Swing state Republicans bleed donors and cash over Trump's false election claims

By Tim Reid and Nathan Layne

(Reuters) - Real estate mogul Ron Weiser has been one of the biggest donors to the Michigan Republican Party, giving $4.5 million in the recent midterm election cycle. But no more.

Weiser, former chair of the party, has halted his funding, citing concerns about the organization's stewardship. He says he doesn't agree with Republicans who promote falsehoods about election results and insists it's "ludicrous" to claim Donald Trump, who lost Michigan by 154,000 votes in 2020, carried the state.

"I question whether the state party has the necessary expertise to spend the money well," he said.

The withdrawal of bankrollers like Weiser reflects the high price Republicans in the battleground states of Michigan and Arizona are paying for their full-throated support of former President Trump and his unsubstantiated claims that the 2020 election was stolen from him.

The two parties have hemorrhaged money in recent years, undermining Republican efforts to win back the ultra-competitive states that could determine who wins the White House and control of the U.S. Congress in next November's elections, according to a Reuters review of financial filings, plus interviews with six major donors and three election campaign experts.

Arizona's Republican Party had less than $50,000 in cash reserves in its state and federal bank accounts as of March 31 to spend on overheads such as rent, payroll and political campaign operations, the filings show. At the same point four years ago, it had nearly $770,000.

The Michigan party's federal account had about $116,000 on March 31, a drop from nearly $867,000 two years ago. It has yet to disclose updated financial information for its state account this year.

The two parties have "astonishingly low cash reserves," said Seth Masket, director of the non-partisan Center on American Politics at the University of Denver, adding that state parties play a key election role, helping promote candidates, fund get-out-the-vote efforts, pay for ads and recruit volunteers.

"Their ability to help candidates is severely limited right now."

The Arizona party spent more than $300,000 on "legal consulting" fees last year, according to its federal filings, which do not specify the type of legal work paid for.

In that period, legal fees were paid to a firm that had filed lawsuits seeking to overturn Trump's defeat in Arizona, according to separate campaign and legal disclosures. Money was also paid to attorneys who represented Kelli Ward, the former party chair when the Justice Department subpoenaed her over her involvement in a plan to falsely certify to Congress that Trump, and not Democratic President Joe Biden, had won Arizona, plus when a congressional committee subpoenaed her phone records.

More than $500,000 was also spent in Arizona on an election night party and a bus tour for statewide Trump-backed candidates last year, the financial filings show. All of those candidates, who supported the former president's election-steal claims, lost in last November's midterms.

It's not just Weiser who's had enough.

Five other Republican donors to the Arizona or Michigan parties, who have each donated tens of thousands of dollars over the past six years, told Reuters they had also ceased giving money, citing state leaders' drives to overturn the 2020 election, their backing of losing candidates who support Trump's election conspiracy and what they view as extreme positions on issues like abortion.

"It's too bad we let the right wing of our party take over the operations," said Jim Click, whose family has been a longtime major Republican donor in Arizona. He and other donors said they would give money directly to candidates or support them through other political fundraising groups.

Kristina Karamo, chair of the Michigan state party, didn't respond to a request for comment for this story. In the campaign for her position, she said that she wanted to break ties with established donors, accusing them of exploiting the party for their own gain, and wants to rely more on grassroots members.

Ward, who stepped down as Arizona party chair in January after four years at the helm, told Reuters that she and her team had always had revenues to cover outgoings and had left her successor at least three months' operating expenses plus a "robust fundraising operation."

Dajana Zlaticanin, a spokesperson for new chair Jeff DeWit, said that when he took over, "cash reserves were extremely low and previous bills kept coming in." Contributions are on the uptick, she said, with over $40,000 raised in May.

The Republican National Committee, which oversees Republican political operations nationally, didn't respond to a request for comment about the finances of the two state parties.

'I SEE NO SUN COMING OUT'

Arizona and Michigan, both won by Biden in 2020, are among just a handful of swing states that will likely decide the race for the presidency in November 2024.

Not all Republican parties have fared as badly financially as Arizona and Michigan. For example, the swing state of North Carolina - where Republican leaders haven't focused so heavily on Trump's election-steal fight - ended 2022 with nearly $800,000 in its federal accounts, according to the filings.

It is difficult to get a complete picture of parties' finances, though, given time lags in disclosures and because not all of their accounts are subject to reporting requirements.

Furthermore, state parties don't rely solely on individual donors, they also receive money from national party organizations, outside groups and political action committees.

Michigan was a hotbed of conspiracy theories after Trump lost the 2020 election, and this month Karamo was fined by a county judge for filing a lawsuit that made unfounded claims about voting irregularities in Detroit.

Tensions over transparency have started to boil over.

Last week former state party budget chairman Matt Johnson launched a broadside against Karamo, two days after she removed him from his post, accusing her of keeping his committee in the dark about the party's finances.

"As far as we could tell from the piecemeal information we received, the party's fundraising had been extremely meager, and the spending was so far out of proportion with income as to put us on the path to bankruptcy," he said.

Jason Roe, a former executive director of the Michigan Republican Party, said the financial figures disclosed so far by the party underscore the difficult task of supporting operations without the financial backing of big donors.

"They are effectively broke and I don't see the clouds parting and the sun coming out on their fundraising abilities," he said.

'DETRIMENTAL TO CAMPAIGNS'

The review of the two Republican state parties' filings shows that a near shut-off of the donor spigot is contributing to their financial woes.

The Michigan party's federal account took in $51,000 in the fist three months of this year, putting it on pace to raise less than a quarter of its haul in the first half of 2019, the same period in the last presidential election cycle.

In March, Karamo told a gathering of local officials that the party had $460,000 in liabilities after the 2022 midterm elections. While not unusually large, the debt would normally be covered by fresh fundraising.

The Arizona party, meanwhile, raised roughly $139,000 in the first three months of this year, according to state and federal filings. In the comparable period in 2019, in the months after the 2018 midterm elections, it raised more than $330,000.

New Arizona chair DeWit, who was NASA's chief financial officer in the Trump administration, is working to make the party attractive to donors again by focusing on winning elections, spokesperson Zlaticanin said.

Some donors in Michigan said they had started talking with each other about how best to bypass the state party and support individual Republican candidates. But the state party's organizational heft will be hard to replicate, said Jeff Timmer, a former executive director of the Michigan Republican Party.

"You have to have boots on the ground and you can't build that kind of infrastructure quickly enough to win the 2024 election," Timmer said.

Jonathan Lines, who preceded Ward as Arizona's party chairman up to 2019, said he expected new donor money to mostly go to political action committees, and other groups who fund campaigns, rather than the state party.

"But not having the state party well funded is detrimental to many Republican campaigns next year," he added.

(Reporting by Tim Reid and Nathan Layne, editing by Ross Colvin and Pravin Char)