Connecticut | Senate

March 26, 2009

What a difference six years makes. When Democratic Sen. Chris Dodd was gearing up to run for a fifth term in 2003, there was much speculation swirling about his political future. Would Dodd run for President in 2004, or would he stay in the Senate and run for Minority Leader if then-Sen. Tom Daschle relinquished the post to run for President? Six years later, though, the speculation about Dodd’s future is less about his political ambitions than it is about his political survival.

In fact, apart from appointed Sen. Roland Burris, Dodd is the most vulnerable Democrat up for re-election this cycle.

Dodd served in the House from 1974 until 1980 when he won a Senate seat and became a member of an even more exclusive club; his father was a Senator from 1959 until 1970. The younger Dodd’s first race was his closest, but he still took 56 percent. He was re-elected in 1986 with 65 percent and in 1992 with 59 percent. In 1998, he faced former Rep. Gary Franks, who ran a hapless and underfunded campaign. Dodd beat him 65 percent to 32 percent. And, in 2004, Dodd took 66 percent to 32 percent for Republican nominee Jack Orchulli, a wealthy businessman.

As a five-term member of the chamber, Dodd has gained significant seniority and influence. Not only is he chairman of the Banking, Housing and Urban Affairs Committee, but he is the second most senior Democrat on the Foreign Relations and Health, Education, Labor and Pensions Committees. But, it is this same seniority and influence that is largely responsible for Dodd’s current political problems and rank him as one of the most vulnerable Democratic incumbents seeking re-election next year.

While Dodd’s role in allowing the AIG bonuses has shined a bright light on his vulnerability, it is just one of several factors, albeit a very big one, that have made him a top GOP target.

Dodd became chairman of the Banking Committee in January of 2007, at about the time he announced his candidacy for the 2008 Democratic presidential nomination. Both are time consuming tasks and both have caused him political problems at home.

Dodd’s quest for the presidential nomination was a long shot at best. He didn’t have Hillary Clinton’s money or Barack Obama’s organization, and he wasn’t especially well known even among party activists, despite a stint as chairman of the Democratic National Committee in the mid-1990s. What Dodd did have was connections to the financial services industry which enabled him to raise enough money to run a respectable campaign.

The campaign’s strategy was simple: a strong showing in the Iowa Caucuses would provide some momentum to propel Dodd to the next round. Dodd put all his time and energy into Iowa, even moving his family there in October of 2007 and enrolling his daughter in public school. Dodd got less than one percent of the vote in Iowa and dropped out of the race the next day.

While voters certainly don’t hold Dodd’s loss against him, many are unhappy about his temporary move to Des Moines. As the Connecticut Post wrote in an editorial, "How can he identify himself as D-Conn., when he lives in Iowa?"

The presidential campaign does open Dodd up to one other significant charge; in his quest for the nomination, the Banking Committee chairman missed the warning signs of the impending banking crisis. Republicans make the argument that Dodd was asleep at the switch and is thus at least partly responsible for the severity of the crisis. Given that Dodd spent much of 2007 on the campaign trail and the country is enduring the worst financial crisis in decades, it’s not hard to see how voters might buy into this argument without too much convincing.

Revelations about the bonuses for AIG executives and the language in the stimulus bill that allowed them to happen sparked an angry reaction from voters and only served to strengthen Republicans’ case. The language that grandfathered AIG’s bonuses was included in a Dodd-sponsored package to limit compensation for executives at banks that took TARP funds. Dodd’s reaction to questions about how the language found its way into the legislation only made the situation worse.

First, Dodd said that he didn’t know the language was there, which made him look out of the loop. A day later, he said that he did know the language was there, but it was included at the request of the Treasury Department. He further said that he was not aware at the time that the AIG bonuses even existed. Treasury Secretary Tim Geithner did admit that his department had asked for the language. In a third attempt at explaining his role, Dodd said that he misconstrued the original question, and that while he opposed the language, he knew it was there and that the Administration had asked for it because it feared legal challenges. None of these explanations seemed to help Dodd make his case. Instead he came off looking as if he didn’t know what was in the stimulus bill or that he simply did what the administration told him to do without asking questions or considering the implications. The New York Times had little trouble finding Connecticut voters, including some who are unemployed, who are angry at Dodd’s role in the bonus debacle.

Reports that Dodd got $103,100 from AIG executives for his 2008 presidential run (and a total of $280,000 overall since 1990) and received $27,500 in contributions from indicted financier R. Allen Stanford or people related to his company have only added to the controversy. Dodd said he would return any contribution from an AIG executive who received—and kept—a bonus, and he donated the Stanford funds to charity. He had made an earlier promise not to accept PAC contributions from any company that took TARP funds. These are all wise moves, but they are not likely to ease voters’ anger or provide a reason for them to give Dodd the benefit of the doubt.

While the AIG bonus incident serves as a lesson about the dangers of rushing through complicated and far-reaching legislation and excluding the minority from final negotiations on such bills, it has given Republicans a powerful vehicle through which to attack Dodd and his stewardship of the Banking Committee.

The financial crisis may be the most significant argument in the GOP’s case against the incumbent, but there are other examples that they will use to paint Dodd as out of touch with his constituents and a creature of Washington.

The first involves Countrywide Financial, a now-defunct mortgage company that specialized in subprime lending. Dodd refinanced his homes in Washington and Connecticut through Countrywide and was put on a VIP list known as the Friends of Angelo, a reference to Angelo Mazilo, who was then president of Countrywide Home Loans. When the issue came up over the summer, Dodd said he was not given favorable treatment and several months later allowed some reporters to look at documents he said proved that he wasn’t given more favorable rates than were available to the general public at the time. He also said he would refinance the two mortgages with a different lender. Reporters were allowed to look at documents but weren’t permitted to make copies, so while they reported their findings, they didn’t seem satisfied that they had been given time to research and confirm what they had been shown.

Republicans on the House Oversight Committee added a little fuel to the fire when they released a report that said a Countrywide Financial executive "overrode the company's loan-writing policies to give a discount" to Dodd. Republicans did admit, though, that there was "no direct evidence that Dodd was aware at the time that he was getting a discount." The report did say that Dodd “appear[s] to have violated" Senate ethics rules. Dodd’s spokesman disputed the report’s findings and conclusion, pointing to the Senator’s own report that said he got no favorable treatment.

The second involves Dodd’s close friend, Edward Downe, Jr. Downe was convicted in 1993 of tax and securities fraud and fined $11 million. In early 2001 during President Clinton’s last days in office, Dodd asked him to pardon Downe. Despite the fact that Dodd did not send the request through the usual Justice Department channels, Clinton granted the pardon.

Dodd’s relationship with Downe appears to be at the root of a third problem. In 1994, Dodd and Downe’s business partner William Kessinger of Kansas City paid $160,000 for a house on 10 acres of land on the coast of Ireland. Kessinger picked up two-thirds of the cost, or $107,000. In 2002, Kessinger sold his share of the house to Dodd for $122,000, making a profit of $15,000 even though the house is worth considerably more thanks to Ireland’s real estate boom. Dodd’s spokesman said of this and other real estate deals “... these transactions are completely transparent, routine, and noncontroversial.” Voters might not see it that way.

If Dodd doesn’t already have enough difficult problems to address, it is worth noting that he also has never had a competitive race (the presidential primary contest doesn’t really count), and thus has never had to run a modern campaign, something that should concern Democratic operatives.

Even before the AIG bonus story broke, polling showed Dodd in a very precarious position with voters. A Quinnipiac University poll (March 3-8 of 1,238 registered voters) showed Dodd’s job approval numbers at 49-percent approve to 44-percent disapprove, and his favorable/unfavorable ratings at 46 percent to 45 percent. Only 32 percent said they approve of Dodd’s performance as chairman of the Banking Committee compared to 50 percent who disapprove.

A Quinnipiac University poll taken late last year (December 11-15, 2008 of 1,445 registered voters) showed that 44 percent would “definitely” or “probably” vote to re-elect Dodd, while 47 percent would “definitely” or “probably” not vote for him.

Given the material they have to work with, it’s not a big surprise that Republicans have been actively recruiting a first-tier candidate to challenge Dodd. Today, former Rep. Rob Simmons is the only announced challenger. Simmons was an operations officer with the Central Intelligence Agency, worked on the staff of the late Sen. John Chafee, was staff director of the Senate Select Committee on Intelligence and spent a decade in the Connecticut House of Representatives before being elected to the House in 2000. He represented the 2nd congressional district that encompasses the eastern third of the state and includes New London. Before the 2008 election, the district had a Partisan Voting Index score of D+8, meaning that it voted eight points more Democratic than the nation as a whole.

In 2000, Simmons upset longtime Democratic Rep. Sam Gejdenson, 51 percent to 49 percent, and earned a permanent place on Democrats’ target list. In 2002, Simmons defeated Democrat Joe Courtney, 54 percent to 46 percent, and in 2004, he beat Jim Sullivan by the same margin, even as Democratic presidential nominee John Kerry won the district with 54 percent. Simmons wasn’t so lucky in 2006 when he faced Courtney in a rematch. This time, Courtney won the race by 83 votes.

Simmons announced his candidacy on March 15, saying that he planned to raise $5 million for the race. Democrats immediately attacked him, saying that Simmons is not the moderate he claims to be. They also linked him to Bush’s policies, as well as to convicted lobbyist Jack Abramoff and former House Majority Leader Tom DeLay. While Democrats will certainly be able to cherry pick votes, Simmons did accumulate a very centrist record in his six years in the House.

A number of other candidates are looking at the race, including businessman Thomas Foley, who served as Ambassador to Ireland from October 2006 until this past January. Foley has hired the Tarrance Group to test the viability of his candidacy. State Sen. Sam Caligiuri is also looking at the race. Finally, there is an effort to draft Peter Schiff into the GOP primary. He has been an adviser to Rep. and GOP presidential candidate Ron Paul, and has logged a lot of cable airtime as an opponent of federal bailouts and the stimulus legislation.

Whether any of these candidates actually gets into the race is unknown, but polling shows that Simmons would be a very competitive candidate. In the early March Quinnipiac poll, Simmons and Dodd were statistically tied in a general election match-up, with the Republican ahead by a point, 43 percent to 42 percent. Dodd bested Caligiuri, 47 percent to 34 percent.

As bad as things look for Dodd, he does have some real advantages in the race. Connecticut is a solid blue state. In fact, it is the sixth most Democratic state in the nation, according to Gallup. Although Republicans control the governorship, Democrats hold all five House seats and hold majorities in both chambers of the state legislature by comfortable margins. Despite his self-imposed rules that will limit his ability to raise money from the financial services industry, Dodd should be able to raise the necessary campaign funds, though it may take a lot more effort. Finally, he starts the race with a united Democratic Party and a popular President behind him. Dodd’s colleague, Sen. Joe Lieberman, has endorsed him and has come to his defense on the AIG bonus issue. While normally such an endorsement should be expected, Dodd supported the Democratic nominee over Lieberman when he ran for re-election as an independent in 2006, and some observers wondered whether Lieberman would return the favor.

Despite recent speculation that Dodd may decide to retire, he insists that he will seek a sixth term. As long as he does, he is guaranteed to face a competitive and bruising campaign. At the same time, it is possible that Dodd could look at his poll numbers and his cash-on-hand balance in a couple of months, and decide to retire. This, of course, is Republicans’ biggest fear. They have a 50-50 shot at beating Dodd, but the GOP nominee would be an underdog against a generic Democratic candidate.

We have had the race in Likely Democratic, largely because of Connecticut’s strong Democratic tilt and the absence of an announced GOP challenger. The AIG bonus fiasco and more recent poll numbers, coupled with Simmons’ announcement, have earned Dodd a move to the Toss Up column.