Back in March, California state Insurance Commissioner Steve Poizner was a man without a future. Down by as much as 50 points to former eBay executive Meg Whitman in the California Republican gubernatorial primary, Poizner it seemed couldn’t find a way to stop the mighty Whitman’s march to the general election. That is, until a group of Democrats came to his rescue. Now, thanks to a line of attack on Whitman launched by Democratic activists — who would prefer to face Poizner in the fall — that highlighted Whitman’s connections to Goldman Sachs, Poizner has risen from the dead.
Reports this week showed Poizner has closed the gap with Whitman to within 10, leading some to say the race is officially too close to call.
What was the magic bullet? According to one independent pollster and a whole lot of anecdotal evidence, it’s Goldman Sachs (or more to the point, the fact that she once served on the board of the bank) that threatens to end Whitman’s campaign in the rundown to her first election, ever.
At first Poizner wouldn’t touch the story of Whitman’s connections to the scandal-plagued investment bank. But after the story that Democrats pushed hard hit the national media a few weeks ago, Poizner finally started running ads on Whitman and Goldman Sachs. And that, according to observers of the race, is when her numbers started to tank.
Whitman served on the Goldman Sachs board of directors for just over a year, resigning from the job in 2002. She accepted over $400,000 in compensation from the company — a position no candidate for anything would want to find herself in. What’s worse, she is actually tied to an investment scandal of her own at the firm: Whitman has been accused of accepting preferential stock tips at Goldman in exchange for giving the firm millions in eBay business.
Back in February, a group of Democratic opposition researchers in California including led by long time operative Ace Smith started making noises about Whitman’s connections to Goldman. Smith and his team had been researching Whitman for months by the time she announced her bid. When they came upon her connections to Goldman, Smith and his team told me they knew that had hit pay dirt.
“We saw that if she was known as this warm and fuzzy CEO of eBay she would be governor,” Dan Newman, a partner of Smith’s told me. “We knew that if she was known as the Goldman Sachs director, she would not be governor.”
Smith and his team went to work spreading the news. They launched LevelThePlayingField2010.com and started pushing the story out to reporters and into cyberspace. (One example of their methods is the YouTube video “Megatar,” which portrays a crude caricature of Whitman giving voters a tour of her private jet.)
The story built slowly, Smith told me, first making a small splash in the state media and then picking up national attention. Finally, just a few weeks ago, the dull roar about Goldman Sachs and Whitman became a cacophony.
“We were beating the drums early,” Smith said, “and then the story started to really appear here and a couple of weeks later it broke nationally. That’s when it took off.”
Other Democratic-leaning groups picked up on the story. The California Labor Federation — an AFL-CIO affiliate — launched their “Wall Street Whitman” site a few weeks ago and the DGA started pushing the Goldman Sachs line as part of their independent expenditure campaign in the state as well.
Democratic strategist Ben Tulchin, who did polling of the race that included questions about Goldman, said the effect the Goldman storyline would have on Whitman was clear. Tulchin said that Whitman’s short time in the political spotlight made her an easy target for an attack that would fly in the face of her feel-good storyline.
“[Voters] only met her six months ago,” Tulchin said. He said that without a record to run on, Whitman was especially vulnerable to an attack that went after her wealth.
Whitman didn’t handle it well. When Level The Playing Field started its campaign against her, she decided to give the group more free press by dragging Smith and his crew before a California ethics board that promptly dismissed her claim it was illegally coordinating with the likely Democratic nominee, state Attorney General Jerry Brown.
Tulchin said it’s a common problem for self-funding candidates not accustomed to the political arena.
“Having a lot of money gets you a seat at the table,” he said. “But there’s an element of arrogance and being out of touch when you’re wealthy. You don’t have the political experience and you intend to be very thin-skinned.”
Poizner finally went up with his own ads calling out Whitman for her Goldman connections a couple weeks ago. Before then, his strategy seemed to be be to take Whitman down by attacking her from the right on issues like immigration and offshore oil drilling. It was a strategy that appeared to have failed. But once the Goldman ads hit, Whitman’s numbers started to tank, and fast.
“He was trying to run the classic California Republican primary campaign, which is run to the right on everything,” Newman said. “He didn’t touch this [Goldman Sachs story] until it was really rolling.”
Mark DiCamillo, director of the well-respected California Field Poll — which has been tracking politics in the state since 1945 — agreed that Whitman’s fall coincides with the rise in popularity of the Goldman attack.
“Whitman is running into some real turbulence,” he said. “If there hadn’t been the controversy about her ties with Goldman she would’ve won the nomination easily.”
“She lost control of the message in the past two weeks,” DiCamillo said. “Being associated with Goldman Sachs is not a good place to be right now.”
It’s too early to tell whether Whitman’s falling poll numbers will cost her the nomination or not, DiCamillo said. He’s waiting on new polls from PPIC, the Los Angeles Times and his organization — due in the next couple of weeks — to “see if the trend holds.”
“But I expect that it will,” DiCamillo said.
That would leave Democrats sitting pretty in the general election. Poizner is universally accepted as the weaker Republican nominee, bringing less money and more conservative views to the table.
“Many of the positions he’s espoused in the primary he would have a tough time selling to the general electorate,” DiCamillo said.
This is not to say that Goldman Sachs is entirely responsible for Whitman’s spectacular fall from grace. Nick Velasquez, the DGA’s man in California, said that the Arizona immigration law “crystallized the issue” in the minds of voters on both sides — conservatives were more energized to turn to their man taking the harder line on immigration — Poizner — and, Velasquez said, those who oppose the law are fired up to turn back to the Democrats and away from a self-proclaimed moderate like Whitman.
“It was a one-two punch,” Velasquez said. “First came immigration, then came Goldman Sachs.”
Still, he said, it’s hard to beat being connected to the most notorious bank of the decade.
“It puts all of her ethics questions into two words,” he said of Goldman Sachs.
