Morning Digest: Alan Grayson's hedge fund: 'The time to buy is when there's blood in the streets'

Florida Democratic Senate candidate Alan Grayson

Leading Off:

● FL-Sen: This is some story. We've known for quite some time that the House Ethics Committee is investigating Rep. Alan Grayson for possibly violating House rules by operating a hedge fund, but the New York Times offers some stunning new particulars on how Grayson runs his business. Marketing materials for his fund explain that Grayson specializes in "markets in turmoil due to economic, political, or natural disasters" and cites an infamous quote attributed to Baron Rothschild that "the time to buy is when there's blood in the streets." These kinds of sentiments are usually propounded by vulture capitalists, not self-styled progressives.

There are many other troubling details in this report, but the most noteworthy comes from a chain of private emails from last June obtained by the Times. In it, Grayson's former campaign manager Doug Dodson begged his boss to just shut down the fund because it had turned into a "drip, drip, drip story that never goes away and we always come out on the wrong end" (while still delusionally blaming it on a conspiracy of reporters who "want to write this story badly"). Grayson refused, saying "the media might take that as an admission of wrongdoing."

What makes these emails all the more remarkable is that someone from Grayson's camp leaked them to the paper in an effort to blow Grayson up. It's not clear who, but multiple email addresses in the cc: field have been redacted—and Grayson's parted ways with a lot of staffers recently, including Dodson. It says a lot about the congressman that a (presumably former) confidante has grown so disgusted he or she now wants to stop Grayson at all costs.

Grayson, of course, still can't understand why anyone has a problem with anything he's done, saying, "Honestly, it's very frustrating to me. This whole insinuation that I have done something improper." Maybe if everyone around you thinks you've done something wrong and you're pretty much the only person who thinks you haven't, you ought to reconsider.

Senate:

● CA-Sen: With Assemblyman Rocky Chavez's entertaining "you can take this debate and shove it" exit from the Golden State's Senate race, that's left two Republicans in the running: Duf Sundheim and Tom Del Beccaro, both of whom are former state party chairs (the former from 2003 to 2007, the latter from 2011 to 2013). And it looks like the GOP can't get enough of that wonderful Duf: Rep. Mimi Walters and state Senate Minority Leader Jean Fuller just gave Sundheim their backing, following House Majority Leader Kevin McCarthy and Fresno Mayor Ashley Swearengin. Del Beccaro, meanwhile, can't seem to get any love.

Now, trying to figure out which Republican is running the best campaign for Senate in California might seem as pointless as wondering who the Knicks will feature in their starting lineup against the Warriors, since both the Knicks and the GOP are going to lose no matter what. But there's one weird catch: Thanks to California's top-two primary, if a single Republican can consolidate enough support, he could deny a spot in the November general election to one of the two main Democrats running, state Attorney General Kamala Harris and Rep. Loretta Sanchez.

Right now, Sanchez trails Harris by every metric including polling, but her one shot is to prolong their fight until the general election, when Sanchez could try to run to Harris' right and ride Republican votes to victory. Harris, the choice of the Democratic establishment and a possible presidential contender some day, would not want to go that route herself. Instead, she'd rather see Sundheim deny that second spot to Sanchez, since she'd crush him in the end. In fact, don't be surprised if we see some Democrats try to ratfuck the primary precisely to help Sundheim, screw Sanchez, and benefit Harris. We've definitely seen that kind of thing before.

Gubernatorial:

● NH-Gov: Almost every cycle, Manchester Mayor Ted Gatsas is mentioned as a potential GOP gubernatorial candidate, but he never goes for it. However, Gatsas told WMUR on Thursday that he is "seriously considering" running, though he says he doesn't know when he'll decide.

Gatsas acknowledged that he's thought about seeking the governorship before but says he feels "much stronger" since his recent heart surgery. Still, this may not be an ideal cycle for Gatsas to finally make the jump. Just a few months ago, Gatsas won re-election by just 64 votes. (Amusingly, Gatsas insisted on Thursday that his "relationship with the citizens of Manchester is wonderful.") Gatsas would also need to get through a competitive primary. Executive Councilor Chris Sununu, who hails from the Granite State's most prominent Republican political family, has been running for months. While Sununu recently picked up an endorsement from Charlie Bass, who used to represent half the state in the House, he hasn't exactly scared off his intra-party foes. Wealthy state Rep. Frank Edelblut formed an exploratory committee a while ago, and he appears to have quietly announced that he's in.

Gatsas may believe that neither Sununu nor Edelblut are particularly strong, but a few other Republicans are making noises about running. While state Sen. Jeanie Forrester hasn't said much about her plans in months, WMUR's John DiStaso reports that she "appears to be moving in the direction of a candidacy, but has not made a final decision." State Senate Majority Leader Jeb Bradley is also keeping his name in contention. In a recent interview with the magazine Outside that mostly centered around hiking (the dude really likes to hike, and not in a sketchy Mark Sanford way), Bradley briefly mentioned that he's still considering a campaign.

But while Gatsas would need to fight his way through both the GOP primary and the general in this swing state, this may be his last chance to run for governor. If another Republican wins this fall, Gatsas would be sidelined. And even if Team Blue keeps the governor's mansion, Gatsas may very well lose re-election in 2017 before he gets the chance to run the next year. New Hampshire also almost always gives governors a second two-year term: Before Republican Craig Benson was ousted in 2004, no first-term governor had lost since 1926. This may not be the best year for Gatsas to run for governor, but he may not have any other choice if he truly wants the job.

House:

● CA-32: Assemblyman Roger Hernandez appeared to catch Rep. Grace Napolitano, a fellow Democrat, by surprise when he announced that he'd challenge her in mid-December. Napolitano hasn't faced a competitive race since she was first elected to Congress in 1998, and we wondered if she'd be able to raise the type of money she'll need to defend herself in this Los Angeles-area seat.

Napolitano brought in $113,000 for the final three months of 2015, which is slightly more than she raised during the other nine months of the year. Hernandez himself raised $89,000, and loaned himself another $80,000; Napolitano leads him $414,000 to $169,000 in cash-on-hand. There wasn't a race here for most of the quarter, so we'll need to wait until April to get a better idea of both candidates' fundraising capabilities.

Hernandez himself has drawn some ugly headlines over the last few years. A former girlfriend accused him of physical abuse in 2012, but prosecutors declined to file charges. That same year, he beat a charge of drunk driving by convincing a jury that police had mishandled evidence and that his eyes were bloodshot because of "allergies." The stories appear to have done him some electoral damage at home though. In 2012, Hernandez beat his GOP foe 59-41 while Obama was carrying his seat 64-33, and Hernandez won 54-46 in 2014 as Gov. Jerry Brown was taking the seat 58-42. Napolitano lives in a different district than the one she represents, and Hernandez is hoping to make that a major liability for her.

Obama carried the 32nd District 65-33, so there's no risk of a GOP pickup. However, if just one Republican runs in the June top-two primary, there's a good chance that only one of the Democrats will advance to November.

● FL-06, 07: Court-ordered redistricting made these two seats much bluer but so far, Democrats aren't capitalizing. State Rep. Dwayne Taylor has been running for the open 6th District since October, but he only had $3,000 in the bank at the end of the year. Three Republicans, Navy vet Brandon Patty and state Reps. Fred Costello and David Santiago, entered the race in January, so we'll need to wait until mid-April for a peek at their fundraising. Romney carried this seat 52-47.

While the new 7th District split almost evenly between Obama and Romney, Republican Rep. John Mica will not be easy to unseat. Political consultant Bill Phillips got some attention when he kicked off his bid in October, but he raised just $36,000 before the end of 2015. Mica holds a $535,000 to $20,000 cash-on-hand edge; unless Team Blue finds better candidates or Taylor and Phillips really bulk up their warchests, these seats will stay red.

● IL-15: State Sen. Kyle McCarter hasn't raised much money for his primary bid against GOP Rep. John Shimkus, but the Club for Growth is taking to the airwaves to help him. The Club's spot hits Shimkus for breaking his term-limits pledge years ago, and argues he's "one of the most liberal Republicans in Congress." The narrator then tells the audience that McCarter "knows the country's in trouble, and a guy whose been in DC 20 years ain't gonna fix it." Shimkus actually unintentionally made a similar argument himself in a very poorly thought-out ad. There is no word on the size of the buy yet, though the Club spent $400,000 each in two other primaries this week. The primary is March 15.

● MD-08: On Thursday, the National Education Association's PAC endorsed state Sen. Jamie Raskin in the crowded primary for this safely blue seat. The state NEA branch has about 71,000 members so this isn't a bad get for Raskin, though it's unclear how the group plans to get involved in this contest.

● MI-10: While businessman Paul Mitchell doesn't have many ties to this suburban Detroit seat, he has something neither of his two GOP primary foes have: cold hard cash. Mitchell has largely been self-funding his bid, and he had a strong $770,000 warchest at the end of the year. State Sen. Phil Pavlov, who represents about a third of this seat in the legislature, only had $131,000 to spend, while ex-state Sen. Alan Sanborn had just $22,000 on hand.

Mitchell ran in the rural 4th District last cycle, and only moved to this suburban Detroit seat last year. Money didn't buy him much love in the 2014 primary: While he decisively outspent John Moolenaar, Mitchell still lost 52-36. Romney won the 10th 55-44.

● MI-13: Detroit City Clerk Janice Winfrey kicked off a primary bid against longtime Rep. John Conyers a few months ago, but it doesn't look like there will be much to see here come August. Winfrey raised just $1,000 during the final months of 2015: While Conyers' $36,000 warchest is far from overwhelming, it's a lot better than the $7,000 she has in the bank.

● NV-04: A new PPP poll, conducted on behalf of the Progressive Change Campaign Committee, finds former state Assemblywoman Lucy Flores with a 29-9 lead over non-profit president Susie Lee, with former Assembly Speaker John Oceguera at 7 and state Sen. Ruben Kihuen at 6. (PCCC has endorsed Flores.) These numbers are almost identical to those in a PPP internal for Flores from last June.

As we noted at the time, Flores' lead is almost certainly a product of her 2014 bid for lieutenant governor; while she got crushed, it helped increase her name recognition. It's unsurprising that things haven't changed since then, since no candidate has yet to run any paid media or fully activate their ground operations. That's a real problem for Flores, who's proven to be the weakest fundraiser of this foursome. Once her rivals (especially Lee, who's done some self-funding) start advertising, the picture will change.

● NY-01: Another prominent New York congressman has given his backing to former Southampton Town Supervisor Anna Throne-Holst: Rep. Jerry Nadler, who is known as a stalwart liberal. Throne-Holst, who had previously earned the backing of Steve Israel and others, faces venture capitalist Dave Calone in the Democratic primary for the right to take on freshman GOP Rep. Lee Zeldin.

● NY-19: New York's union-backed Working Families Party infamously spurned Zephyr Teachout when she ran for governor in 2014, instead giving their endorsement to Gov. Andrew Cuomo in exchange for a boatload of promises he never intended to keep and predictably never did. Now, though, they're trying to make amends by supporting Teachout's bid for Congress in the Hudson Valley, where she faces Livingston Town Councilman Will Yandik in the Democratic primary.

Before they damaged their reputation by siding with the reactionary Cuomo, the WFP was known for its ability to deliver proverbial boots on the ground. If they come through for Teachout, that ought to give her a boost, though her name recognition and what will likely be stronger fundraising should already give her an edge for the nomination. Yandik's key advantage will be his local ties, as Teachout only recently moved into the district. Republicans, meanwhile, are duking it out between businessman Andrew Heaney and former Assembly Minority Leader John Faso, both of whom have decent-sized war chests.

● PA-02: Democratic Rep. Chaka Fattah has a variety of related problems. Fattah's in serious legal trouble, he's facing multiple primary opponents (most prominently state Rep. Dwight Evans), and he has very little campaign money. However, he recently got one major asset that could help keep him afloat: the endorsement of the AFSCME's District 33. This 10,000-member behemoth, which represents the city's blue-collar municipal employees, is arguably Philadelphia's most powerful union. 

● PA-06: On Monday, Rep. Matt Cartwright endorsed Lindy Li's campaign against GOP Rep. Ryan Costello. Cartwright hails from Scranton, so he probably doesn't carry too much influence with voters in this suburban Philadelphia seat. But Cartwright is wealthy, and he'll be an asset for Li if he can introduce her to donors.

Li faces businessman Mike Parrish for the right to take on Costello in this light red district. However, while powerful local Rep. Bob Brady and a few other House members have sided with Li and ex-Gov. Ed Rendell is in Parrish's corner, the DCCC doesn't sound optimistic about this race, since they didn't include this seat on either their "Red to Blue" or "Emerging Races" list. (See our DCCC item below for more.)

● SC-01: State Rep. Jenny Horne drew national attention last year when she called for the Confederate flag to be removed from the South Carolina state House grounds. However, that doesn't seem to be doing much for her in her GOP primary bid against Rep. Mark Sanford. In the final three months of December, Horne raised just $32,000, and Sanford holds a huge $806,000 to $24,000 cash-on-hand edge. While Sanford himself was in the spotlight during his 2009 sex scandal and 2013 comeback campaign, he's largely kept his head down since he got back to Congress, and there's no indication that primary voters want to fire him.

● TN-04: Former Romney aide Grant Starrett initially raised a ton of cash when he kicked off his primary bid against Rep. Scott Desjarlais but since then, Starrett's fundraising has slowed to a trickle. For the second quarter in a row, Starrett raised just north of $90,000. The good news for Starrett is that Desjarlais is doing even worse: The incumbent hauled in only $57,000, and Starrett holds a $729,000 to $241,000 cash-on-hand edge.

This isn't the first time Desjarlais has faced a well-funded primary challenge in this safely red seat. In 2012, voters learned that the married congressman had affairs with several of his patients while he was a practicing physician, and tried to convince at least one to get an abortion. At this time in the 2014 cycle, state Sen. Jim Tracy had an $845,000 to $154,000 cash advantage over Desjarlais, and the incumbent looked doomed.

However, the passage of the time helped make Desjarlais' scandal less important to voters, and Tracy ran an unfocused campaign: Desjarlais ended up winning by 38 votes. By the time the August primary rolls around, Desjarlais' scandal will be almost four years old, and Starrett will need to do what Tracy couldn't quite do and convince voters that Desjarlais' old transgressions still matter.

● TX-29: While ex-Harris County Sheriff Adrian Garcia's decision to challenge Rep. Gene Green in the Democratic primary caught the incumbent by surprise, Green wisely stockpiled enough money over the years to defend himself. Green recently reserved $240,000 worth of airtime for the weeks leading up to the March 1 primary. Garcia only had $73,000 in the bank at the end of 2015 (Green had $1.25 million) and even if he's raised a lot more since then, it's very likely that Green will dramatically outspend him.

● VA-02: Rep. Randy Forbes recently released a poll showing him defeating state Del. Scott Taylor by a 43-24 margin in the GOP primary, but Taylor isn't letting it go unanswered. Taylor quickly unveiled a late January survey from Tel Opinion Research that showed the men deadlocked, each with a third of the vote. Forbes decided to run in this Hampton Roads seat after his old Tidewater district turned safely blue: Forbes is arguing that his seniority will benefit the area, while Taylor is portraying Forbes as an outsider. It's unclear at this point if the GOP will hold a June primary here or nominate its candidate at a firehouse primary or through a party convention.

● WI-08: A number of Republicans, and a few Democrats, have talked about running for this open 51-48 Romney seat, but no one has jumped in yet. Republican Mike Gallagher, a veteran who was Scott Walker's foreign policy advisor during the governor's presidential campaign, is the latest to express interest (though he was first mentioned as a possibility last week). While Gallagher hasn't said much about his plans, a number of local business leaders, including two current Green Bay Packers board members, are calling for him to get in.

● DCCC: On Thursday, the Democratic Congressional Campaign Committee rolled out the first round of its "Red to Blue" program, which promises to help Democratic candidates the committee regards as its strongest recruits in the seats it considers its top priorities. There are a number of interesting things about the full list, which is broken in to two tiers, "Red to Blue" and "Emerging Races," with the latter essentially serving as the farm team for the former.

First up, Red to Blue: 

• CA-24: Salud Carbajal
      
• CO-06: Morgan Carroll
      
• FL-10: Val Demings
      
• FL-18: Randy Perkins
      
• FL-26: Annette Taddeo
      
• IA-01: Monica Vernon
      
• IL-10: Brad Schneider
      
• ME-02: Emily Cain
      
• MI-01: Lon Johnson
      
• MI-07: Gretchen Driskell
      
• MN-02: Angie Craig
      
• NJ-05: Josh Gottheimer
      
• NV-03: Jacky Rosen
      
• TX-23: Pete Gallego
      
• UT-04: Doug Owens
      
• VA-10: LuAnn Bennett

Many of these races feature contested primaries, but the D-Trip isn't hesitating to pick sides. That group includes CA-24, FL-10, FL-18, FL-26, IA-01, IL-10, and MI-01, and possibly CO-06 as well. You'll also notice that a couple of districts are seats the party isn't actually trying to turn from red to blue but rather is trying to hold, CA-24 and FL-18.

In addition, the D-Trip has also named several districts to Red to Blue without expressing any preference for a particular contender: FL-13, NV-04, NY-01, NY-24, and PA-08. FL-13 is almost shocking: They really aren't comfortable putting their thumb on the scale for Charlie Crist over Eric Lynn, a former Defense Dept. official, even though Crist's name recognition makes him the heavy favorite in the primary. But while the DCCC isn't usually deterred when one candidate has some local support, Lynn has in his corner St. Petersburg Mayor Rick Kriseman, who is very prominent.

The rest are notable as well, because at least one candidate in each contest has earned some favorable notice from the national establishment: Harry Reid's backing Ruben Kihuen in NV-04; Steve Israel's for Anna Throne-Holst in NY-01; Kirsten Gillibrand and Chuck Schumer are behind Colleen Deacon in NY-24; and EMILY's List and Gillibrand have endorsed Shaughnessy Naughton in PA-08. It once again goes to show that the "establishment" is no monolithic thing.

Then we have the Emerging Races:

• AZ-01: Tom O'Halleran
      
• CA-10: Michael Eggman
      
• MI-08: Melissa Gilbert
      
• MT-AL: Denise Juneau
      
• NH-01: Carol Shea-Porter
      
• NY-23: John Plumb
      
• PA-07: Bill Golderer
      
• WV-02: Cory Simpson

AZ-01 is the only defensive hold on this list, and it's a bit concerning to see O'Halleran, a former Republican state senator who recently joined the Democratic Party, only making the second tier, given how tough of a district this is. However, O'Halleran's fundraising hasn't been very strong: As of the end of December, he had just $172,000 in the bank. 

It's also quite unexpected to see Carol Shea-Porter, a former member of Congress, get relegated as well. CSP has never been a particularly strong fundraiser, but she's won races in the past in spite of that, and New Hampshire's tendency to gyrate wildly puts this seat on the map this year almost no matter what.

Lastly, the DCCC also included a pair of "Emerging Districts," again, without choosing a specific candidate: IA-03 and NY-19. The latter is where law professor Zephyr Teachout recently announced a run, but she also faces Livingston Town Councilman Will Yandik. Evidently both have something to prove to the power-brokers in Washington.

There are also several notable districts that didn't make either level of the DCCC's list, the most notable of which are AZ-02, CA-25, IL-12, IN-02, NY-03, NY-21, and PA-06. These are all Republican seats except NY-03, which will be a tricky Democratic hold. In all the rest, Democratic recruitment hasn't been especially strong, and the D-Trip may yet add more races as candidates prove themselves. But AZ-02, for instance, was the closest House race in the nation in 2014. If it's not on the table this fall, that would be extremely disappointing.

Mayoral:

● Baltimore, MD Mayor: None of the candidates in the April 26 Democratic primary have splurged much money on ads yet—with one exception. The Baltimore Sun reports that wealthy businessman David Warnock has already spent at least $600,000 on TV spots. State Sen. Catherine Pugh is the only other contender to air any ads so far, and she's only dropped $3,000. Other candidates will be able to run ads as Election Day gets closer, but Warnock has the ability to stay on the air for the next two months. The Democratic nominee should have no trouble in the November general election.

Other Races:

● PA-AG: In what might seem like a remarkable development, the Pennsylvania state Senate failed to gain the necessary two-thirds vote of its members in order to remove indicted Attorney General Kathleen Kane from office on Wednesday. The vote largely broke down along party lines, with only one Democrat joining 28 Republicans to support the ouster, while 18 Democrats and one Republican said nay.

But Democrats weren't defending Kane, who has lost the confidence of just about everyone in her party after she was charged with illegally leaking grand jury materials and lying about it. Rather, Democrats were opposed to the arcane procedure the GOP tried to employ, which hadn't been used in over a century and only required a two-thirds vote of the Senate to remove an elected official "for cause."

This was an attempt to short-circuit the traditional (and much lengthier) impeachment process, which requires the state House to investigate and the Senate to conduct a trial. But that's moving forward as well: Also on Wednesday, the House voted overwhelmingly to authorize a sub-committee to investigate whether articles of impeachment should be filed against Kane. The committee's findings are expected this spring. Kane, meanwhile, is set to face a criminal trial in August.

The Daily Kos Elections Morning Digest is compiled by David Nir and Jeff Singer, with additional contributions from David Jarman, Steve Singiser, Daniel Donner, and Stephen Wolf.