CategoryFederal

McGarvey defeats Scott for Democratic nomination in Kentucky’s 3rd Congressional District

Morgan McGarvey defeated Attica Scott in the Democratic primary for Kentucky’s 3rd Congressional District on May 17, 2022. As of 11:45 a.m. ET on May 18, McGarvey had received 63% of the vote and Scott had 37%. Incumbent Rep. John Yarmuth (D)—first elected to represent the district in 2006—did not run for re-election. This is the first open-seat race in the Louisville-area district since 1994. 

McGarvey is a member of the Kentucky State Senate, having first been elected to the legislature in 2012, and has served as the Democrats’ minority leader since 2019. McGarvey described himself as a champion of progressive values and said on his website, “As the Democratic Minority Leader in the Kentucky State Senate, I’ve spent my career standing up to the Trump-Bevin Republicans in Frankfort. I’ve stood firm on our progressive values to protect health care and teachers’ pensions, promote clean energy and defend choice so that Kentucky doesn’t look like Texas.” McGarvey announced he was running for this seat on the same day that Yarmuth said he would not run for re-election.

Scott served on the Louisville City Council from 2011 to 2014 and as a member of the Kentucky House of Representatives since 2016. At the time of her election to the legislature, she was the first Black woman to win such an office in 20 years.

According to campaign finance reports through April 27, McGarvey raised $1.5 million and spent $1.1 million. Scott raised $236,000 and spent $196,000.

University of Kentucky political science professor Steve Voss told the Louisville Courier-Journal in February 2022 that “Democrats have close to a 2-1 advantage over the GOP in terms of voters’ party registration in this congressional district.” As of May 2022, three independent outlets rated the general election as Solid Democratic. In the 2020 presidential election, Joe Biden (D) defeated Donald Trump (R) in Kentucky’s 3rd, 60% to 38%.

McGarvey will face the winner of the district’s Republican primary in the Nov. 8 general election.

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Foushee wins Democratic primary for North Carolina’s open 4th Congressional District

State Sen. Valerie Foushee defeated Durham County Commissioner Nida Allam, Clay Aiken, and five other candidates to win the Democratic primary for North Carolina’s open 4th Congressional District on May 17, 2022.

Incumbent Rep. David Price (D)—first elected in 1986, defeated in 1994, and re-elected in 1996—did not seek re-election. This is the first year the 4th District had been open since Rep. Nick Galifianakis (D) left office in 1972, though district lines have changed due to redistricting.

Foushee was first appointed to the North Carolina Senate in 2013 after serving in the state House. Before that, Foushee served on the Orange County Board of Commissioners from 2004 to 2012 and had been a member of the Chapel Hill-Carrboro City Schools Board of Education.

Foushee emphasized her experience during the primary, saying “she has stood up to radical Republicans when they have attacked a woman’s right to choose, targeted our immigrant communities, and attempted to strip North Carolinians of their voting rights.”

The Assembly‘s Jeffrey Billman said that, along with satellite spending, “Including what candidates have raised themselves, the contest is the most expensive Democratic congressional primary in North Carolina history.”

Foushee and Allam both raised over $800,000 as of April 27. Additionally, eight organizations contributed $3,828,804 in satellite spending, according to Open Secrets. Most of the satellite spending—90%—went toward supporting Foushee with the remaining 10% supporting Allam.

The largest satellite spenders were:

  • United Democracy Project: an affiliate of the American Israel Public Affairs Committee. The group spent $2,128,194 supporting Foushee.
  • Protect Our Future PAC: a political action committee funded by Sam Bankman-Fried, the founder of FTX, a cryptocurrency exchange. The group spent $1,040,133 supporting Foushee.
  • Working Families Party: a spending arm of the political party by the same name. The group spent $310,640 supporting Allam.

Following redistricting, the 4th District was drawn to include portions of North Carolina’s Research Triangle. As of 2022, the district had the largest percentage of voters between the ages of 18 and 29 (27%) and the largest percentage with a bachelor’s degree (52%) in North Carolina. Three independent race forecasters rated the general election as Solid or Safe Democratic.



Wiley Nickel defeats four other candidates in North Carolina’s 13 District Democratic primary

Wiley Nickel defeats four other candidates in North Carolina’s 13th District Democratic primary

Wiley Nickel won the May 17 Democratic primary for North Carolina’s 13th Congressional District. Five candidates were on the ballot. Incumbent Rep. Ted Budd (R) announced on April 28, 2021, that he would not seek re-election and instead run for U.S. Senate.

Nickel had served in the North Carolina State Senate representing District 16 since 2019. He also worked as a criminal defense attorney. Before his election to public office, Nickel worked in several district attorney offices and in the White House as advance staff for former President Barack Obama (D). Nickel described his candidacy, saying, “I’ve seen the power of a nation’s hope. I’ve also seen the hard work it takes to make real change. I’m proud to be running on my strong record of work on climate solutions, wealth inequality, and human rights as a North Carolina State Senator.”

Jamie Campbell Bowles (D), Nathan Click (D), Denton Lee (D), Sam Searcy (D) also ran.

The district lines of North Carolina’s 13th changed substantially after redistricting, with the new district containing none of the old 13th district. According to FiveThirtyEight, the old 13th district had an R+38 lean, while the new district has an R+3 lean.

The News & Observer’s Danielle Battaglia described the new district, saying, “Only one district of North Carolina’s congressional map is a swing district, one that’s considered viable for either a Republican or Democrat to win. It’s the 13th Congressional District, and it encompasses all of Johnston County, the southern portion of Wake County, and parts of Harnett and Wayne counties.”

Nickel will face Bo Hines (R) in the November general election. As of May 2022, three independent outlets rated the 2022 general election as a Toss-up.



Madison Cawthorn loses re-election bid in NC-11 to state Sen. Chuck Edwards

State Sen. Chuck Edwards won the May 17 Republican primary for North Carolina’s 11th Congressional District. Eight candidates were on the ballot. Based on unofficial returns, Edwards received 33.4% of the vote while incumbent Madison Cawthorn received 31.9% of the vote.

Cawthorn is the third U.S. Representative to lose a primary this year. Rep. David McKinley (R-W.V.) lost a Republican primary to Rep. Alexander Mooney after the two ran in the same district following redistricting, while Rep. Bob Gibbs (R-Ohio) remained on the ballot after he unofficially withdrew from his re-election race.

Cawthorn was first elected to Congress in 2020. Cawthorn’s campaign website identified him as an America First candidate, a term often associated with the platform of former President Donald Trump (R) and candidates who say they support Trump’s agenda. Cawthorn said that groups from across the political spectrum want to defeat him: “the radical left, the establishment, and the media want to take me down . . . I won’t stop fighting. I won’t bow to the mob. They want to silence the America First movement. I’m not going anywhere.”

Edwards was first elected to the North Carolina State Senate in 2016. Edwards told Jewish Insider that although he supported Cawthorn and wanted him to succeed, Edwards “feel[s] that Western North Carolina can do better.” Edwards accused Cawthorn of increasing political tensions and criticized Cawthorn for suggesting supporters threaten House members to overturn the 2020 election results. Edwards contrasted his legislative experience to Cawthorn’s, highlighting in particular sponsorship of a bill that banned sanctuary cities in North Carolina and working on the state’s balanced budget.

Trump endorsed Cawthorn for re-election on March 31, 2021. Following Cawthorn’s claims in late March 2022 that lawmakers in Washington use cocaine and hold orgies, Sen. Thom Tillis (R-N.C.) endorsed Edwards. Tillis said Cawthorn “has fallen well short of the most basic standards Western North Carolina expects from their representatives.” Cawthorn, who said his claims were exaggerated, also drew criticism from House Minority Leader Kevin McCarthy (R-Calif.) for the remarks.

Edwards is expected to win the Nov. 8 general election. At the time of the primary election, three independent race forecasters rated the general election either Safe Republican or Solid Republican. At the time of the primary, the 11th Congressional District contained all or parts of 15 counties in western North Carolina, including the city of Asheville.

Also running in the primary were Matthew Burril, Rod Honeycutt, Wendy Nevarez, Bruce O’Connell, Kristie Sluder, and Michele Woodhouse.



New Jersey sees the most candidates running for the U.S. House since at least 2014

The filing deadline for candidates running for Congress in New Jersey this year was April 4, 2022. Fifty-five candidates are running for New Jersey’s 12 U.S. House districts, including 20 Democrats and 35 Republicans. That’s 4.58 candidates per district, more than the 4.17 candidates per district in 2020 and the 4.08 in 2018.

Here are some other highlights from this year’s filings:

  • This is the first election to take place under new district lines following the 2020 census. New Jersey was apportioned 12 districts, the same number it was apportioned after the 2010 census.
  • The 55 candidates running this year are the highest number of candidates running for New Jersey’s U.S. House seats since at least 2014, when 45 candidates filed.

  • Rep. Albio Sires (D) is retiring, making the 8th district the only open seat this year. That’s one more than in 2020, when there were no open seats, and one less than in 2018, when the 2nd and the 11th districts were open.
  • Nine candidates — seven Republicans and two Democrats, including incumbent Rep. Tom Malinowski (D) — filed to run in the 7th district, the most running for one seat this year. That’s two more than in 2020, when seven candidates ran in the 2nd district, and one less than in 2018, when 10 candidates ran in the 11th district.  
  • There are six contested Democratic primaries this year, the lowest number since 2016, and 10 contested Republican primaries, the most since at least 2014. 
  • Five incumbents — all Democrats — are not facing any primary challengers this year. That’s one more than in 2020, when four incumbents did not face any primary challengers. 
  • Candidates filed to run in the Republican and Democratic primaries in all 12 districts, so no seats are guaranteed to either party this year. 

New Jersey and six other states — California, Iowa, Mississippi, Montana, New Mexico, and South Dakota — are holding primary elections on June 7. Winners in New Jersey primary elections are determined via plurality vote, meaning that the candidate with the highest number of votes wins even if he or she did not win more than 50% of votes cast.

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North Dakota sees the lowest number of candidates running for the U.S. House since 2016

The filing deadline for candidates running for Congress in North Dakota this year was April 11, 2022. Two candidates are running for North Dakota’s one U.S. House seat, the lowest number since 2016 (when there were also two candidates). Three candidates ran in 2020, and five candidates ran in 2018. 

Here are some other highlights from this year’s filings:

  • Because it has only one U.S. House seat, North Dakota did not need to redistrict after the 2020 census.
  • Incumbent Kelly Armstrong (R) is running for re-election. He was first elected in 2018 after Kevin Cramer (R) retired to run for the U.S. Senate.
  • Kelly is the only candidate who filed to run in the Republican primary, and Mark Haugen is the only candidate who filed to run in the Democratic primary, making this year the first election cycle since 2016 in which there are no contested primaries. Two candidates ran in the Democratic primary in 2020, and four candidates ran in the Republican primary in 2018.

North Dakota and three other states — Maine, Nevada, and South Carolina — are holding primary elections on June 14. In North Dakota, the winner of a primary election is the candidate who receives the greatest number of votes, even if he or she does not win an outright majority of votes cast.



Mike Flood wins Republican primary in Nebraska’s 1st Congressional District

With 76% of the vote, state Sen. Mike Flood defeated four other candidates on May 10 to win the Republican nomination for Nebraska’s 1st Congressional District. This was the first contested Republican primary in the district since 2014 and the first after former incumbent Jeff Fortenberry (R) was found guilty in a federal campaign finance investigation.

When Flood entered the race, Fortenberry was the district’s incumbent seeking re-election to a ninth term while awaiting trial for the federal charges. On March 24, Fortenberry was found guilty and on March 31, he resigned from Congress. Since the deadline had passed to withdraw from the primary, Fortenberry’s name remained on the ballot, and he placed second with 8% of the vote.

Before Fortenberry’s conviction, the Lincoln Journal Star‘s Don Walton described the primary as “the first bigtime GOP primary battle in the eastern Nebraska district since … 2004.”

During the primary, Flood highlighted the charges against Fortenberry, saying, “If our nominee has to focus on beating felony criminal charges instead of defeating a serious Democrat opponent, we risk defeat in November.” Flood also promoted endorsements he received from Gov. Pete Ricketts (R) and former Gov. Dave Heineman (R).

Fortenberry’s resignation created a vacancy that will be filled in a June 28 special election to serve out the remainder of the term. Flood is the Republican nominee in that race against state Sen. Patty Pansing Brooks (D). The two will then face off again in the November 8 general election for a full term.

Race forecasters rate the general election contest in the Lincoln-area district as Solid or Safe Republican.



South Carolina sees the highest number of contested Republican primaries since at least 2012

The filing deadline for candidates running for Congress in South Carolina this year was March 30, 2022. Twenty-eight candidates are running for South Carolina’s seven U.S. House districts, including nine Democrats and 19 Republicans. That’s four candidates per district, more than the 2.86 candidates per district in 2020 and less than the 6.14 in 2018. 

Here are some other highlights from this year’s filings:

  • This is the first election to take place under new district lines following the 2020 census. South Carolina was apportioned seven districts, the same number it was apportioned after the 2010 census.
  • All incumbents are running for re-election, meaning there are no open seats this year. The only years to feature open seats between 2012 and 2022 were 2018, when the 4th district was open, and 2012, when the newly-drawn 7th district was open. 
  • There are two contested Democratic primaries this year, the lowest number since 2016, and four contested Republican primaries, the highest number since at least 2012.
  • Eight candidates — one Democrat and seven Republicans, including incumbent Rep. Tom Rice (R) — filed to run in the 7th district, more than in any other. That’s three less than the highest number of candidates who ran for a seat in 2020, when five candidates ran in the 1st district. 
  • There are three districts — the 2nd, the 3rd, and the 5th — where incumbents do not face primary challengers. 
  • One district — the 3rd — is guaranteed to Republicans because no Democrats filed. No districts are guaranteed to Democrats because no Republicans filed.

South Carolina and three other states — Maine, Nevada, and North Dakota — are holding primary elections on June 14. A primary candidate must win a majority of the vote in order to be declared the winner in South Carolina. If no candidate wins a majority of the vote, the top two finishers will advance to a June 28 runoff.

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Economy and Society: ESG Task Force issues first enforcement action

Economy and Society is Ballotpedia’s weekly review of the developments in corporate activism; corporate political engagement; and the Environmental, Social, and Corporate Governance (ESG) trends and events that characterize the growing intersection between business and politics.

ESG Developments This Week

In Washington, D.C.

Wall Street Journal notes opposition to SEC’s rapid rule-making, including among Democrats        

Two weeks ago, The Wall Street Journal’s editorial board published a piece that highlighted objections to what it described as rapid rule-making at the SEC under Chairman Gary Gensler. It noted that even some Democrats have been frustrated by the tactics Gensler has employed:

“Progressives lobbied President Biden to appoint Gary Gensler as Securities and Exchange Commission Chairman because of his record as a hell-for-leather financial regulator during the Obama days. But now even some House Democrats are asking the Chairman to tap the brakes.

“We write to express concern over some of the Securities and Exchange Commission’s comment periods for complex rulemakings that may hamper the ability for the public to provide effective and meaningful input,” 47 House Members, including 28 Democrats, wrote Mr. Gensler recently. They cite two new proposed rules that would expand SEC control over private markets.

One rule would impose stringent disclosure requirements for fees, expenses and annual independent audits on private fund advisers that are similar to those for public advisers. A second would require private funds to report more information to the SEC about investment losses, among other things, supposedly so the agency can monitor systemic financial risks….

The rule-makings aren’t exactly beach reading and will require teams of lawyers and analysts to sort through their implications. Yet Mr. Gensler provided a mere 30 days for public comment. “This abbreviated period will likely hinder engagement from Congress, investors, and other market participants,” the House Members write.

House Members want Mr. Gensler to extend the public comment period to at least 90 days, which was the norm for highly complicated rules during previous administrations. The Office of the Federal Register suggests that agencies may provide up to 180 or more days for “complex” rule-makings. Mr. Gensler’s drive-by regulation seems to be a pattern.

Energy companies this week also asked Mr. Gensler to extend the 60-day public comment for a proposed 506-page climate disclosure rule, which would require businesses to report their greenhouse gas emissions including those of their suppliers and customers. “SEC should give the public ample time to consider the full impacts of this wide-ranging rule designed to deny financing to the energy sources that meet 80% of global demand now and well into the future,” they write.

Under the Administrative Procedure Act, agencies must take into account public comments. If they disagree with the comments, they have to explain why. A short public comment period will mean fewer detailed comments, which will let the agency finalize the proposals faster with few changes.

The SEC has undertaken more than 50 rule-makings that would affect nearly every investor and public company in America, and many private ones too. Mr. Gensler is rushing to complete as many of them as he can before next January, when Republicans appear likely to take control of the House and could use their appropriations power to rein him in.”

On May 9, the SEC acceded to demands from interested parties and agreed to extend the comment period for the three rules noted above by 30 days each:

“The Securities and Exchange Commission today announced that it has extended the public comment period on the proposed rulemaking to enhance and standardize climate-related disclosures for investors until June 17, 2022. The SEC also announced that it will reopen the comment periods on the proposed rulemaking to enhance private fund investor protection and on the proposed rulemaking to include significant Treasury markets platforms within Regulation ATS for 30 days.

“Today, the Commission acted to provide the public with additional time to comment on three proposed rulemakings that have drawn significant interest from a wide breadth of investors, issuers, market participants, and other stakeholders,” said SEC Chair Gary Gensler. “The SEC benefits greatly from hearing from the public on proposed regulatory changes. Commenters with diverse views have noted that they would benefit from additional time to review these three proposals, and I’m pleased that the public will have additional time to provide thoughtful feedback.””


Some observers are expecting Gensler’s climate disclosures to fail

On May 2, Shivaram Rajgopal and Bruce Usher, two professors at Columbia Business School, penned a piece for Bloomberg Law in which they looked at SEC’s climate disclosure proposal, as well as the possibility that it may be disrupted, and then examined possible alternative means for achieving the same goals. They wrote:

“[E]ven though the ink has barely dried on these newly released SEC climate rules, it’s important to recognize that the 510 pages of regulations may never be enacted. There is no consensus in Congress to act on the climate problem, Republican lawmakers have already urged the SEC to withdraw their proposal, and a more conservative U.S. Supreme Court could view the new rules as an overreach. And, state attorneys are also vowing to challenge the SEC’s proposal.

So if these rules are dead on arrival, where are the areas of promise? There are a few….

Here’s what could happen next.

First, this momentum toward climate disclosure might encourage businesses to change strategy, taking steps to move capital out of fossil fuels and toward renewable technologies and other solutions to climate change….

Second, it’s likely that the need for climate leadership will lead to businesses adding expertise. While companies like Apple, Facebook, Google, and Microsoft already report extensive emissions data, many companies lack the same level of expertise.

The Big Four accounting firms along with other professional-service firms have already started to invest in climate expertise. Ernst & Young announced that it will spend $10 billion over the next three years on audit quality, sustainability, and technology, and KPMG is planning to spend more than $1.5 billion over the next three years on climate-change-related initiatives and training on ESG issues….

Third, increased climate literacy will allow for more scrutiny of green claims, meaning capital will be more likely to flow to truly sustainable projects. As tougher climate policies are proposed and implemented, the days of corporate greenwashing—and investors being misled—could finally come to an end.

That could lead to more money flowing to projects like Apple’s Green bonds which raise capital for projects with environmental benefits, and recently funded over a gigawatt of clean power globally, equivalent to removing 200,000 cars from the road. More companies are likely to follow Apple in investing in truly sustainable projects with more regulation around climate reporting.”

Though not noted in professors Rajgopal and Usherarticle, some analysts in the capital markets and related investment community are expecting publicly traded corporations to comply with disclosure standards whether the SEC passes them or not:

“The International Sustainability Standards Board (ISSB) is rallying regulators from the U.S., Europe, Japan and other jurisdictions around common rules for disclosures about climate risk and other environmental, social and governance (ESG) issues.

The working group of regulators will meet this month and in July to craft a “global baseline” of ESG disclosure standards, according to the ISSB, which in March released for public comment proposed rules on how a company should disclose the ways it gauges and manages ESG risks. A company would also need to publicly describe how sustainability risks, such as drought or flood, affect its total value.

“There is strong public interest in seeking to align where possible the international and jurisdictional requirements for sustainability disclosures,” ISSB Chair Emmanuel Faber said in a statement. 

The ISSB, aiming to bring consistency across borders, intends to urge regulators worldwide to consider adopting its proposals as a foundation for their own domestic sustainability disclosure rules, including those focused on carbon emissions….

The ISSB, backed by the architects for global accounting rules, has asked for public feedback on its proposal by July 29. It plans to complete standard-setting by the end of 2022.

The ISSB was created by the IFRS Foundation, a London-based group that oversees the International Accounting Standards Board (IASB), and launched in November during the COP26 climate conference in Glasgow.

As with IASB rules, companies could voluntarily adopt the ISSB standards or a regulator could endorse the guidelines and require compliance by companies under its jurisdiction.


SEC’s Climate an ESG Task Force issues first enforcement action 

Among other ESG tasks, the Securities and Exchange Commission has promised to keep ESG practitioners honest. To ensure compliance with promises made, the SEC created an ESG enforcement task force in early 2021. That task force has now issued its first enforcement action:

“The SEC’s Climate and ESG Task Force has now issued its first enforcement action.  The SEC has brought a 76-page complaint in federal district court against Vale, S.A., a Brazilian mining company, alleging that Vale “ma[de] false and misleading claims about the safety of its dams.”  Significantly, Vale “regularly misled local governments, communities, and investors about the safety of the Brumadinho dam through its environmental, social, and governance (ESG) disclosures.”…

In essence, the SEC has brought a classic enforcement action against a company for allegedly misleading disclosures–and these disclosures are not just present in typical SEC forms (e.g, 20-F and 6-K), or in investor presentations, but in the separate ESG reports issued by Vale.  As stated in the SEC’s complaint, the “false statements to investors [were] in SEC filings, the 2016 and 2017 Sustainability Reports, and the 2018 ESG Webinar.”  This enforcement action by the SEC demonstrates that statements made in ESG reports should now be considered as ripe for litigation–whether public enforcement actions or private securities litigation–as classic sources of disclosures.    

Notably, the complaint also features allegations concerning corporate governance failures and problems with the auditing process related to the ESG reports and other disclosures.  The presence of these allegations may act to reinforce the SEC’s focus on corporate governance and attestation in its proposed mandatory climate disclosures.”

In the spotlight: Tesla joins Musk in pushing back against ESG 

While Tesla is, by definition, a company that exists specifically to reduce carbon emissions from internal combustion engine vehicles, Elon Musk and others at the company have been reluctant to share ESG-related information with ratings agencies and have, therefore, been given relatively poor ESG scores. Now, Musk and his company are pushing back:

“Tesla Inc., whose Chief Executive Officer Elon Musk has criticized ESG for making little sense, said current ways of measuring environmental, social and governance issues are “fundamentally flawed.”

In a 144-page annual report, the electric vehicle-maker said ESG ratings are based on how corporate profits are affected by ESG-related factors, rather than gauging a company’s real-world impact on society and the environment. The ratings are used by money managers to help decide where to invest. 

In effect, individual investors who park their money in ESG funds managed by large asset managers are unaware that their capital is being used to buy shares of companies that are exacerbating the effects of climate change, rather than mitigating it, Tesla said. 

“We need to create a system that measures and scrutinizes actual positive impact on our planet, so unsuspecting individual investors can choose to support companies that can make and prioritize positive change,” the Austin, Texas-based company said. It added that large investors, ratings agencies, companies and the public need to push for change.” 

Musk has been a recent critic of ESG, and has said its investment principles should be “deleted if not fixed.”



Congressional Democratic retirements at highest percentage since 2014

Fifty-six members of Congress are not running for re-election in 2022, including 33 Democrats and 23 Republicans. For Democrats, this is a larger percentage of the party’s House and Senate caucus to retire in one cycle—12.22%— than in any cycle dating back to 2014. For Republicans, this represents 8.75% of the party’s caucus.

The number of retirements in each party as a percentage of the party’s total number of Congressional members illustrates the amount of turnover happening within a party in a given election cycle. 

The highest recent percentage of Republicans retired in the 2018 election cycle when 12.63% of the party’s caucus—37 members—did not run for re-election. In that cycle, Republicans gained two Senate seats but lost 35 House seats.

The lowest recent percentage of Democrats retired in the 2020 cycle when 10 members——3.57% of the caucus—did not run. In the 2020 general election, Democrats gained three seats in the Senate and lost 10 seats in the House. 

The lowest recent percentage of Republican Congressional retirements was in the 2016 election cycle. Twenty-six Republicans announced their retirement, accounting for 8.64% of the caucus. In the 2016 election, Republicans lost two Senate seats and five House seats.