing mode other than packing the court with right wing functionaries, McConnell has been in the news lately primarily for his involvement in a couple of pretty outrageous scandals that might normally be trouble for a politician in any other time than the age of Trump.

First, last December, the Treasury Department announced its intention to lift sanctions three Russian companies, aluminum giant United Co. Rusal PLC, its parent EN+ Group PLC, and JSC EuroSibEnergo, a Russian energy company. All three were owned by the sanctioned Russian oligarch and Paul Manafort former partner and creditor, Oleg Deripaska. As part of the deal, Deripaska would theoretically relinquish control of these companies by offloading a portion his shares to other entities, reducing his stake to just under 50%. As it turned out, those entities included his children and VTB, a major Russian bank known as “Putin’s piggy bank”, and one of the trustees overseeing these arrangements was a lawyer in a legal firm with a long history of work for Deripaska. Deripaska himself would still remain sanctioned.

Even some Republicans balked at this move and a resolution was introduced in the US Senate in January of this year that would have blocked the Treasury Department from lifting these sanctions. In all, eleven GOP Senators voted for that resolution over the objections of Senate Majority Leader Mitch McConnell. Unfortunately, those votes, along with the all the Democrats, still left them three short of the 60 votes required to break the filibuster and the sanctions were lifted.

Remarkably, almost exactly three months later, in April of this year, that aluminum giant Rusal, with newly lifted sanctions, announced a $200 million investment in an aluminum rolling mill in Ashland, Kentucky, in partnership with a local private entity, Braidy Industries. This seems remarkably well timed not only for McConnell but for Governor Bevin as well. In April, 2017, Bevin announced that Braidy would be getting $10 million in tax incentives along with a $15 million up front payment to build this mill. A year and a half later, in September, 2018, Braidy was forced to admit that it could not begin construction until it raised another $400-$500 million in capital. In February, 2019, Braidy sought an $800 million loan from a government program that had not given out a new loan in over eight years. So, needless to say, the investment from Rusal was like Manna from heaven for Braidy, and for Bevin. Even so, the plant still appears to be badly underfunded and, at best, does not expect to be online until 2021.

The second scandal McConnell is now caught up in also involves his wife, Elaine Chao, the current Secretary of Transportation. Chao designated one of her aides, Todd Inman, who had also worked for McConnell’s 2008 and 2014 Senate campaigns, as a special liaison to help marshal Department of Transportation projects for Kentucky. His focus was on specific projects of special interest to Senator McConnell. With Inman’s help, the Transportation agency provided $11.5 million in grants to Owensboro, a longtime McConnell stronghold and Inman’s home town, and a $67 million grant for another McConnell stronghold, Boone County. The Owensboro grant is unusual because the project was turned down twice, once under Obama and once under Trump, before being finally granted after the apparent intervention by Transportation officials prompted by McConnell. McConnell then used that grant as part of the lead-up to the announcement of his 2020 re-election campaign.

Of course, the fact that Chao has designated a special liaison for Kentucky projects where her husband is also a Senator creates some problematic ethical issues for both of them. No other state gets such preferential treatment. But Chao has other ethical problems as well. Most importantly, Chao has apparently been in a brazen breach of the ethics agreement she signed before taking the Secretary’s job that required her to divest her stock holdings in Vulcan Materials, the nation’s largest producer of crushed stone, sand and gravel as well as asphalt and ready-mixed concrete, much of which are used in road construction. Chao had agreed to divest by April, 2018, but instead of cashing out, which is what divestment usually means, she basically swapped her stock for options which she still held as of April, 2019. Vulcan’s stock price rose by over 20% earlier this year when Trump announced his interest in an infrastructure plan in his State of the Union message.

Chao is under a similar ethics cloud for trying to get her family business associates included in her first official trip to China in 2017. Chao’s family business, the Foremost Group, is a shipping company that does extensive business with China and reportedly has received hundreds of millions of dollars in loans from a Chinese bank. A former State Department official deemed Chao’s request to include her family members involved in the shipping business as “alarmingly inappropriate”. The State Department apparently intervened and Chao then cancelled the trip to China entirely.

According to the New York Times, “Since Elaine Chao became transportation secretary, records show, the agency budget has repeatedly called to cut programs intended to stabilize the financially troubled maritime industry in the United States, moving to cut new funding for federal grants to small commercial shipyards and federal loan guarantees to domestic shipbuilders. Her agency’s budget has also tried to slash spending for a grant program that helps keep 60 American-flagged ships in service, and has tried to scale back plans to buy new ships that would train Americans as crew members”. All of that could be seen as an effort to reduce potential competition from the Foremost Group.

Although Chao has no direct investments in the Foremost Group, she and McConnell have received millions of dollars in gifts from her father who ran the company until last year and family members associated with the Group have also donated over a million dollars to McConnell’s campaigns over the years. Most of the McConnell’s now extraordinary wealth, comes from Chao’s father’s “gifts”.

For the most powerful man in the US Senate, it would seem that he should have a lot more pull to provide some pork-barrel spending for his state than having to rely on a mobbed-up Russian oligarch and a special pipeline for projects to his wife. But perhaps that is what it has come to for Senators where a dysfunctional Congress can not produce a real budget and earmarks have been banned since 2011. To an outsider, McConnell’s actions either reek of arrogance or desperation. Based on his character, arrogance would be your first thought, but a look at his approval ratings in Kentucky indicates it might actually be the latter.

A Morning Consult poll conducted at the end of last year shows that McConnell only had an approval rating of just 38%, with 47% disapproving. Another poll sponsored by an anti-McConnell group in February showed only 33% approved and 61% felt it was “time for someone new”. These are pretty horrifying numbers for a Senator with so much power. In contrast, Trump is still very popular in the state, although slipping, with a 55% approval rating and Rand Paul had a 43% approval in the Morning Consult poll, with just 38% disapproving. In order to win in 2020, McConnell will probably need the help of both of them which will probably require him to swallow his pride in the coming months. That certainly could explain his inaction in response to Trump’s illegal end run around the Senate to get Ken Cuccinelli, of whom McConnell singularly expressed his “lack of enthusiasm”, in place as head of the USCIS.

We’ve seen this movie before, however, in 2014. After Alison Lundergan Grimes won the Democratic nomination, the Cook Political Report had the race as a toss-up, largely because of McConnell’s unpopularity. In the summer of 2014, there were even a handful of polls that showed Grimes leading, although still stuck in the mid-40s. Grimes, however, ran an abysmal campaign, botching her rollout and then, late in the race, refusing to answer whether she had even voted for Obama in 2012. Although McConnell never polled above 50% until late in the race, after Grimes had largely imploded, he eventually won handily, with 56% of the vote.

As might be expected, the Democratic bench in Kentucky is a little thin. Chuck Schumer is trying to recruit Amy McGrath, the feisty young Marine combat pilot, who ran a creditable campaign against Republican incumbent Andy Barr in the 6th CD in 2018, losing by under 4%. Waiting in the wings is Matt Jones, a sports radio personality, who is pretty well known commodity in the state. Both of them would run relatively progressive campaigns on health care and taxes but emphasizing fiscal conservatism that McConnell will have some difficulty in defending against considering the enormous corporate tax cut. McConnell will try to paint whichever of them is the Democratic nominee as a wild-eyed lefty who is out of touch with Kentucky voters.

But Mitch doesn’t really have a lot to show for Kentucky, even after two years with total Republican control in Washington. Trump’s tariffs have hurt the state’s steel and aluminum industries, as well as the auto manufacturers in the state. The distilled spirits industry has also been hurt by Trump’s trade wars, as well as Kentucky farmers. McConnell’s inaction on the opiod crisis and the coal miners’ health fund may also be a negative for him. And despite Trump’s bluster, coal is not coming back. For all his power, probably the biggest thing McConnell has delivered since his last election is the legalization of industrial hemp, which has always been an important Kentucky product.

Beating McConnell in any year would be difficult but it is even more so in a presidential election year where Trump will probably be able to rally the conservative base. McConnell is taking few chances, beefing up his political team and already loaded with $4 million for his campaign. Since corruption is the accepted standard in the Trump era, it seems likkely that McConnell’s involvement in those two scandals and his wife’s ethical problems and Chinese connections will simply be brushed off by voters as Mitch bringing home the bacon. But some voters may be turned off by the “swampiness” of it all.

There is certainly no reason for DSCC or the DNC to invest a lot of money in this race. But, as Beto, Warren, Sanders, and even McGrath, have shown, a motivated Democratic grass roots can still provide a lot of money for a specific campaign. Yes, taking down Mitch is probably a pipe dream, but what a sweet dream it would be.


Originally published at https://thesoundings.com on June 12, 2019.