A proxy war with psychological stakes

The powerless House Republicans are looking to the Hudson Valley for a little redemption, hoping that expenditures in the ultimate range of one million dollars might help spark a political victory and a badly-needed psychological boost.

Perhaps it has escaped your notice, but in 15 days there will be a special election in New York's 20th congressional district, to fill the House seat vacated by Democrat Kirsten Gillibrand, who this winter ascended to the U.S. Senate. This is one of the few key contests on the '09 calendar, a proxy war for the Washington warriors, and Republicans are anxious to spin a win as an early adverse verdict on President Obama.

They've already shoved a hefty stack of chips across the table. The House minority leaders have leaned on their troops to write checks to GOP candidate Jim Tedisco, and nearly half the House Republicans have reportedly agreed to do so. Some are holding fundraisers for Tedisco; some are trekking north to the 10-county rural district to pound the drums; some big names, such as Rudy Giuliani, have endorsed Tedisco. The party's political arm on the House side, the National Republican Congressional Committee (NRCC), has already spent around $350,000, mostly on ads hammering Democratic candidate Scott Murphy. The Republican National Committee, led by the ever-loqacious Michael Steele (who badly needs the bragging rights that a Tedisco victory would bring, and who needs to demonstrate that his sorry party can still win something in the Northeast), has chipped in roughly $180,000.

On paper, the Republicans should not have to be working this hard. The heavily rural 20th congressional district is a gerrymandered marvel; thanks to its odd configuration, registered Republicans outnumber registered Democrats by roughly 70,000. It has been a safe Republican seat for three decades; Gillibrand broke the mold in 2006, when she defeated an ethically-challenged GOP incumbent, and she won again last November. With her gone, however, one might well assume that the Republicans would get their mojo back. Their current candidate, Tedisco, is the seasoned Republican minority leader in the New York state assembly, and therefore well known in the district; the Democratic opponent, Murphy, is a venture capitalist who has never run for anything and is little known in the district. Plus, the Democrats in Washington aren't investing nearly as much money in the race as the Republicans (in part because Murphy has deep pockets and can help finance himself).

And yet...during the past two weeks, Republican Tedisco's lead in the polls has been slashed from 12 points to four. What's happening there?

It's a no-brainer, actually. The Republican strategists at the NRCC in Washington have been hewing to their usual routine - running negative attack ads on TV, telling falsehoods about Murphy - much to the disgust of the local voters. As a result, Tedisco's numbers have plummeted.

This is not speculation on my part. This is what Tedisco himself believes. Last Thursday, he told a newspaper in the district that he intended to distance himself from the NRCC: "I'm taking over, and we're going to run a campaign that relates to the people....We're going to run a 20th district campaign and talk about the positive issues." His stance condemning "those individuals out in Washington" is no surprise, given the latest local poll numbers from the Siena Research Institute: Of those surveyed who had seen the pro-Tedisco commercials, 12 percent said that they felt more inclined to support Tedisco - but 28 percent said they were less likely to support him.

The Washington strategists had an interesting response. They basically signaled that they would continue to run their anti-Murphy attack ads, whether Tedisco likes it or not. Here's an excerpt from the NRCC statement: "We have no plans to shirk our responsibility." (Legally, there's nothing that Tedisco can do to stop them.)

Apparently, one sore point is a recurring NRCC ad that paints Murphy as "a Wall Street insider wheeler-dealer" who didn't pay his business taxes. To quote the charge in the ad: "Millionaire Scott Murphy was caught not paying taxes on his own business, said it wasn't his responsibility, but state records prove that it was. Scott Murphy hasn't been honest with his taxes, but wants to to Washington and vote on yours." (Clearly, the Republicans want to harness the current populist anger about Wall Street, and use it against the Democrat; as the NRCC also said in its statement last Thursday, "The NRCC has an obligation to hold Scott Murphy accountable for the past he is trying to hide as a Wall Street executive whose actions represent everything that has gone wrong with our economy.")

But the problem is that the Republican portrait of Murphy as a tax deadbeat is false. (Shocking, right?)

For starters, Murphy wasn't "caught" at anything (the word implies that the tax authorities hauled him away). The case involved an online consulting company, Small World Software, Inc., that Murphy founded in 1994. The sales tax issue surfaced in March 1998 - after Murphy had sold Small World to another company. Under the relevent state law, the acquiring company assumed "all debts, liabilities, and duties" of the acquired company. So the new owners paid the sales taxes ($20,000), plus some penalty and interest charges.

The Republicans are a lot closer to the mark with an ad claiming that Murphy, as a board member of another company, "approved huge bonuses for a handful of top executives, whole his company recorded massive losses." Again, this is a bid to play the populist card. The company in question, Synacor Inc., had a net loss of $1.2 million in 2007 (whether this qualifies as a "massive" loss, you decide), but four top executives got bonuses totaling $439,000 (whether this qualifies as "huge," you decide). The bonuses were intended in part as a reward for increasing net sales, and, indeed, the company in 2007 did report net sales that were nearly as large as 2005 and 2006 put together.

It's highly doubtful that most voters (epecially in a special election, with the characteristic low turnout) are parsing truth and falsity, and the attendant nuances. More likely, it's the GOP's tone. Murphy and the Democrats have taken some bad shots at Tedisco as well - falsely charging that Tedisco "refuses to say" whether he'd cap CEO compensation in firms that receive bailout money (actually, he says he'd cap them) - but the polls show that district voters generally rate Murphy's ads as more positive than negative.

Indeed, one Murphy attack ad seems to be working in his favor. The Democrat keeps pointing out - and this charge is true - that Tedisco has repeatedly refused to say how, as a congressman, he would have voted on the Obama economic stimulus package. Tedisco calls it "a hypothetical question," and says he has never looked at the bill ("I'm not a speed reader").

Tedisco's reluctance to commit on the stimulus speaks volumes about the current GOP dilemma. Obama reportedly enjoys a 65 percent favorability rating in this heavily Republican district; Obama also won the district last November. If Tedisco says that he would have voted No on the stimulus (just as all the House Republicans did), he'd risk alienating the independent swing voters in the district who want to give Obama a chance. But if Tedisco says that he would have voted Yes on the stimulus, he'd risk alienating the Republican base voters who are demanding naysaying solidarity.

We'll see how it all plays out on March 31. Given the local electorate, it's still hard to imagine that Tedisco loses. The Republicans don't want to contemplate the psychological fallout if he does.