Cruz megadonor holding back
Hopeful learns perils of relying on magnates with substantial control
WASHINGTON — Ted Cruz, in his outsider’s bid for the White House, has depended heavily on the largesse of just three wealthy donors to establish credibility and stay afloat amid a chaotic nominating process that killed off most of his rivals.
Now, at perhaps the most desperate moment in his quest to win the GOP nomination, Cruz is learning the perils of relying on strongwilled magnates who carry their own agendas and have demanded an unprecedented level of control in how their money is spent.
One of the three primary donors to Cruz’s presidential efforts, a private equity manager who recruited the other two top donors, has refrained from spending the vast majority of his $10 million contribution. He is instead fighting openly with the top strategist for the super political action committees that were set up to spend the money.
The man at the center of the fight, Toby Neugebauer, is a close friend of Cruz’s and still counts himself a major supporter. But he has refused to spend $9 million of the $10 million he put into a super PAC.
“He was going to go up with ads in October or November. That came and went, and then he said he’s saving it for Super Tuesday,” said Kellyanne Conway, who oversees a network of super PACs supporting Cruz.
“It became apparent almost immediately that his money wasn’t really there,” Conway said.
Neugebauer, though, said he was alarmed by the profligate spending of other super PACs that spent vast sums on candidates who flamed out. He said he is relieved to have set up a strategy where he and two other major donors dictate how their money is spent.
“How we set up in these big PACs was a response to how unhappy people were in 2012,” he said. “Trust me, all the other big donors wish their PACs were set up the same way.”
After Citizens United and other court decisions opened the door to nearly unlimited campaign donations, many donors became frustrated with the control they surrendered to campaign consultants, who blew through millions of dollars on TV ads in a fruitless effort to elect Mitt Romney.
To counter the risk of a repeat of 2012, Neugebauer helped set up three super PACs last year to support Cruz, each using a variation of the name Keep the Promise — one for each major donor. The groups, forbidden by law to communicate with the Cruz campaign, planned to divvy up responsibilities for aiding his candidacy.
But that strategy proved unwieldy, and the super PACs united in early March under the name Trusted Leadership PAC to raise more money. Neugebauer, however, has yet to come aboard. He complained that the political consultants remain addicted to buying negative TV ads, a strategy that has proved particularly ineffective against frontrunner Donald Trump. Neugebauer said he has instead pressed for positive ads placed in social media but has been rebuffed.
If the other two donors are frustrated that the man who helped recruit them to get Cruz into the White House appears to be bailing, they have not said so publicly. Neither Robert Mercer, who has donated $13.5 million to help Cruz, nor Farris Wilks, who with his family donated $15 million, agreed to be interviewed. The Cruz campaign did not respond to a request for comment.
Conway said that the division of labor among the funders was “baked in the cake from the beginning” and that Neugebauer knew his money was to be used for TV ads. The other super PACs, she said, were concentrating on contacting voters directly.
The separate super PACs raised eyebrows from political consultants and staffers of other campaigns, who wondered whether it made sense to hand over so much control to donors.
But Cruz’s former communications adviser, Rick Tyler, said the $38 million infusion from the big three was critical to establishing Cruz as a serious presidential contender, disproving early doubts that he could compete with establishment candidates.
“One of them was ‘Cruz might be able to raise grassroots money, but he’ll never be able to raise big money,’ ” Tyler said. “It was important for people to understand this was a wellfunded campaign, and it was balanced.”
Yet the power and lifestyles of the Cruz megadonors has also highlighted the wide gulf between Cruz’s populist critiques of “crony capitalism” and the relationships he maintains with the ultrawealthy to fuel that message. Ten donors have given a total of $48 million to his super PACs, more than threefourths of the money he has raised from outside groups. Many of them made their money in oil and gas, industries that have received strong support from Cruz.
Neugebauer said he and the other donors were not motivated by personal issues or gain. Rather, he said, they are united by a concern for the country’s debt.
“I know it sounds crazy,” he said. “We are anti-establishment, and we all think the country is on the precipice of insolvency.”
With Neugebauer on the sidelines, the other super PACs have begun spending money on television ads. Nearly $2 million is being spent in Indiana, where Cruz desperately needs an upset Tuesday to slow Trump’s rise.
Tribune Newspapers’ Maloy Moore and Anthony Pesce contributed.