How your mortgage with First Citizens Bank helped pay for a seat in Congress | The Election Page | Indy Week

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How your mortgage with First Citizens Bank helped pay for a seat in Congress


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Born of humble means in Smithfield, First Citizens Bank now stretches from coast to coast. It reports assets worth $21 billion. Rather than collapse during the financial epidemic that wiped out other big banks, it expanded. No wonder, then, its principal owners can afford a seat in Congress.

They bought it for one of the bank's third-generation heirs, former U.S. Attorney George Holding. With big money on his side, Holding made light work of two well-known primary opponents, including longtime Raleigh politician Paul Coble. Holding is almost mathematically certain to do the same in November with his Democratic opponent, Charles Malone.

Holding's victory exemplifies the effect of a 2010 Supreme Court case, known as Citizens United, which allows corporations, unions and people to give unlimited amounts of money to a political cause, while remaining anonymous. The money can't go directly to a campaign, but it can go to an outside group, such as a Super PAC, which can spend money on a candidate's behalf.

Coble, a former Raleigh mayor and current county commissioner, was the early favorite. His campaign released a poll in September 2011 that showed him with 32 percent of the vote, Randall with 13 percent and Holding with just 12.5 percent. Five months later, in February, one of Holding's strategists wrote in a blog post that Coble still had an edge in name recognition.

Even then, Coble was being outspent—Holding personally loaned his own campaign $325,000, which is more than Coble raised in total—but the race was still close.

That's when three of Holding's lawyer-friends created a Super PAC, American Foundations Committee (AFC), and his banking family members poured in nearly half a million dollars—money that could buy ads to flood the airwaves.

"It made all the difference in the world," says David McLennan, a political science professor at William Peace University. "That race was relatively close until the very end. If they both had only used their own funds, we may have had a very different outcome."

Initially, it wasn't clear who was financing AFC. Coble himself thought that it was lawyers. But once the Super PAC began disclosing donors, it was clear that the money was all in the family.

Frank Holding Sr., George's uncle, is the only living second-generation member of the banking family. He, his wife and two other family members gave $100,000 each to the Super PAC, according to campaign finance records. Scattered other family members made donations in the tens of thousands.

After two months of non-stop TV ads leading up to the May 8 primary, Holding beat Coble by double digits. Since then, AFC has not raised any funds, indicating North Carolina's 13th Congressional District, redrawn to favor the GOP, is a safe bet for Republicans.

Outside spending groups like AFC operate under one major stipulation: They can't coordinate their tactics with the candidates. But it would be virtually impossible to prove if they did. In Holding's case, his campaign manager, Tucker Knott, is the son of one of the Super PAC founders, Joe Knott.

"It's hard to imagine that there wasn't coordination with Holding, because it was his family that gave the money," says 13th District Rep. Brad Miller, who is retiring after being doublebunked with fellow Democrat David Price in the 4th District.

Holding and his campaign manager did not respond to the Indy's requests for comment.

Super PACs are swiftly reshaping the dynamics of democracy. And it's down-ballot races where outside spending can change outcomes.

"We may have been among the very first to figure out you could do it in a congressional race," says Palmer Sugg, a founding member of AFC. "Now you've got Paul Newby's [Super PAC] for Supreme Court and lord knows how many others who have figured it out."

The down-ballot races are easy to swing, because they don't get much media attention. In such races, voters are more likely to be influenced by advertising—rife with political spin—which few candidates can afford.

AFC, for instance, ran ads depicting Coble as a big-spending liberal on the Wake County commission. While some of the numbers used in the ads were true, Coble is hardly a liberal. He wouldn't even let voters consider raising taxes when he blocked a transportation tax from going to referendum earlier this year.

Nonetheless, messaging prevails. Holding "had a consistent message. He repeated it. And it made its way into the Republican psyche," says Jonathan Kappler, research director of the NC Free Enterprise Foundation.

In a YouTube video, Sugg is candid about the impact of big spending. "Super PACs have already disposed of one person in the Republican presidential primary," he says. "[Newt] Gingrich has been wiped off the map by Romney's Super PAC."

As for the Coble-Holding race, Sugg said the two races can't be compared but conceded, "If you go back and look at when people made up their minds, they made up their minds near the end when [Holding] was on broadcast TV instead of cable. If you can afford it, it makes a big difference."

Sugg is unfazed by the fact that money can swing an election. "The people who believe in campaign limits have a reasonable position. I just disagree. I believe money is a form of speech."

Rep. Miller believes the future of democracy is at stake. "Given the shift in economic and political power to a small number of people and the Citizens United decision, reformers and progressives will have to find new ways to reach the voters or they will be swamped by the people with the real money."

This article appeared in print with the headline "All in the family."


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