April 25, 2006
Washington, D.C.
Vol. 41, No. 9a

Return to  World Observer

To: Our Readers


      1) While Democrats remain optimistic about regaining both houses of Congress, Republicans are a little less stressed -- mainly as a result of the special election in the California 50th Congressional District to replace disgraced felon Randy "Duke" Cunningham (R). It resulted in a runoff as expected, but the majority of Republican voters held despite the scandal.

      2) The principal political issue is now $3-per-gallon gasoline, leading President George W. Bush and the Republican leadership to sound like Democrats in attacking the market-driven price. As usually happens when Republicans betray principles, the political result is likely to be disappointing.

      3) President Bush has made a calculated decision to stand by Donald Rumsfeld as secretary of Defense, and that aligns him against more than a half-dozen dissenting retired generals. Dissatisfaction with Rumsfeld over the way the war has been fought runs deep through the Army officer corps.

      4) The dismissal of Mary McCarthy from the CIA for talking to the press (after contributing to John Kerry's presidential campaign) reflects deep-seated anti-Bush sentiment in the agency that Director Porter Goss has attempted to root out.

      5) Returning to Washington after the long Easter recess, the Republican majority in Congress faces the disorderly mess they left. In the House, Majority Leader John Boehner (R-Ohio.) will try to pass the budget resolution that was derailed by the rebellion of Appropriations Committee Chairman Jerry Lewis (R-Calif.). In the Senate, Majority Leader Bill Frist (R-Tenn.) will try to get back to judicial confirmations.

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Judicial Nominations: After months of laying off the judiciary issue, the Senate is now expected bring up the judicial nominations of D.C. Circuit Court nominee Brett Kavanaugh and 4th Circuit nominee Terrence Boyle. Republicans hope to hold votes that will put political pressure on key Democrats. The strategy of filibustering judicial nominations has been disastrous for Democrats so far, and in key Senate races -- especially in heartland states such as Minnesota, Michigan and Ohio -- their intransigence could be a good issue for Republicans, even if confirmations prove impossible.

Sarbanes-Oxley: Republican senators, hoping to reform the Sarbanes-Oxley law so that it is less burdensome for businesses, are courting Evan Bayh (D-Ind.) to co-sponsor a bill that would loosen the law's audit requirements for small and medium-sized businesses. Bayh is respected among Democrats, holds a seat on the Banking Committee and is running for President. By participating in this tweaking of the Sarbanes-Oxley law, he would reassure the business community that he is a friend.

       The bill, to be proposed by Sen. Jim DeMint (R-S.C.), represents an attempt to gather the low-hanging fruit of Sarbanes-Oxley reform rather than attempt a comprehensive reform or repeal. The idea is to provide guidelines for audits that will cut back on the expense of a comprehensive audit, as well as to let small and medium-sized companies (below $700 million in market capitalization) opt out of the onerous Section 404 and instead participate in an alternative set of rules.

      Of particular concern is the dramatic shift by foreign companies away from going public in the United States and, instead, toward raising their investor capital in foreign countries. The Wall Street Journal has reported that whereas nine of every 10 dollars raised by foreign companies in 2000 was raised on the New York exchanges, nine of 10 in 2005 were raised outside the United States. Although this has partly to do with the increasing sophistication of foreign exchanges, it has mostly to do with Sarbanes-Oxley.

State of the Parties:

      The Washington Post recently ran a piece highlighting the fact that the Democrats' Congressional Committee is at parity with the Republicans in cash on hand and that their Senatorial Committee has doubled up the NRSC in cash on hand (although the two have raised about the same amount).

      This is all true, and it is not good for Republicans. However, there has been some exaggeration as to just how bad it is.

       The committees' success is partly, but not entirely, the result of Democratic fundraising prowess. It has just as much to do with the fact that the Democratic National Committee under Howard Dean is becoming an institution with which many Democratic donors will not entrust their cash.

       Whereas Republican committees are actually competing with the high-dollar RNC (which raises more than half of all GOP committee cash), the Democrats have no such competition from Dean (whose committee has raised less than 40 percent of the Democrats' committee cash). The DNC in March (see chart) raised less than either of the two other committees -- itself an historical oddity.

       That is not to say that this is a bad thing for Democrats. Indeed, the DNC has been notoriously ineffective in the last three election cycles, essentially the plaything of whoever has headed it, without a clear aim toward helping the party win elections. This hasn't all been Dean's fault -- recall the millions Terry McAuliffe spent trying to topple Gov. Jeb Bush (R) in Florida in 2002 and on other futile races.

       The DCCC and DSCC, headed by members of the House and Senate, appear more motivated to improve the party's situation in those bodies. They are also safe places for Democratic supporters of Israel, wary of Howard Dean, to send their money.


Party Committee Fundraising, Jan. 1, 2005 through March 31, 2006


Mar. 2006

Through Mar. 2006

Total Spent

Cash Mar. 31




















Democrats Total
























Republicans Total






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Governor 2006:

Nebraska: Betting against Rep. Tom Osborne (R) in Nebraska is akin to betting against Saint Patrick in Ireland. Yet even the latter had his setbacks, and we expect one for Osborne on May 9 primary day that will likely end his political career.

       There is a significant amount of resentment over the former football coach's decision to run for governor against a popular incumbent from his own party. There are no major issues in the race that particularly recommend a change of horses, beyond Osborne's wild popularity throughout the state thanks to his years of coaching the Cornhuskers.

       Osborne's run therefore smacks of vanity. Many believe that it results mainly from his own well-known weariness with being a congressman. Moreover, many Nebraskans feel Osborne is too old for the job. If victorious, he would turn 70 within a month of taking the oath of office. On the other hand, the primary in his district to replace him will drive up turnout in his part of the state, which could help him.

       Gov. Dave Heineman (R), who replaced Gov. Mike Johanns (R) after he was named secretary of Agriculture, has pleased all the right people and has received positive press lately. He and Osborne are in a dead heat as the election approaches, which is already a bad sign for Nebraska's most revered resident. It's not likely that Osborne will suddenly enjoy a late surge, given that everyone knows who he is and likes him already. The only way for Osborne to win is for Heineman to make a tremendous gaffe.

       The most recent published survey, which puts Heineman one point down, is of "registered" and not "likely" Republican voters -- which misrepresents the electorate in a way that likely overstates Osborne's support.

       Compound this with the fact that the quixotic third candidate, Dave Nabity (R) may break into double digits. Nabity was recently endorsed by a farmers' group (a harmless endorsement for them, since he has no chance of winning) that is spending money to put him on the air. Their actual goal is to use the Nabity campaign as a front to push a local water issue. Leaning Heineman.

Ohio: Secretary of State Ken Blackwell (R) enters the final week with a double-digit lead over his rival, Atty. Gen. Jim Petro (R), in the race for the GOP nomination for governor.

       Blackwell has successfully distanced himself from the hugely unpopular Gov. Bob Taft (R) and tried to cast Petro as a Taft ally with similar ethics problems. To the extent that it has involved advertising, the campaign has been hugely negative. But it has taken on a surprisingly low profile -- probably an effort by both candidates to keep themselves viable for what promises to be a tough general election.

Blackwell's real strength is in his grassroots support. Leaning Blackwell.

Rep. Ted Strickland (D) is the easy favorite for the Democratic nomination. Likely Strickland.

House 2006:

Nebraska-3: State Sen. Adrian Smith must be considered the frontrunner in the race for the Republican nomination to succeed Rep. Tom Osborne (R) in the Western half of Nebraska district. He faces Osborne aide John Hanson and Grand Island Mayor Jay Vavricek. The latter supposedly has money to put into his campaign, but has been loath so far to use it. Smith has raised the most money, and he is by far the most active of the three top candidates right now. The primary is May 9. Leaning Smith.

Ohio-2: Rep. Jean Schmidt (R) suffered another blow when the Ohio Elections Commission rapped her for claiming an extra bachelor's degree last year that she does not in fact hold. Based on her abysmal 2005 campaign for the seat, we would have little confidence in her ability to keep the seat.

      Still, her primary election opponent, former Rep. Bob McEwen (R), is weighed down by his own ethics problems, which go beyond his involvement in the House Banking Scandal in the early 1990s. Now he is facing problems related to his voter registration: He has voted in Ohio for years since leaving Congress, despite living in Virginia. This issue has legs, and it blindsided McEwen, who has handled it very badly. Perhaps less damaging, but still problematic, is the new revelation that he lobbied for the quasi-Marxist government of Eritrea.

       We had expected McEwen to make greater strides by this time, particularly given Schmidt's repeated episodes of self-destructive behavior nearly every week of the campaign. But we see little evidence of this beyond a McEwen-sponsored poll that puts him within the margin of error.

       Public polling seems to confirm the picture of the race painted by Schmidt's campaign, in which she leads by more than 20 points. It seems odd for Schmidt to poll at above 50 percent when her name identification within the district is barely that high.

       Schmidt barely won her seat last year after surviving a crowded special election primary by no virtue of her own, and then pulling off an underwhelming victory against trial lawyer Paul Hackett (D) after an uninspiring campaign. From those depths, and then her embarrassing derision of Rep. Frank Murtha (D-Pa.) for supporting withdrawal from Iraq, Schmidt has risen to receive the endorsement of the Cincinnati Enquirer and enters the final week as the favorite. Leaning Schmidt.

Ohio-4: Frank Guglielmi (R), a Taft ally, has poured more than $1 million into his own campaign in an attempt to secure for himself the Republican nomination for the seat of retiring Rep. Mike Oxley (R). The winner of the primary will easily win the general election.

      The early frontrunner was State Sen. Jim Jordan (R), a conservative with backing from the Club for Growth. This one is going to come down to the wire, though, as Guglielmi blankets the airwaves with commercials -- some powerful, some strange, like the one in which his family sings a song with his name in it to help voters pronounce it correctly. Leaning Guglielmi.

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Ohio-6: The Democratic primary here is heading for a wild finish May 2, as State Sen. Charlie Wilson (D) seeks to get enough voters to write him in as a candidate. Wilson failed to qualify for the ballot because he did not obtain 50 valid signatures from voters within the district. The other two Democrats, whose names actually are on the ballot, would have no chance were it not for Wilson's signature fiasco.

      The NRCC began running ads against Wilson this month in a strategy calculated to remove this race from the national map in November. The ads attack Wilson for involvement in dumping raw sewage into the Ohio River when he served as president of the East Ohio Regional Water Authority (EORWA). The Republicans' strategy is to make Wilson's name synonymous with raw sewage.

       Meanwhile, the onus is on Wilson to find approximately 20,000 write-in votes and win the Democratic nomination. Because his name does not appear on the ballot, Wilson will need to educate voters about the write-in process and then pump up turnout. The Republicans' negative ads against him do help his name recognition, but they will also drive down turnout.

       This election is so unusual that it is difficult to say how it will turn out. It is very hard to win a write-in campaign, but Wilson's primary opponents on the ballot are abject losers who have barely spent a dime on the race. A big Wilson win turns into a public relations victory, although it will also drain his campaign coffers. It has already forced national Democrats to spend far more money here than they had intended, even commissioning a country-western singer to create a jingle that will remind voters to write in Wilson's name. Likely Wilson.

       If Wilson loses the primary, Republican Chuck Blasdel will easily pick up this seat of Rep. Ted Strickland (D), who is running for governor. He will win the nomination on May 2 without any trouble. Certain Blasdel.

Ohio-13: Republicans have little business competing in a district like this one, where John Kerry took 56 percent of the vote in 2004. But they are curiously sanguine about their prospects this year because of the unruly Democratic field, and the possibility that 28-year-old shopping mall heiress Capri Cafaro (D) could spend enough money to run away with the Democratic nomination. She has already put $1.2 million into her campaign, she has the support of the United Auto Workers and the National Rifle Assn. and she has been running ads for months.

      As next week's primary approaches, former Rep. Tom Sawyer (D), who began as the frontrunner on name recognition, is short of cash and lacks a visible campaign or even a website. He is apparently doing nothing to win the race, instead content to coast to defeat and act as a spoiler. Sawyer is also still remembered for his support of NAFTA, which angered many constituents. Two weeks out, the polls showed Sawyer with a slight lead, but the two liberals in the race were turning their guns squarely on him.

       The EMILY'S List candidate State Rep. Betty Sutton (D) is struggling to gain traction after beginning at the bottom in name recognition, and at this point she and Gary Kucinich (brother of neighboring Democratic Congressman Dennis Kucinich) appear to be splitting the liberal vote right down the middle. Sutton came out with a poll that shows her barely in second place, but this must be taken with a grain of salt.

       Not only is Cafaro the candidate of the NRA, she is also the candidate Republicans believe will be the easiest to defeat -- probably the only one in the field they could beat in a district like this one. She ran a lackluster campaign in 2004 against neighboring Rep. Steven LaTourette (R), and her grant of prosecutorial immunity in exchange for testimony in the trial of former Rep. James Traficant (D) remains mysterious. Only if she wins will Lorraine Mayor Craig Foltin (R) have a chance in November.

       The winner in this race can probably do the job with as little as 25 percent, or perhaps slightly more. Unless Sawyer miraculously maintains his current support level with his "inertia campaign," either Cafaro or Sutton will overtake him. Leaning Cafaro.

 Robert D. Novak
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