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A Project of The Annenberg Public Policy Center

Scandalous Ad in New Hampshire Race

A conservative group accuses Sen. Jeanne Shaheen in a TV ad of “profiting from her votes in Congress.” But the scandal is how the group distorts the facts.

The ad says that “Shaheen’s wealth has surged while in public office,” but her family’s estimated net worth has actually declined since she took office in January 2009.

There is also less than meets the eye to the ad’s claims about “a shady stock deal and a conflict of interest.”

The claim about “votes” that supposedly enriched her family refers to the American Recovery and Reinvestment Act — a stimulus plan that was backed by all Senate Democrats. After the plan became law, the National Science Foundation awarded a stimulus grant of less than $78,000 to Ultrawave Labs for breast cancer research. Shaheen’s husband, William, was an adviser to the company at the time and held stock options worth between $1,001 and $15,000. But the Shaheen campaign says the option expired and the family did not earn a profit.

Has Shaheen’s Wealth ‘Surged’?

The ad, titled “Cronyism,” is the work of Ending Spending Action Fund, a conservative super PAC headed by businessman Joe Ricketts, the founder of a company now known as TD Ameritrade. It began airing Aug. 26 and immediately came under attack from campaign lawyers for the New Hampshire Democratic senator, who is running this fall against former Sen. Scott Brown. An NBC affiliate in Boston asked the group to change it after the Shaheen campaign complained.

Brian Baker, the super PAC’s president and general counsel, told us in an email that the group will not change the voice-over but it will add one additional citation to the ad. Baker told us the ad is “100% accurate and truthful and fully supported by the back-up,” which he provided to us.

The ad begins by saying, “New Hampshire families have struggled … but official records show Shaheen’s wealth has surged while in public office.” Shaheen joined the Senate in January 2009.

The super PAC’s backup material says that the Shaheen family’s estimated net worth has increased from $3.4 million in 2008 to $5.4 million in 2012, citing an analysis by opensecrets.org of personal financial disclosure statements that are filed annually by members of Congress.

But that ignores the senator’s latest report filed in May 2013. That report shows her estimated net worth — as calculated by opensecret.org’s method — was $2.7 million in 2013, down 21 percent from $3.4 million in 2008.

Personal financial disclosure reports do not provide precise amounts, but rather ranges — such as $0-$1,000; $1,001-$15,000; $15,001-$50,000; $50,001-$100,000; $100,001-$250,000; $250,001-500,000; $500,001-$1,000,000. Opensecrets.org defines “net worth” as “the average of the maximum debt figure subtracted from the maximum asset figure and the minimum debt figure subtracted from the minimum asset figure.”

The 2008 report showed her family’s assets ranged from $2,944,938 to $6,077,918, while her liabilities ranged from $650,005 to $1,500,000. By opensecrets.org’s calculation that results in a net worth in the range of $4,577,918 to $2,294,933 — which averages to $3.4 million.

For 2013, her family’s assets ranged from $3,746,028 to $7,892,000, while her liabilities ranged from $2,030,012 to $4,200,000, based on our analysis of the 2013 report. Shaheen’s net worth ranged between $1,716,016 and $3,692,000 — which averages to a net worth of $2.7 million, using the opensecrets.org method of calculating average net worth.

In an Aug. 27 Associated Press article, the lawyers for Ending Spending took a different approach to determining Shaheen’s wealth than the one presented in the group’s backup document. “Ending Spending’s lawyers said that Shaheen shouldn’t be allowed to count debts, such as 10 mortgages included in her 2013 financial disclosure,” AP wrote. “Only her assets should be considered, no matter how much they are mortgaged.”

The personal disclosure reports do show that the range of the Shaheen family’s gross assets have increased, from somewhere between $3 million to $6 million in 2008 to $3.7 million to $7.9 million in 2013. But so have the family’s liabilities, which is why it has a lower net worth.

A ‘Shady’ Deal?

The ad then goes on to tie Shaheen’s wealth to her votes in Congress without sufficient evidence.

“News reports raise questions about Shaheen’s family profiting from her votes in Congress, a shady stock deal and a conflict of interest,” the ad says. “Like Shaheen’s vote for Washington’s failed stimulus, which gave taxpayer dollars to a company financially tied to her family.”

All of these claims stem from a June 24 article in the Boston Globe that focused in large part on a relatively small financial stake that the senator’s husband had in Ultrawave Labs, a California-based start-up that is seeking to develop a high-resolution, cost-effective breast imaging system to detect breast cancer.

The Globe said that in 2009 her husband became an adviser in the company and acquired stock options in the firm worth between $1,001 and $15,000. The company that year received $77,715 in federal stimulus money from the National Science Foundation “to fund research in a novel medical imaging technology.”

Shaheen, of course, voted for the American Recovery and Reinvestment Act, which gained final Senate approval on Feb. 13, 2009, in a 60-38 vote. That was the bare minimum of votes needed to pass the legislation. All 55 Democratic senators present that day voted for the bill, along with two independents and three Republicans.

The Globe and Ending Spending do not provide any evidence that Shaheen voted for the stimulus to benefit her family. The $77,715 project — a rounding error in a bill worth $816 billion — was not earmarked in the legislation at the time of her vote. The NSF awarded the contract on June 6, 2009 — about four months after the Senate’s final vote.

The ad, again quoting from the Globe, goes on to say, “The Shaheen family law firm even tried to profit by helping clients ‘grab a share’ of taxpayer money designed to help ‘jump-start’ our ailing economy.”

The Globe article said that her husband’s law firm, Shaheen & Gordon, had “a government relations arm and set up a ‘stimulus opportunities team’ in 2009 to help clients grab a share of the American Recovery and Reinvestment Act passed that year to help jump-start the economy.” However, as the Globe also noted, the stimulus team was a failure.

“The firm, in a statement released by the campaign, said the stimulus practice was short-lived, had no clients, and that William Shaheen was not involved in it,” the Globe wrote.

One last thing about Ultrawave Labs, and that’s the claim in the ad that “Shaheen’s family got stock options, then failed to properly report them, raising ethical questions.” That, too, is a distortion of the facts.

Shaheen did properly report the stock options. The senator’s report covering financial activity in 2009 lists stock options in Ultrawave Labs valued between $1,001 and $15,000, and the transaction date as Nov. 16, 2009.

When the ad says that the family “failed to properly report them,” it is actually talking about the senator’s failure to report that the stock option turned out to be worthless.

Ending Spending cited a June 27 story in the conservative Washington Free Beacon that carried the headline, “Shaheen to Amend Financial Disclosure After Accusations of Shady Stock Deal.” The article said, “Personal disclosure reports filed by Shaheen in May still listed the stocks as assets and also say they are not scheduled to expire on Sep. 1, 2019. However, the Shaheen campaign says those stocks have in fact expired. A Shaheen spokesperson told a Concord Monitor reporter Thursday that Shaheen will amend her financial disclosure statement to correct the information.”

The senator’s 2013 report lists the value of the stock options as “None (or less than $1,001).”

Other Claims

The ad contrasts the Shaheen family’s wealth with New Hampshire families struggling since she took office. The ad says, “Gas prices doubled, higher health care costs, higher taxes, record national debt.”

There’s no question that the federal debt owed to the public has increased steadily since 2009. It now stands at $12.7 trillion. It is also accurate that some taxes have gone up for higher-income Americans as a result of the bipartisan “fiscal cliff” package that Congress passed on New Year’s Day 2013 and the Affordable Care Act. Shaheen voted for both.

Gasoline prices have doubled, too, so that’s accurate — as far as it goes. When Shaheen took office in January 2009, the average retail price of all grades of gasoline sold in New England was $1.81 per gallon. In August, it was nearly $3.68 – slightly more than double, according to the Energy Information Administration data cited by Ending Spending.

But as we have noted in “Obama’s Numbers,” our quarterly reports on key statistical indicators during the Obama administration, the price of gasoline dropped dramatically in late 2008 and early 2009 due to a worldwide recession that had reduced demand. The $3.68 per gallon in August is well below the record for New England of $4.14 set in July 2008, which was before Shaheen took office.

It’s also questionable to blame Shaheen — or any single member of Congress — for the cost of gasoline given that the price for a barrel of oil is set on world markets. She’s no more responsible for gasoline prices than she is for the sharp rise in U.S. domestic oil production that has happened during her time in office. In 2013, U.S. crude oil production reached a 24-year high and net imports dropped to their lowest level since 1996, as the EIA reported in March.

Ending Spending also provided thin evidence for the claim that there are “higher health care costs” in New Hampshire.

The super PAC cited a Dec. 18, 2013, article by the Concord Monitor on a state Insurance Department report on 2012 health insurance rates. The article said that “premiums increased only about 1 percent in 2012, down from a 3.8 percent increase in 2011.” That slight increase occurred before the federal and state health insurance exchanges opened in the fall of 2013, so it wasn’t related to the mandated changes in policies that took effect this year.

As for the cost of health care premiums after the law took effect, the PAC provided an Associated Press article dated Sept. 25, 2013, that said the premium for “a mid-range benchmark plan in New Hampshire will average $360 a month for an individual, slightly higher than the national average.” The article was based on an analysis by the federal Department of Health and Human Services. The AP did not say whether rates have gone up or down compared with the previous year.

The article did say, however, that the $360 state average was before federal subsidies. Subsidies could cut costs to $94 for 27-year-old males making $25,000 per year, according to the article.

The super PAC also points to a preliminary analysis of 2015 state Insurance Department rate request filings for health insurance plans on the individual market. But the analysis — which was conducted by Pricewaterhouse Coopers Health Research Institute — comes with many caveats. It said it had only “limited information” on New Hampshire, as of Aug. 15. The institute gives a proposed 15 percent rate increase for New Hampshire in 2015, but that is based on only one insurance carrier.

Anthem Blue Cross and Blue Shield was the only insurer to offer health plans in New Hampshire on the state exchange in its first year. The state Department of Insurance said in a June 2 press release that it will have four carriers in 2015.

In addition to Anthem, Assurant Health, Harvard Pilgrim and Minuteman Health have announced plans to sell health insurance on the exchange, the state says. “Having a larger number of carriers will give consumers many more choices in terms of cost, plan design, and provider network,” the department said in its press release.

Other caveats: The proposed rates do not include federal subsidies, which will help reduce the cost for some, and the proposed rates must be approved by state regulators.

“Regulators in most states haven’t yet reviewed these proposed rate increases, as they do those variations will likely shrink,” the institute says.

Update, Aug. 29: Ending Spending changed the 30-second version of this TV ad to identify the Center for Responsive Politics as the source of the screen text that reads “Shaheen’s wealth has surged while in public office.” The center operates opensecrets.org. Baker, the super PAC’s president and general counsel, told us that Ending Spending did not change that same image in the 60-second version of the ad, which is the version that we write about here. 

— Eugene Kiely