Paulsen-Phillips race for Congress shaping up as one of most expensive in Minnesota

WASHINGTON – Republican U.S. Rep. Erik Paulsen has an early fundraising lead as he battles for re-election in his suburban Minneapolis congressional district, a race that is already shaping up to be one of the most expensive in the state.

Paulsen raised $3.7 million over the past 18 months, much of it from the insurance and pharmaceutical industries. The Eden Prairie congressman said he needs to raise large sums to defend himself, given the outside money spent on ads attacking him in the last election. This time, he faces an aggressive challenge from DFLer Dean Phillips, a wealthy businessman who has raised $2.9 million and calls Paulsen a prop of corporate interests.

"I do what's right for my constituents regardless of who donates to me," Paulsen said. "I have a lot of support and like every member of the Minnesota delegation, I take contributions from employees of companies in Minnesota."

Minnesota's candidates are in some of the most competitive races in the country. They've raised at least $14 million so far, according to federal election filings released this month.

Democrats are trying to win control of the House by flipping 24 GOP seats, and Paulsen is one of their targets, along with U.S. Rep. Jason Lewis.

Democrats are also trying to hold open seats in southern and northeastern Minnesota, as U.S. Reps. Tim Walz and Rick Nolan step down.

The fundraising edge changes from district to district.

In the Second Congressional District, south and southeast of the Twin Cities, Lewis lags DFL challenger Angie Craig in raising money, just as he did during their 2016 battle. Craig, a former healthcare executive, outspent Lewis 4 to 1 two years ago, only to be narrowly defeated. This election cycle, Craig has raised $2.1 million to Lewis' $1.9 million.

Lewis lambasted Craig for calling for an end to Citizens United — the 2010 Supreme Court decision that forbids restrictions on campaign spending by outside groups — while raising large sums. He also noted that she was the largest recipient of contributions from the medical device tax industry among congressional candidates in 2016.

"When someone says 'Oh gosh, let's get money out of politics' and runs around calling for Citizens United to be repealed and sets record after record raising money, you have to wonder about political integrity there," Lewis said.

Craig's campaign counters that it is proud of its grass-roots effort, claiming that more than 34,000 individuals have donated an average of $44 each.

More than half of Craig's contributions have come from large individual donations, while 47 percent of Lewis' funding came from PACs.

Craig has received $33,756 from the pharmaceutical and health products industry — one of her largest donors in 2016 — and some of her biggest donations were from employees of Abbott Laboratories, which bought her former employer, St. Jude Medical. Lewis' top contributors were leadership PACs and the insurance, air transport and legal industries.

Craig's biggest source of contributions was EMILY's List, a PAC that helps elect Democratic women who support abortion rights. The group gave her $5,000, with another $26,420 raised by the group for Craig from individual donors. It was also the largest contributor to U.S. Sen. Tina Smith, a former executive of Planned Parenthood; it gave Smith $53,080 as she prepares for a special election in November against GOP state Sen. Karin Housley.

Smith has raised $4.5 million so far. She received $236,907 from industries associated with women's issues and drew 28 percent of her contributions from small donations.

Housley has raised $1.6 million, including $180,000 that she lent to her campaign. She has also received large donations from the entertainment and real estate industries.

In one of the country's most hotly contested races, Phillips, a Minnesota liquor heir, accuses Paulsen of being bought by special interests, given that he ranks sixth on the list of PAC money recipients in the House.

Just over half of Paulsen's contributions are from PACs.

"Erik Paulsen is the poster child for what is wrong with campaign finance in our country," said Phillips, who has pledged not to accept money from PACs, federal lobbyists and even other members of Congress.

The suburban swing district, which includes Minneapolis' southwestern suburbs, voted for Hillary Clinton in 2016. Paulsen has been trying to campaign as an independent voice despite voting with President Donald Trump most of the time.

On Tuesday, the House Majority PAC launched a new round of digital ads against Paulsen that highlight the millions of dollars he's accepted from insurance and financial interests.

As a member of the House Ways and Means Committee, he voted to relax banking regulations and reduce corporate tax rates.

But Paulsen has criticized Phillips for investing in industries that he's spoken out against, such as oil, saying, "I don't think he's serious about what he's asking for — he's being a little gimmicky.".

Just 2.4 percent of Paulsen's donations are from small contributions of under $200. Fourteen percent of Phillips' donations came from small donors.

Phillips' top donors came from the real estate, legal and securities and investment industries, and include Heartland Realty Investors and UnitedHealth Group.

Paulsen raised about one-third of his money from out-of-state donors, largely from D.C., California and Texas.

As a state legislator in the 1990s, Paulsen tried to ban PACs and PAC contributions. Asked how his thinking had evolved, Paulsen noted that the Supreme Court had ruled that political spending is free speech.

"I want to make sure we're not shutting down free speech for employees of Minnesota companies like GM (General Mills) or Medtronic or Best Buy or others," he said.

Maya Rao • 202-662-7433