Newly elected state AGs outline enforcement priorities

Eighteen new state attorneys general will take office in 2019. There will be new AGs in Alaska, Colorado, Connecticut, Delaware, Florida, Hawai`i, Illinois, Maine, Michigan, Minnesota, Missouri, Nevada, New York, Ohio, Rhode Island, South Dakota, Wisconsin and Wyoming. Politically speaking, the impact of the 2018 midterm elections on the AG landscape was decidedly mixed, with Democrats flipping four AG seats previously held by Republicans, and the GOP maintaining their strongholds in Florida and Ohio. Overall, the midterms shifted the balance of state AG seats nationwide to a Democratic majority. Democrats now occupy 27 AG seats (including in Washington, DC) and Republicans, 24.

Companies should be aware that the newly elected AGs are expected to be as aggressive, or more so, than their predecessors. In Connecticut, for example, AG William Tong is succeeding AG George Jepsen, who led some of the largest bipartisan multistate investigations, including into opioid manufacturing and distribution, alleged price fixing in the generic drug market, and data privacy issues. Tong has signaled his intention to continue with these efforts, recently declaring: “I’ve always been activist in the legislature and I’m going to be activist as an attorney general because that’s what you need right now.”[

Other new AGs have started identifying their enforcement priorities. Some newly elected Democratic AGs have announced plans to investigate President Trump’s various business organizations. Others are targeting the administration’s policies. Illinois AG Kwame Raoul is challenging a recent ruling by a federal judge in Texas striking down the Affordable Care Act[, while Nevada AG Aaron Ford has indicated that he will reverse the course set by his predecessor, Republican Adam Laxalt, a staunch opponent of the ACA.

In Colorado, AG Phil Weiser, a Democrat, has outlined his intention to join a lawsuit against opioid manufacturers for allegedly misleading users as to the drugs’ addictive qualities, defend against federal overreach Colorado’s right to decide how it legislates and manages marijuana use, and protect consumers against financial scams. Minnesota AG Keith Ellison, a former Democratic congressman from the state’s 5th District, has pledged to address drug-pricing issues and allegations of anti-competitive activity in the nation’s agricultural sector. “We want to stand with Minnesotans against the big entities in this world as you are trying to make a go in this economy,” he recently told his constituents. “The middle class, I believe, is hanging on barely, and I think the attorney general ought to stand up against the fraudsters, against the monopolies, against these folks who would make your life so much more difficult to afford.”

New elected Republican AGs, for their part, are expected to continue their party’s stalwart defense of the Trump administration through the filing of amicus briefs in high-profile lawsuits challenging his executive orders and final agency actions. But they will also ramp up state enforcement actions in certain areas. For example, Ohio Republican AG Ted Yost is expected to continue his scrutiny of pharmacy benefit managers (PBMs), an industry that he focused on during his time as Ohio State Auditor.

State attorneys general will continue to combine their resources in an ever-growing number of multistate and multi-defendant investigations and civil and criminal enforcement actions, raising the stakes for both individual companies and entire industries. In addition to the issues the AGs campaigned on in the midterm elections, there’s no telling what new issues they will involve themselves in, given the unpredictability of the Trump administration. More relevant to assessing and addressing a business’s regulatory risks is understanding the scope of a particular AG’s authority, its level of activity and the political dynamics framing its choices.

Connecticut guv race’s GOP stunner

The following comes by way of Dentons 50 partner firm the Connecticut Group.

Tuesday’s primary results yielded one big surprise: Republican Bob Stefanowski upset the party’s endorsed candidate, Danbury Mayor Mark Boughton, and won the GOP nomination for governor.

Stefanowski, a former GE and UBS executive who self-financed his campaign, took to the airwaves and ran ads months before his opponents – a strategy that paid off. He cruised to victory tonight, defying expectations, and teeing up an unlikely matchup for November.

Stefanowski will face Democrat Ned Lamont in the governor’s race. Lamont won the Democratic primary for governor by a large margin over Bridgeport Mayor Joe Ganim.

A complete list of the primary results for the state’s constitutional offices is below.

Party-endorsed candidates indicated by *
Republican Primary Democratic Primary
Governor
*Mark Boughton
Tim Herbst
Steve Obsitnik
Bob Stefanowski✓
David Stemerman
Governor
Joe Ganim
*Ned Lamont✓
Lt. Governor
*Joe Markley✓
Jayme Stevenson
Erin Stewart
Lt. Governor
Eva Bermudez-Zimmerman
*Susan Bysiewicz✓
Treasurer
*Thad Grey✓
Art Linares
Treasurer
Dita Bhargava
*Sean Wooden✓
Attorney General
*Susan Hatfield✓
John Shaban
Attorney General
Paul Doyle
Chris Mattei
*William Tong✓
Comptroller
Mark Greenberg
*Kurt Miller✓

Primaries in Conn., Minn., Wisc.: what to watch for and expect as polls close

Primaries in three states on Tuesday will set the contours of some of fall’s highest profile gubernatorial  and US House contests, as both parties eye possible and long-pursued upsets in Connecticut, Minnesota, and Wisconsin.

Connecticut

CT-Gov (D & R): Democratic Gov. Dan Malloy decided not to seek a third term in the face of an ongoing economic crisis that’s made him incredibly unpopular, and Republicans have a real chance to score a pickup in the fall.

Five Republicans are competing here, and there’s no obvious frontrunner. The state party endorsed Danbury Mayor Mark Boughton, who has led the few polls we’ve seen. Boughton, along with businessman Steve Obsitnik and former Trumbull First Selectman Tim Herbst, are participating in the state’s public financing program, which gives them each $1.35 million for the primary but caps their spending at $1.6 million.

Two businessmen, David Stemerman and Bob Stefanowski, are mostly self-funding their bids and are therefore not limited in how much they can spend. Stemerman has spent a hefty $6.2 million during his campaign, while Stefanowski has spent $2.9 million. Both Stefanowski and Stemerman have also aired commercials attacking one another while largely laying off their rivals. A survey earlier this month from the Democratic firm Tremont Public Advisors had Boughton leading Stefanowski 32-22, with Stemerman at 17.

Things are much more lopsided for the Democrats. The state party establishment, as well as a number of prominent unions, are supporting wealthy businessman Ned Lamont, who notably defeated Sen. Joe Lieberman in the 2006 primary before losing the general election to Lieberman’s independent campaign; Lamont also lost the 2010 primary to Malloy. The only other Democrat in the race is Bridgeport Mayor Joe Ganim, who spent several years in prison for corruption but regained his old office in 2015. Lamont has outspent Ganim $2.6 million to $600,000 during the campaign.

CT-05 (D & R) (50-46 Clinton, 54-45 Obama): Democratic Rep. Elizabeth Esty announced she would retire in the spring after news broke that she’d inadequately handled an abusive staffer.

Former Simsbury First Selectwoman Mary Glassman narrowly won the endorsement of the Democratic Party endorsement over former high school teacher Jahana Hayes, the 2016 National Teacher of the Year. Glassman has the backing of several of Connecticut’s House members, but several unions and Sen. Chris Murphy are supporting Hayes, who would be the first black woman to represent the state in Congress. Glassman outspent Hayes $220,000 to $59,000 from July 1 to July 25 (which the FEC calls the “pre-primary period”), but Hayes had more money in the bank for the final weeks of the race.

This western Connecticut seat has been competitive territory in the past, and Republicans hope that retiring Gov. Dan Malloy’s unpopularity will give them an opening. However, none of the three Republican candidates have raised much money. The top fundraiser is retired psychology professor Ruby O’Neill, who outspent businessman Rich DuPont $57,000 to $33,000 in the pre-primary period. Former Meriden Mayor Manny Santos spent only $6,000 during this time, but he has the state party endorsement.

Minnesota

MN-Gov (D & R): Democratic Gov. Mark Dayton is retiring after two terms, and both parties will fight hard to win this contest in the fall. The Democratic primary is a three-way race between Attorney General Lori Swanson, Rep. Tim Walz, and state Rep. Erin Murphy.

Swanson only entered the race in early June, but she brought plenty of name recognition with her. However, her campaign has faced some tough stories in the two months since. News broke in July that Rep. Rick Nolan, who is Swanson’s running mate, had hired a former employee for his 2016 re-election campaign even though the aide had previously left Nolan’s legislative staff after multiple women accused him of sexual harassment. In the final week of the contest, former staffers at the attorney general’s office charged that Swanson had pressured government employees into doing political work for her. Two polls taken in July, before the Nolan story broke, showed Swanson leading the primary, but we have no new data since then.

Walz, who represents a competitive congressional seat in the southern part of the state, looked like the frontrunner throughout most of the race, and he and his allies have outspent the rest of the field. However, Murphy, who has been trying to run to the left of the pack, has Dayton’s support as well as the official endorsement of the state Democratic Party.

On the GOP side, former Gov. Tim Pawlenty is seeking to regain his old seat eight years after leaving office and embarking on an unsuccessful presidential bid. He faces Hennepin County Commissioner Jeff Johnson, who lost the 2014 general election to Dayton 50-44. Pawlenty has considerably more money and name recognition, and the few polls we’ve seen have shown him far ahead. Johnson, however, has the state GOP’s backing, and he’s tried to position himself to Pawlenty’s right. The former governor went up with a negative TV ad last month, so he’s at least taking Johnson seriously as a threat.

MN-01 (R) (53-39 Trump, 50-48 Obama): Democratic Rep. Tim Walz is leaving this competitive southern Minnesota seat behind to run for governor, and Republicans are hoping its sharp swing towards Trump will give them a big opening in the fall. The GOP candidates are state Sen. Carla Nelson and businessman Jim Hagedorn, who narrowly lost to Walz in 2016 in a race that had looked safe for Team Blue until election night.

Nelson outspent Hagedorn $126,000 to $93,000 during the pre-primary period, though he had more money left for the final weeks of the contest. Nelson does have the NRA in her corner, while Hagedorn has the party endorsement. Still, some Republicans are anxious about nominating Hagedorn, who has a long history of misogynist comments, birther ramblings, and comments about “ungrateful” and “dead Indians.” Whoever emerges will take on former Defense Department official Dan Feehan, who faces little opposition in the Democratic primary.

MN-05 (D) (73-18 Clinton, 74-24 Obama): Rep. Keith Ellison announced on the final day of candidate filing that he was leaving this safely blue Minneapolis seat to run for attorney general to succeed Lori Swanson, who herself had just announced a last-minute bid for governor. Several Democrats quickly entered the race for Ellison’s seat, and the main candidates look like former Minnesota House Speaker Margaret Anderson Kelliher, state Rep. Ilhan Omar, and state Sen. Patricia Torres Ray.

Kelliher narrowly lost the 2010 primary for governor to Mark Dayton. Omar, who would be the nation’s first Somali-American member of Congress, has endorsements from Dayton, Minneapolis Mayor Jacob Frey, and the state party. Torres Ray would also make history as Minnesota’s first Hispanic member of Congress, but she’s raised considerably less money than her two main opponents.

MN-08 (D) (54-39 Trump, 52-46 Obama): Democratic Rep. Rick Nolan is retiring from a seat in the Iron Range in the northeast corner of the state. This area is ancestrally Democratic but shifted hard towards Trump, and Republicans are excited about St. Louis County Commissioner Pete Stauber, who faces no serious primary opposition.

There are three main Democratic candidates. State Rep. Jason Metsa and former state Rep. Joe Radinovich, who was Nolan’s campaign manager during his tight 2016 re-election campaign, have the most money and support from party elites. Radinovich, who has had the airwaves to himself, outspent Metsa $124,000 to $82,000 during the pre-primary period, and they both had a similar amount of cash left for the final weeks of the race. However, while retired Duluth news anchor Michelle Lee has raised and spent very little money or attracted much support from Democratic power players, she does have name recognition from her decades on TV.

Mining is one of the key issues in this contest. Mesta is the Democrat closest to mining interests and he has the backing of the United Steelworkers. Lee in particular has emphasized her opposition to local copper-nickel mining and its effects on the environment. Radinovich has tried to position himself in the middle on this issue while focusing more on healthcare.

Vermont

VT Gov (R): Gov. Phil Scott, a centrist Republican stock-car driver, was once one of the most popular governors in the country — beloved by Republicans, Democrats and independents. But then, in April, he signed three historic gun-control laws, drawing fierce protests from residents of this traditionally pro-gun state. In a Morning Consult poll conducted after the signing, Scott’s popularity among Republicans dropped by 26 percentage points, and he now has a -15 net approval rating with voters of his own party. That could be a problem on Tuesday, given that shopkeeper Keith Stern is challenging Scott from the right, specifically criticizing Scott for signing the gun bills. The Republican Governors Association is acting like this is a competitive race: It has invested more than $1 million in a PAC supporting Scott’s re-election.

If Scott does lose the primary, then Stern, a more mainstream conservative, would instantly become a heavy underdog in this dark-blue state. (Going by our new and improved partisan lean metric,1 Vermont is 24 points more Democratic-leaning than the country as a whole.) Although none of the Democratic candidates has lit the world on fire financially, the favorite in the Democratic primary is probably former Vermont Electric Cooperative CEO Christine Hallquist, who, if elected, would be the nation’s first transgender governor.

Wisconsin

WI-Gov (D): Democrats have a crowded contest to take on GOP Gov. Scott Walker. State Superintendent of Public Instruction Tony Evers, the only statewide official running, has had decisive leads in the few polls we’ve seen, while his rivals have all been far behind.

However, former state Rep. Kelda Helen Roys, who would be the first woman to serve as governor, spent considerably more money than the rest of the field during July, which could help her get her name out late in the race. Professional Fire Fighters of Wisconsin president Mahlon Mitchell, who would be Wisconsin’s first black governor, has also spent a credible amount of money, and he’s backed by several unions. Attorney Matt Flynn, campaign finance reform activist Mike McCabe, Madison Mayor Paul Soglin, and state Sen. Kathleen Vinehout are also in.

WI-Sen (R): Republicans have hosted an extremely expensive contest to take on Democratic Sen. Tammy Baldwin. In one corner is businessman and Marine veteran Kevin Nicholson, who has benefited from over $10 million in spending from groups supported by conservative megadonor Richard Uihlein. In the other is state Sen. Leah Vukmir, who has received $2.5 million in air support from groups funded by Diane Hendricks, another conservative megadonor, and the Metropolitan Milwaukee Association of Commerce.

Nicholson has pitched himself as a conservative outsider, while Vukmir is much closer to the state GOP establishment and touts endorsements from both the state party and most of the state’s House delegation (including retiring Speaker Paul Ryan). Vukmir and her allies have taken aim at Nicholson’s tenure as president of the College Democrats of America, including his 2000 speech at the Democratic National Convention in support of Al Gore. Nicholson and his supporters have hit back against Vukmir for expressing past doubts about Donald Trump. A few polls in July showed Nicholson ahead, but we haven’t seen any fresh numbers in weeks.

WI-01 (D) (53-42 Trump, 52-47 Romney): Speaker Paul Ryan is retiring from this southern Wisconsin seat, and the GOP quickly closed ranks behind attorney Bryan Steil. Democrats are hoping to make a play for this district, and they have a battle between ironworker Randy Bryce and Janesville School Board member Cathy Myers.

Bryce entered the race last year with a strong announcement video promoting him as a blue-collar American who will stand up to the GOP, which helped him raise gobs of money. He also has the support of the DCCC, Bernie Sanders, and several unions. However, Bryce has attracted some bad headlines over the last year. Most notably, he only paid off some old debts, including $1,300 in child support and a $2,000 loan from almost two decades ago, well after he kicked off his campaign. Myers has raised considerably less money and generated much less attention, either good or bad.

Malloy vetoes ECS funding bill, prompting likely veto override session

The following state legislative speed read comes by way of Dentons50 partner firm the Connecticut Group.

Dannel Malloy vetoed his first bill from the 2018 regular session Friday, blocking a proposal that would have prevented he and future governors from making cuts to education-cost sharing (“ECS”) grants as a means of balancing budget shortfalls.

Malloy has used his ECS rescission powers in past years to reduce funding to some of the wealthiest municipalities in the state, which he argues can afford to absorb the cuts.

The bill–H.B. 5121, An Act Prohibiting the Executive Branch from Making Rescissions Or Other Reductions To The Education Cost Sharing Grant During The Fiscal Year–passed the Senate unanimously and received just 32 nay votes in the House, virtually ensuring that the governor’s veto will be overridden if the legislature deems it worthy to do so.

With Connecticut’s legislative session in rear view, elections on horizon

The following legislative recap and elections forecast comes by way of Dentons 50 partner firm the Connecticut Group–editor

The 2018 legislative session came to a close on Wednesday night. Although it was a so-called “short session,” that didn’t mean it wasn’t packed with activity on a number of major policy proposals. Many big-ticket bills passed, including:

  • A compromise budget between Republicans and Democrats, which closed a $200+ million deficit in the ’18-’19 fiscal year.
  • Major energy legislation that increases the state’s “renewable portfolio standard,” requiring the state’s utilities and energy suppliers to purchase an increasing amount of energy generated by renewable resources.
  • A bill instituting a statewide ban on “bump stocks.”
  • Legislation providing “dreamers” with access to financial aid at state colleges and universities.

Many high profile proposals, such as a minimum wage increase, the anti-sexual harassment “time’s up” bill, two frameworks for state-based net neutrality regulations, and a bill authorizing tolling on state highways all died at sine die.

* * *

Danbury Mayor Mark Boughton secured the endorsement of the Connecticut GOP on Saturday evening at the Republican State Convention. It’s Boughton’s third time running for Governor, and his first time running with the party’s endorsement.

Former Trumbull First Selectman Tim Herbst and businessman Steve Obsitnik both received enough delegate support to qualify for a primary against Boughton, which they plan to take on. Businessmen David Stemerman and Bob Stefanowski, as well as Shelton Mayor Mark Lauretti plan to petition their way onto the primary ballot.

Sen. Joe Markley won the GOP endorsement for Lt. Governor over New Britain Mayor Erin Stewart and Darien First Selectwoman Jayme Stevenson. Both Stevenson and Stewart plan to challenge Markley in a primary race for the party’s nomination.

Elizabeth Esty Won’t Seek Re-Election

The following elections speed read comes by way of Dentons50 partners James Woulfe and Jim O’Brien of The Connecticut Group–editor.

U.S. Rep. Elizabeth Esty announced last Monday that she will not seek re-election in November in the wake of a scandal that has fellow lawmakers calling for her resignation.

Esty’s former chief of staff, Tony Baker, was accused of domestic violence against a coworker, and was not fired or put on administrative leave by Esty when she learned of the incident. Months later, after an internal investigation was completed, Baker received a severance package worth thousands of dollars and a letter of recommendation from Esty that landed him another job.

The calls for her resignation have come from State Senator Mae Flexer, followed by Majority Leader Bob Duff and Senate President Martin Looney. Duff criticized her for her lack of transparency and poor judgement:

“The calls for Elizabeth’s resignation by many in the political world might have been avoided had there been more concern for the victim and better judgment shown from the day this all happened in a Congressional office up and until the story broke in the media.”

Democrats will now turn their focus to making sure Esty’s seat does not go to a Republican in the upcoming election. They need 24 seats to flip the U.S. House of Representatives, and can’t afford to lose the 5th district.

Connecticut’s week ahead

The following comes by way of Dentons50 Connecticut partner James Woulfe.

Comptroller Kevin Lembo shocked the Connecticut political world last week when he abruptly announced he would be suspending his exploratory campaign for governor and would instead run for reelection.

Lembo, seen as the front-runner in the race before dropping out, made the decision to run for reelection following a ten day “gut check.” “Sometimes the grass isn’t greener,” Lembo said referring to the Governship. Speculation began immediately after the announcement that Lembo’s decision was tied to a decision by Lt. Governor Nancy Wyman to throw her hat in the ring – Lembo had promised to step aside if she decided to enter the race. The Lt. Governor, who is away for the long weekend with family, is reportedly still considering her options, and has not made a final decision. Middletown Mayor Dan Drew, former federal prosecutor Chris Mattei, and former Consumer Protection Commissioner Jonathan Harris still remain in the race on the Democratic side of the aisle. The Governor’s Week

Despite assurances from House and Senate Democrats that a vote on a budget is imminent, Governor Malloy is still pessimistic about the chances of a budget bill getting to his desk any time soon. In an hour-long meeting with the Hartford Courant’s editorial board, the Governor said:

““Whatever the House passes, in line with what they’re talking about, wouldn’t get through the Senate. So, we really have made almost no progress. … It’s clear to me that they’re not dealing with the budgetary reality. I think, quite frankly, they’re grasping for straws in an attempt to cobble together a budget.” Without a budget deal by October 1st, a series of significant cuts in state aid  to cities and towns will go into effect.

General Assembly

The House and Senate will convene next for a special session to take a vote on the budget. The dates and times of the sessions will be announced when a final budget has been negotiated and agreed upon.

D.C. Happenings

Speculation is heating up about a 2020 presidential run by Connecticut’s junior U.S. Senator, Chris Murphy.  Axios AM reported this morning that Sen. Murphy is one of three potential candidates who have begun the search for campaign staff. Sen. Murphy, a frequent and vocal critic of President Trump, was quoted as recently as June saying he had no interest in running for the oval office.

The Week Ahead

Monday, September 4th

State Holiday – Building Closed (CAPGRDS)

Tuesday, September 5th

9:00 am – DPH: Mobile Integrated Health Work Group Meeting (1D)

Wednesday, September 6th

9:00 am – The CT Juvenile Justice Alliance Conference (310) 5:30 pm – CEO: Monthly Commission Meeting (1C)

Thursday, September 7th 

10:00 am –  Rep. Albis: CT Racial Profiling Prohibition Board Meeting (1C) 11:30 am –  Commission on Equity & Opportunity: Brazilian Flag Raising Ceremony (CAPGRDS) 12:00 pm –  Commission on Equity & Opportunity: Brazilian Flag Raising Ceremony Reception (JUDRM)

Friday, September 8th

9:30 am -Medical Assistance Program Oversight Council (1E) 1:00 pm –  Task Force to Study Rare Diseases Meeting (1C)