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Memo To: Interested Parties From: Schatz for Senate Re: State of the Hawaii Senate Race Date: October 14, 2013 I. OVERVIEW Since taking office on December 27, 2012, Senator Brian Schatz has assembled an impressive team running an effective, modern, and winning campaign. Because of the circumstances related to his appointment, Schatz now stands as the 85th ranked Senator in terms of seniority, and he is one of only four freshmen with a subcommittee chairmanship. Historically, Hawaii has never voted an incumbent Senator or any Democratic member of Congress out of office. Conversely, Congresswoman Hanabusa has struggled since day one to establish a winning campaign or a coherent rationale for her candidacy. Hanabusa badly trails Schatz in fundraising and endorsements, and she has had a series of missteps evidencing that her campaign is not up to the rigors of a Senate race. II. SCHATZ IS RUNNING A WINNING CAMPAIGN A. FUNDRAISING In the first three quarters of 2013, Schatz raised an impressive $2.7 million, and he has over $2 million cash on hand. Conversely, Hanabusa has barely raised over $1 million in this cycle including nearly $230,000 that she transferred from her House campaign account. Schatz’s  successful  fundraising  has  drawn  national attention. National Journal recognized Schatz as one of its campaign fundraising winners,1 while Roll Call noted that Schatz had sent a strong message to any potential primary foe.2 On the other hand, The Hill identified  Hanabusa  as  a  “Fundraising  Loser”  noting  that  Schatz  “again  hammered”  his  Democratic challenger in the second quarter of fundraising.3 In the third quarter of 2013, Schatz continued his fundraising dominance by raising close to $700,000. As reported by the Honolulu Star Advertiser, however, Hanabusa

1 National Journal, 4/17/13 2 Roll Call, 4/11/13 3 The Hill, 7/17/13

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“struggled through a subpar quarter”  raising  an  “underwhelming”  $440,000.4 Furthemore, during the third quarter, Hanabusa spent approximately $323,000 of the $440,000 she raised, meaning that her campaign had a staggering 73% burn rate.5 B. ENDORSEMENTS In a Hawaii Democratic primary, endorsements from labor unions, environmental groups, and progressive organizations matter, and Schatz continues to dominate this aspect of the campaign. Hawaii has one of the highest percentages of unionized workers in the country,  and  Schatz  has  already  received  early  endorsements  from  28  unions.    Schatz’s  labor  endorsers  include  Hawaii’s  largest  union, HGEA (AFSCME) as well as the Hawaii Building & Trades Council, the Teamsters, the State of Hawaii Organization of Police Officers, the Hawaii Fire Fighters Association, the Hawaii Nurses Association, the National Association of Letter Carriers, the Seafarers, and the University of Hawaii Professional Assembly. In addition to labor endorsements, Schatz received key endorsements from the League of Conservation Voters, the Sierra Club, and MoveOn.org (which has nearly 40,000 members in Hawaii). To date, Schatz has received endorsements from 34 groups and Hanabusa has only received 7 endorsements. Most significantly, the Democratic Senatorial Campaign Committee has publicly endorsed Schatz, and Senators Reid, Durbin, Schumer, and Bennet as well as 26 other Senate Democrats have made campaign contributions. C. A WINNING TEAM Schatz has assembled an all-star consulting and campaign team with a history of winning races in Hawaii.    Mark  Mellman  served  as  the  pollster  for  Senator  Akaka’s  winning  primary  campaign  in  2006  as  well  as  Rep.  Tulsi  Gabbard’s  successful  primary  campaign  for  Congress in 2012. Rich Davis of Dixon Davis Media Group led the media team for Senator Mazie  Hirono’s  successful  primary  and  general  election  campaigns  in  2012.    Ed  Peavy of Mission  Control  served  as  the  mail  vendor  for  the  successful  Honolulu  mayor’s  race  in  2012. Honolulu native Clay Schroers has returned to Hawaii where he is serving as the campaign manager for Schatz. Schroers successfully managed hard fought Congressional campaigns for Rep. Bill Owens in 2010 and Rep. Dan Maffei in 2012. In 2007-2008, Schatz, together with his Chief of Staff Andy Winer, initiated and ran President  Obama’s  successful  caucus  and  general  election  campaigns.    In  the  process,

4 Star Advertiser, 10/13/13 5 OpenSecrets.org (checked on 10/13/13); Civil Beat, 10/14/13

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Schatz and Winer added over 30,000 new Democrats to the Democratic Party of Hawaii. President Obama continues to have favorability ratings well in excess of 70% in Hawaii, and his in-state supporters closely identify Schatz with the Obama campaign. Conversely, Schatz’s  principal  primary  opponent  served  as  the  lead  spokesperson  for  the  Clinton  campaign. Schatz’s  ability  to  tap  into  the  Hawaii  Obama  campaign  structure  continues  to  the  present. Earlier this year, the Schatz campaign attracted over 500 people to an organizing meeting,  and  these  supporters  are  poised  to  serve  as  the  backbone  of  the  campaign’s  field  operations. II. HANABUSA’S  CAMPAIGN  IS  UNDER  PERFORMING Colleen  Hanabusa’s  campaign  has  failed  to  meet  nearly  every  expectation  and  benchmark it initially set, and it is badly foundering as we enter the fourth quarter of 2013. From its inception, the Hanabusa campaign was propped up by outdated conventional wisdom and a handful of shifting self-created arguments why it would succeed. First, Hanabusa contended she would have the backing of labor,6 but that support has not materialized.7

In fact, Senator Schatz, as noted above, has garnered support from 28 of the 33 labor unions that have made endorsements –including influential endorsements from HGEA, the Hawaii Building Trades Council, SHOPO, and the Hawaii Fire Fighters Association. In sum, the unions endorsing Senator Schatz represent in excess of 75,000 Hawaii members, while the unions endorsing Hanabusa have fewer than 22,000 Hawaii members.

Furthermore, 24 of the 28 unions that have endorsed Senator Schatz either endorsed or contributed  to  Representative  Hanabusa’s  previous  campaigns,  demonstrating  that labor knows both candidates and have decisively chosen to stand with Senator Schatz.

Second,  the  Hanabusa  campaign  believed  it  would  inherit  the  lion’s  share  of  Hawaii’s  Democratic  campaign infrastructure, mostly in terms of local and national fundraising operations as well as a campaign team. However, Senator Schatz has clearly demonstrated he is a superior and more sophisticated fundraiser8 both in Hawaii and on the mainland.9

Some have attempted to  brush  off  Senator  Schatz’s  fundraising  success  as  merely  a  

6 Star Advertiser, 6/16/13, 4/23/13 7 Star Advertiser, 6/18/13 8 Civil Beat, 7/24/13 9 The Hill, 4/25/13

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consequence of his incumbency,10 while others have convinced themselves that Senator Reid and the DSCC are responsible,11 but, while neither excuse accounts for Senator Schatz’s  diligent,  disciplined  and  modern  approach  to  fundraising,  it’s  inarguable  that  the  Hanabusa campaign has utterly failed to meet even her modest expectations. To date, Senator Schatz is closing in on $3 million raised, while Hanabusa will have raised barely $1 million.

Third, the Hanabusa campaign brazenly premised her candidacy on her claim to be the  most  “experienced” candidate; but recent events have demonstrated that it is Representative Hanabusa, not Senator Schatz, who lacks the modern political and communications infrastructure to wage a successful Senate campaign.12 From  a  “low-key”  campaign roll out13 to  the  resignation  of  Representative  Hanabusa’s  deputy chief of staff14 after a Washington Post story exposed plans for improper coordination of an independent-expenditure,15 the clear indication is that Representative Hanabusa has failed to establish a campaign structure capable of running a successful Senate race.

Fourth, from the outset, the Hanabusa campaign portrayed itself as the front-runner with an insurmountable lead. In February, the Hanabusa campaign began touting a dubious internal poll claiming a 20%+ lead on Senator Schatz.16 By June, however, independent polling by Civil Beat showed Senator Schatz with a close lead,17 while internal polling conducted by the respected Mark Mellman found Senator Schatz with a 1 point lead and a 13 point lead among voters who knew both candidates.18

The downward trajectory of the Hanabusa campaign will likely continue as Senator Schatz continues to amass a larger war chest as well as additional endorsements from labor unions. The Hanabusa campaign faces an uphill battle with fewer resources and a lack of institutional support. III. PROGRESSIVES WIN DEMOCRATIC PRIMARIES IN HAWAII A. 2002-2012 DEMOCRATIC PRIMARIES Since  2002,  Hawaii’s  electorate  has  become  more  progressive  and  more  Democratic-leaning as a result of: (1) an influx of progressive leaning voters who migrated to Hawaii in the 1990s and; (2) the impact of President Obama.

10 Star Advertiser, 5/08/13 11 Star Advertiser, 4/22/13; 4/23/13 12 Civil Beat, 9/27/13 13 Star Advertiser, 7/02/13 14 Star Advertiser, 8/08/13 15 Washington Post, 7/27/13 16 Schatz Poll, 6/13; Star Advertiser, 3/12/13 17 Civil Beat, 7/01/13 18 Star Advertiser, 7/02/13; The Hill, 7/02/13; Politico, 7/02/13

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In 2002, Democrats had a 31-20 majority among members of the State House, and in 2003, Democrats had a 20-5 majority among members of the State Senate. Now, Democrats hold an overwhelming majority of 24-1 in the State Senate and a 44-7 majority among members of the State House. As  Hawaii’s  electorate  has  moved  to  the  left,  progressive candidates, regardless of ethnicity, have won every major contested Democratic primary race since 2002. Although some pundits have theorized that ethnicity determines Democratic primaries, recent history clearly demonstrates that progressive ideology is the more dominant factor. Major Democratic Primary Races Since 2002

2002 Mazie Hirono defeats Ed Case in the Democratic primary for governor. 2004 Dennis Kucinich wins Maui County in  Hawaii’s  Presidential  Caucus 2006 Senator Akaka defeats Ed Case in the Democratic primary for U.S.

Senate

Mazie Hirono defeats Colleen Hanabusa in the Democratic primary for the Second Congressional District

2010 Neil Abercrombie defeats Mufi Hannemann in the Democratic primary

for governor

Brian Schatz defeats Norman Sakamoto and Bobby Bunda in the Democratic Primary for lieutenant governor

2012 Mazie Hirono defeats Ed Case in the Democratic primary for U.S.

Senate

Tulsi Gabbard defeats Mufi Hannemann in the Democratic primary for the Second Congressional District

B. SENATOR SCHATZ IS THE PROGRESSIVE CANDIDATE IN THIS RACE Although some pundits have posited that there are few, if any, ideological differences between Schatz and Hanabusa, that viewpoint is simply untrue. Some of the key ideological distinctions between the two candidates are set forth in the following table:

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Where They Stand Brian Schatz

Colleen Hanabusa

Co-sponsored the Medicare Drug Savings Act to make drug companies pay a rebate to the federal government (supported by AARP, NCPSSM)

Opposed rebate to federal government

Has pledged not to raise the retirement age or cut benefits for Social Security or Medicare. Co-Sponsored Harkin-Schatz Social Security Enhancement Act

Voted  in  support  of  the  Simpson  Bowles  Commission’s  recommendations that raised the retirement age and cut benefits for Social Security

Supported the public option

Had  “concerns”  about  the  public  option  in  the  2009  proposed House version of healthcare reform

Voted against the FISA extension (Dec. 2012); called for an investigation into domestic wiretapping (June 2013)

Voted for the FISA extension (Sept. 2012)

Said  he  would  not  support  CISPA  due  to  its  “insufficient  privacy  protections”

Voted  for  CISPA,  calling  it  an  “effective  compromise”  and  had  “strong  use  limitations  for  any shared  data”

In 100% agreement with the League of Conservation Voters’  issues  and  received  its  endorsement;  Supported  Gina McCarthy as head of the EPA; Signed a letter urging Obama to choose a strong nominee willing to “craft  bold  solutions”

Opposed the League of Conservation Voters and the Sierra Club, and voted with the Republican Caucus to delay implementation of new boiler rules Voted to allow clear-cutting of the Tongass National Forest in Alaska

Unequivocally   supported   Honolulu’s   mass   transit   rail project

Said she personally did not support  Honolulu’s  steel  on  steel mass transit rail project

Consistently supported  marriage   equality   calling   it   “a  constitutional  right  for  all  Americans”

Voted for two amendments that were meant to derail state civil unions legislation in 2009; Defined marriage as between one man and one woman until applying for Senate appointment in December 2012.

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IV. CONCLUSION With decisive advantages in money, endorsements, organization, and manpower as well as an ideology more in tune with primary voters, Schatz is well-positioned to win the Democratic nomination for U.S. Senate on August 9, 2014. Schatz is the only candidate in this race to win statewide office, and the Abercrombie-Schatz gubernatorial ticket significantly outpolled Hanabusa in 2010, when she was a candidate for Congress. At 40 years old, Schatz has the promise of serving many years in the U.S. Senate and accumulating all important seniority for the constituents of Hawaii.