Laura J. Nelson | (TNS) Los Angeles Times

In the days before the California Senate primary, political ads calling Rep. Katie Porter a fake, an actor and a hypocrite inundated social media platforms and television programs.

The $10 million bill for the advertisements, which were designed to bump Porter out of the race for a rare open Senate seat, was footed by a super PAC called Fairshake that is funded by cryptocurrency companies and their executives.

As primary results rolled in that showed Porter a distant third behind Rep. Adam B. Schiff of Burbank and Republican Steve Garvey, Fairshake boasted that the Orange County lawmaker’s alliance with mentor Sen. Elizabeth Warren, a vocal skeptic of cryptocurrency, had “ended her career in Congress.”

Porter later blamed her loss on “an onslaught of billionaires spending millions to rig this election,” a not-too-subtle allusion to the crypto group’s major donors.

After two years of bad headlines, including the conviction of FTX founder Sam Bankman-Fried on fraud charges, the cryptocurrency industry is back in the political arena, flexing its significant cash reserves in the 2024 election cycle. The California Senate race is one of many in which the industry has signaled that it will boost candidates who support more favorable crypto laws in Washington, and oust those who don’t.

“That amount of money buys you a seat at the political table in Washington, D.C., and that’s their goal,” said Dennis Kelleher, chief executive and co-founder of Better Markets, a financial watchdog group that has been a frequent opponent of the crypto industry in Washington.

The Securities and Exchange Commission has asserted in court that cryptocurrency should be regulated like stocks and bonds, which would require trading firms to follow a wide range of disclosure and investor protection laws. The industry has lobbied for more favorable regulations, including allowing the markets to be regulated by the smaller Commodity Futures Trading Commission.

Fairshake was the largest outside spender in the Senate primary, but to what extent it moved the needle is a matter of debate. Schiff and his allies spent prodigiously to boost Garvey among Republican voters, blanketing the state with ads that described the retired baseball star as a two-time Trump voter who was “too conservative for California.”

Under California’s unusual primary system, the two candidates who receive the most votes in the primary advance to the November election, regardless of their political affiliation. Schiff’s team gambled that in a deep-blue state, his path to victory would be easier if he faced a Republican.

“When you look at everything else going on in that race, I’m extremely skeptical that they had any impact,” Kelleher said of the cryptocurrency ads. He cited Schiff’s campaign strategy of boosting Garvey and the major support from leaders in the Democratic Party, including Speaker Emerita Nancy Pelosi (D-San Francisco), as well as Schiff’s long resume and Porter’s status as a relative newcomer in Democratic politics.

Polling from the week before the election found Garvey and Schiff in a fight for first, although Porter received a lower share of votes than polls predicted. Who will fill the remainder of the late Dianne Feinstein’s term in the Senate, as well as a six-year term that starts in 2025, will be decided on the November ballot.

Sawyer Hackett, a spokesman for the Progressive Change Campaign Committee, which backed Porter, said the $10-million ad buy “probably contributed a significant amount” to Porter’s loss. In California’s costly media markets, he said, $10 million doesn’t win or lose a race, but “it’s certainly a major factor, especially when you’re talking about the final weeks of the election when Democratic voters are considering the options in front of them.”

He said he wasn’t surprised to see the crypto industry spending against Porter, who has a “somewhat minor” track record on crypto issues but has proved herself willing to take on major industries to defend consumers. The crypto industry, he said, is “targeting candidates with an overall brand that seems to be focused on antitrust and pro-consumer policy.”

Fairshake’s major donors include venture capital giants Marc Andreessen and Ben Horowitz, who have invested in dozens of crypto companies; crypto investors Cameron and Tyler Winklevoss; and Brian Armstrong, the chief executive of Coinbase, which is listed on the Nasdaq market. .

Coinbase, which has the highest trading volume of any crypto exchange in the U.S., is working this year to make sure that “candidates and incumbents continue to think about crypto as an opportunity to really make a difference to change, to protect jobs, to protect national security,” said Kara Calvert, the company’s head of U.S. policy.

Coinbase will be working to “educate” members of Congress through November, she said, so that “when they get asked about crypto at a town hall, or when they get asked about crypto by Fairshake, or by any of the rest of these organizations, that they know what they’re talking about.”

On the afternoon before election day, a group called Stand With Crypto hosted a get-out-the-vote rally for crypto owners in Los Angeles. A line stretched around the block on Hollywood’s Walk of Fame outside the Bourbon Room bar for an event headlined by the rapper Nas, who was an early investor in Coinbase.

Inside, as guests ate sliders and drank Sofia Coppola wine, Armstrong told the crowd that they needed to vote to send a “very clear message” for the November election that “you’ve got to understand innovation, you’ve got to be pro-tech, pro-innovation, pro-crypto, to get elected and be representing our values in California.”

Armstrong didn’t name any California Senate candidates, instead directing voters to a guide prepared by Stand With Crypto, which, as a political 501(c)4 nonprofit organization, is not required to disclose its donors. The guide described Schiff as “strongly supportive” of crypto and Porter as “strongly against.” Garvey and Rep. Barbara Lee of Oakland, the other candidates in the race, are listed as “pending,” with a question mark icon.

Porter’s “F” rating cited three references, including a post on X, formerly Twitter, in which she called Fairshake’s backers “shadowy crypto billionaires” because of their ad campaign against her, as well as her signature on a 2022 letter that Warren sent to the Texas power grid authority, questioning its practice of paying crypto mining businesses to shut off power during peak periods. Some companies reported earning more from the payments than from their mining operations, Warren wrote.

Stand With Crypto also said Porter voted “nay” last summer in the House finance committee markup of a cryptocurrency bill favored by the industry. But Porter isn’t a member of that committee and her name does not appear on the vote sheet. Porter did not vote on the legislation, her spokeswoman said.

Schiff’s “A” rating on crypto issues was attributed to a single statement on his campaign website that said the U.S. needs to “develop comprehensive regulatory frameworks” to ensure that cryptocurrency and blockchain companies “stay here and grow here, and that the United States remains the global leader in these important new technologies.”

Schiff told reporters during a campaign stop in San Francisco last week that he supports “clear rules of the road” and “sound regulation” for cryptocurrency companies that protect consumers but keep the firms in the U.S.

©2024 Los Angeles Times. Visit at latimes.com. Distributed by Tribune Content Agency, LLC.

Josh Wingrove | Bloomberg News (TNS)

President Joe Biden’s reelection prospects largely hinge on the so-called Blue Wall, a trio of industrial states that offer the ultimate test for his message of a manufacturing revival.

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In Michigan, Pennsylvania and Wisconsin, his campaign sees signs for optimism, even as recent polling shows Biden trailing presumptive GOP nominee Donald Trump in those key battlegrounds.

The Biden campaign says it ranks no swing state above another — and is focusing on all of them keep open multiple paths to get to 270 Electoral College votes. It has ramped up sharply, doubling its battleground state staffing this month.

But unique factors in those one-time Blue Wall bastions – from demographics to the presence of well-placed allies – position them as his best shot at holding the White House. Biden can clinch a victory with their electoral votes even if he loses four other crucial swing states – Arizona, Georgia, Nevada and North Carolina.

The Blue Wall states had long voted for Democrats in presidential contests before Trump won all three in 2016. Biden then swept them in 2020 and has traveled repeatedly to them since, including Thursday’s visit to Saginaw, Michigan, suggesting a heavy focus on keeping them in his column.

Michigan, Pennsylvania and Wisconsin are dotted with the kinds of small cities and manufacturing centers that Biden has long begged his party to not forget. Michigan and Pennsylvania in particular are also organized labor strongholds where the president – who appeared on an autoworker picket line last year – can hammer his oft-repeated message that unions built the middle class.

At the same time, Biden has a major cash advantage over Trump and is painstakingly linking efforts in those three states with their state-level parties.

“The tactical advantage we are building in states we know are going to be razor close — we have that, they do not,” said Dan Kanninen, the Biden campaign’s battleground states director.

Favorable demographics

The Blue Wall states offer a more favorable demographic picture than some of the others that were close in 2020, with one or all having relatively strong concentrations of key groups for Biden, such as union voters, college-educated voters and Black voters.

And Democrats are optimistic about how a relocation boom since the pandemic may help Biden’s chances in places like Wisconsin’s Dane County, the deeply blue area that includes Madison.

“This time, even more than last time, the issues are on our side,” said Tanya Bjork, a Biden campaign adviser in Wisconsin.

When voters in these states have gone to the ballot box since Biden’s 2020 victory, they’ve delivered wins to his party: Democrats flipped a Pennsylvania Senate seat, won a key seat on Wisconsin’s Supreme Court and gained full control in Michigan for the first time in 40 years.

“It would be a frost-belt strategy for the president, if he can come back,” said Charlie Cook, founder of the Cook Political Report. “It would be more likely to be Michigan, Wisconsin, Pennsylvania.”

Of the Blue Wall states, Michigan is so far the only one to hold a primary. Some 13% of Democratic primary voters there lobbed a protest vote against Biden by choosing “uncommitted” to show dissatisfaction with his handling of the Israel-Hamas conflict. Yet the campaign sees a rich target in the nearly 300,000 voters who got behind GOP challenger Nikki Haley in that state’s Republican primary – many of them in suburban districts Biden had already been eyeing.

“There’s no road to the White House that isn’t going to go through Michigan,” Representative Debbie Dingell, a Democrat and Biden ally, told Bloomberg Television.

Tailor-Made message

Still, recent surveys do not paint an upbeat picture for Biden in these states. A February Bloomberg News/Morning Consult poll found Trump leading by two percentage points in Michigan, four in Wisconsin and six in Pennsylvania.

“Michigan is one where I think Donald Trump is in the driver’s seat,” said Aric Nesbitt, the Republican leader in Michigan’s state Senate. “His campaign seems better organized and ready to take advantage than I’ve seen in the last two presidential cycles.”

And while Biden’s economic message and industrial policy are tailor-made to appeal to places that were once manufacturing powerhouses, he has deep challenges with voters in Blue Wall states on those issues. Two-thirds in each state said the national economy is on the wrong track in the recent Bloomberg News/Morning Consult poll.

The Biden campaign seeks to frame voters’ choice as a referendum on Trump. “This stark contrast will drive our victories across the battlegrounds that will decide this election,” spokesman Josh Marcus-Blank said.

Biden also will be counting on the strength of candidates in key U.S. Senate races to help him hold off Trump. Pennsylvania Senator Bob Casey, a Biden ally, is up for reelection this year. Senator Tammy Baldwin won her previous race in Wisconsin by 11 points, an unusually wide margin.

These states also offer Biden a different kind of firewall: Each has a Democratic governor, quelling concerns about Trump trying to interfere with or influence the counting of votes.

(With assistance from Annmarie Hordern.)

©2024 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.