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Democratic Senate hopefuls split on PAC funds

By Matt Viser and Andrea Estes
Globe Staff / October 29, 2009

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With few notable policy distinctions among the candidates, the question of whether to accept money from political action committees and lobbyists divides the field in the US Senate Democratic primary.

Celtics co-owner Stephen Pagliuca, whose personal fortune is estimated at $400 million, was the first to say he would not take such contributions. City Year cofounder Alan Khazei announced a similar pledge several days later. Both candidates seized on the issue in Monday’s debate to highlight their outsider status.

“It’s about, where do you spend your time? Whose phone calls do you answer? Who gets heard?’’ Khazei said in an interview. “When they call my office, I’m going to say, ‘Next.’ When a voter calls, I’m going to say, ‘Schedule an appointment.’ ’’

While Pagliuca and Khazei are not explicitly attacking their opponents, their argument is clear: that by accepting tens of thousands of dollars from PACs and lobbyists, some of it from entities or industries they help oversee, Attorney General Martha Coakley and US Representative Michael E. Capuano will be more beholden to special interests.

Political action committees, or PACs, are often dedicated to one particular issue, business, or cause and used to influence political races through donations to candidates. Federal PACs can donate up to $5,000 to each candidate for each election.

Through September, Capuano had collected $59,500 from PACs for his Senate campaign, according to federal disclosure forms filed by Capuano and the committees. He also raised at least $24,000 from lobbyists registered in Washington or Massachusetts, according to a Globe review of his reports. Capuano reported raising about $343,000 from all donors.

Over his 10-year career in Congress, Capuano has taken nearly $1.9 million from PACs, according to the Center for Responsive Politics.

Coakley collected $57,250 from PACs through last month, a small percentage of the $2.2 million she raised in the opening weeks of the campaign. She has collected at least $9,900 from state and federal lobbyists, according to a Globe review.

Both candidates, who are battling for union support, have collected a significant percentage of their PAC money from organized labor.

Some PAC contributions to Coakley have come from industries or entities that she either regulates directly or has had direct dealings with as attorney general.

Coakley, for example, accepted $10,000 last month from the Home Depot Inc. PAC, the maximum amount allowed altogether for primary and general election contributions. Two months before, she settled a two-year-old case with Home Depot over allegations that the company did not properly calculate vacation benefits for employees. Home Depot agreed to pay $45,000 to 58 former workers, as well as an assessment of $10,000 to the state.

Home Depot did not respond to requests for comment. A Coakley campaign spokeswoman, Alex Zaroulis, said, “There is no connection between the settlement and the donation.’’ Zaroulis declined to comment further, and Coakley declined requests for an interview.

Illustrating the potential for conflicts, Coakley recently returned donations from two health care PACs. Health care is an area where Coakley has significant oversight, from overseeing nonprofit institutions and insurers to enforcing antitrust laws and prosecuting Medicaid fraud.

Last month, Coakley received $1,000 from the PAC of Kindred Healthcare Inc., a Louisville, Ky.-based company that operates hospitals and nursing centers across the country. She also took $1,000 from the PAC of Quest Diagnostics Inc., a Madison, N.J.-based company that provides laboratory and diagnostic testing for hospitals and research firms.

“The Coakley Committee has a vetting committee that reviews any contributions for potential conflict of interest,’’ Zaroulis said. “The committee decided not to keep those contributions, and they have been returned.’’

She declined to say why they were returned and what the potential conflict entailed.

Since 2005, Coakley, as a statewide candidate, has taken about $50,000 from PACs, according to state records. She has raised more than $2 million in all during that period.

The $1.9 million Capuano has raised from PACs in his House career amounts to about 35 percent of his total $5.4 million, according to the Center for Responsive Politics. He has also taken at least $141,593 from registered lobbyists, according to the nonprofit group based in Washington.

Some of the money has come from entities with an interest in two powerful House panels Capuano sits: the Transportation and Infrastructure Commitee and the Financial Services Commitee.

Donors to his Senate campaign include the Seafarers International Union, which gave the maximum $5,000; Boeing Co., which gave $1,000; the Property Casualty Insurers Association of America, which gave $2,000; and John Hancock Financial Services Inc., which gave $3,000.

“All donations are made public, available for review online, and comply with federal law,’’ said Alison Mills, a Capuano spokeswoman.

Capuano, who declined requests for an interview, has said previously he would rather take money from well-funded PACs than to ask for donations from financially strapped Massachusetts residents. He has also scoffed at Pagliuca’s contention that Capuano is beholden to special interests.

“He is a special interest,’’ Capuano said in an earlier interview.

Raising money from PACs and lobbyists has been a standard political practice for years, a way to quickly fill campaign coffers from well-funded groups invested in public policy decisions.

Still, some candidates have sought to distinguish themselves by swearing off the contributions. President Obama built his 2008 campaign on such a pledge, using it to differentiate himself from primary rival Hillary Clinton, in a race in which the two also shared many positions.

PAC money tends to flow with more frequency in a special election, in part because there are not other candidates around the country competing for dollars, said Gary C. Jacobson, professor of political science at the University of California at San Diego.

“Refusing PAC money makes sense only if, one, you can’t get it, or, two, you don’t need it,’’ said Jacobson, author of the book “Money in Congressional Elections.’’ “They’ll try to make lemonade out of the lemon by taking the moral high road.’’

But Pagliuca and Khazei insist that the issue is real.

“It’s not credible to claim that PACs and lobbyists don’t have any effect,’’ Pagliuca said in an interview. “If they didn’t have an effect, then PACs wouldn’t exist. It’s just a fact that PAC money fuels a lot of the horse-trading and things that go on in Washington, which is why we don’t have a health care bill, and it’s why we don’t have an energy bill.’’

Bain Capital, where Pagliuca has been managing director, has spent handsomely on lobbying firms to influence legislation on financial regulation, paying $410,000 to two lobbying firms this year.

Pagliuca also acknowledged that being personally wealthy makes it easier to refuse PAC and lobbyist money. “It certainly makes you free from any influences if you’re financing 80 percent of your campaign,’’ said Pagliuca, who has put at least $1.8 million into his campaign.

In Coakley’s case, fund-raising is fraught with potential conflicts, because her office either enforces state laws that pertain to many industries or has direct oversight over those industries.

Executives from Caritas Christi Health Care, which operates heath care centers across New England and was subject to a financial review by Coakley’s office in 2007 - have donated more than $18,000 to her Senate campaign. NStar executives have given $6,500, and employees of Framingham-based Radius Healthcare Centers, which runs nursing facilities, gave $12,100.