How A Surge Of Super PAC Money Upended A Hawaii Congressional Primary

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The forthcoming retirement of Rep. Kai Kahele (D-Hawaii) after a single term in Congress has prompted a heated primary election to replace him in one of the state’s two solidly Democratic House seats.

On Saturday, Democrats in Hawaii’s 2nd Congressional District, which encompasses the less-populated part of Oahu and all of the remaining Hawaiian islands, will choose among six candidates.

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Just two hopefuls in the field have emerged as competitive: state Rep. Patrick Pihana Branco and former state Sen. Jill Tokuda.

Tokuda, who served in the state legislature from 2006 to 2018 and previously worked for U.S. Sen. Mazie Hirono (D-Hawaii), had a large lead over Branco, a first-term lawmaker, in a public poll in early July.

But the poll was conducted before a last-minute surge of super PAC money came in for Branco.

Together, Vote Vets, the Congressional Hispanic Caucus’s Bold PAC, the centrist Mainstream Democrats PAC, and Web3 Forward PAC, a cryptocurrency investor-funded group, have spent about $1.2 million on Branco’s behalf.

The outside money has boosted Branco’s bid but also prompted the Congressional Progressive Caucus to get involved on Tokuda’s side. The CPC’s super PAC spent $179,000 for Tokuda earlier this month. The Medicare for All PAC, affiliated with CPC chair Rep. Pramila Jayapal (D-Wash.), has spent an additional $20,000 in support of Tokuda’s bid. EMILY’s List, an influential backer of female candidates who back abortion rights, is also supporting Tokuda.

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Although the two candidates do not have major ideological differences, the clear-cut gulf dividing their institutional backers has turned the contest into another proxy war between moderate and progressive Democrats.

The big spending has also shocked many Hawaiians, who are unaccustomed to such robust national interest in their political races.

“People here have really interpreted this as a test of the power of outside super PACs to influence elections,” said Colin Moore, director of the University of Hawaii’s public policy center.

Web3 Forward’s support for Branco has attracted the most attention. The group is funded by GMI PAC, which was founded in January with the explicit goal of protecting the cryptocurrency industry from stricter congressional regulation. GMI PAC is in turn funded by a host of investors with a major financial stake in the growth of cryptocurrency, such as FTX founder Sam Bankman-Fried and venture capitalists Ben Horowitz and Marc Andreessen.

Those seeking to understand the group’s interest in Branco have noted that during his first term in the state legislature, he introduced several bills aimed at making it easier to use and trade cryptocurrencies in Hawaii. One of his bills, which did not become law, would have exempted cryptocurrency from the state’s law regulating money transmission services.

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It is impossible to know whether Branco intended to ingratiate himself with the cryptocurrency industry when he introduced the bills, said Jacob Aki, a spokesperson for Tokuda’s campaign.

But, Aki said, “Understanding his record, it’s no surprise that they’re coming in in force for him.”

A spokesperson for Branco’s campaign noted that Kahele hadn’t announced plans to leave Congress when Branco introduced those bills, making it impossible for Branco to have had a congressional run in mind when he proposed the legislation.

“Patrick has worked on legislation relating to cryptocurrency in Hawaiʻi because consumers in Hawaiʻi face significant barriers to being able to access and trade cryptocurrency, something that consumers on the mainland do not,” the Branco campaign said in a statement. “This is an issue of consumer choice and freedom.”

Regardless of his intention, Branco would be among the House Democrats who is less skeptical of the cryptocurrency and digital token trading industry. The industry’s critics, including Sen. Elizabeth Warren (D-Mass.), characterize it as a largely unregulated form of speculation that is rife with fraud.

Branco supports bipartisan legislation co-sponsored by Rep. Ro Khanna (D-Calif.) that would subject digital currency trading platforms and exchanges to the same regulatory framework as derivatives markets. Proponents of the bill say it would ensure federal oversight of currently unregulated parts of the digital currency world, but skeptics fear that it is a backdoor way to spare cryptocurrency traders from the stricter oversight of the Securities and Exchange Commission.

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Branco’s campaign rejected any characterization of him as a moderate, noting that Branco, a gay man with Indigenous ancestry, supports Medicare for All and the Green New Deal.

“Patrick is a progressive who likes to get things done, and is proud of his progressive record,” his campaign said.

But the short duration of Branco’s tenure in the state legislature, having been elected in 2020, makes it a “little difficult to get a full understanding of his political philosophy,” according to Moore. “He’s trying to run as the progressive candidate.”

In addition, Branco has claimed the progressive high ground on gun regulation. His campaign website includes a “red box” signaling to super PACs that they should highlight the endorsement Tokuda received from the National Rifle Association in 2012. Candidates are barred by law from coordinating with super PACs, which are not subject to federal campaign-finance limits, but when a campaign says that voters “need to know” certain things, it is a way to communicate with super PACs without violating the law.

“Tokuda’s past endorsement by the NRA raises serious questions about whether she would be the best candidate to represent Hawaiʻi voters in Congress,” the site says.

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VoteVets took Branco up on the suggestion. The group aired an ad attacking Tokuda that featured images of the May 24 school shooting in Uvalde, Texas. Branco finally condemned the ad and asked that VoteVets take it down.

Tokuda has said that she does not know why the NRA endorsed her in 2012 and points out that the organization lent its blessing to dozens of Democratic lawmakers that cycle.

Tokuda points to her more recent votes to regulate guns, including a 2018 vote for legislation banning bump stocks. As a candidate, she supports closing background check loopholes, banning assault rifles, raising the age for gun ownership of any kind to 21, and enacting federal “red flag” laws making it easier for family members to petition the government to confiscate the guns of someone in a mental health crisis.

Tokuda’s campaign maintains that she has a longer record of progressive accomplishments than Branco. “She was pushing hard for paid family leave, gun reform, affordable housing, and access to health care,” Aki said. “A lot of the issues that matter to the [Congressional] Progressive Caucus are issues that she pushed while in the state Senate.”

Moore believes that Tokuda stands to benefit from a voter backlash to the outside money and negative ads attacking Tokuda.

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“The notion that Jill Tokuda was pro-NRA just struck a lot of voters as bizarre,” Moore said.

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