The long-simmering conflict over Ted Cruz’s stance on ethanol erupted into a full-fledged war in Iowa in recent weeks, with Donald Trump putting the exclamation mark on the debate last night.
“But with the ethanol, really, he’s gonna come a long way because he’s right now for the oil,” Trump said in his opening remarks, targeting Cruz specifically after the Texas Senator’s criticisms of Trump emerged earlier that day. “But I understand because big oil pays him a lot of money. He’s got to be oil, right? The oil companies give him a lot of money.”
“He gets a lot of money from the oil companies, and he’s against ethanol and everything else you’re talking about,” Trump added later during Q&A. “And I’m not. I’m totally in favor. And, you know, it’s a big industry here, it’s a big industry. You know if that industry is upset, Iowa’s got problems.”
Cruz has come under attack for most of the year from pro-ethanol groups and Iowa voters over his ethanol stance. He co-sponsored legislation repealing the Renewable Fuel Standard, portraying it as a stance against all government assistance for a free-market system. He’s even been the only presidential candidate from either side to decline a tour of an ethanol plant or a meeting with business leaders to learn more about the industry.
Cruz has consistently argued he’s against all forms of subsidies (though the RFS is a mandate, not a subsidy), and tried presenting his ethanol position as a principled stand, showing he’s willing to stand up to interest groups despite the blow-back. And while opposing ethanol will certainly cause him problems in rural areas and among conservatives with ties to the industry, there’s also plenty of Republican caucus-goers who don’t see it as one of their top issues.
However, the much larger danger for Cruz comes on the appearance of money influencing his decision, and potential hypocrisy on the issue. That’s where Cruz’s ties to the oil industry come in, and where Trump decided to directly hit him last night.
Part of Cruz’s strength in the primary has come from his well-funded Super PACs, many of which are heavily financed by oil interests. A $10 million check from Toby Neugebauer, a major oil investor, funds one of the Super PACs. $15 million has flowed to another Cruz Super PAC, Keep The Promise, from a pair of billionaire brothers from Texas who made their fortune from the fracking industry.
In addition, Cruz’s presidential campaign has gotten more donations from the oil and gas industry than any other, raking in over $500,000. That industry was also Cruz’s second-largest contributor to his Senate campaign and PAC in recent years. And Cruz himself has a financial stake – he reported $700,000 in investments in oil and gas companies in a 2014 personal financial disclosure form.
There’s also the matter of some of Cruz’s recent endorsements. Congressman Steve King announced his backing of Cruz several weeks ago. One of King’s sons was hired on by a Cruz-supporting Super PAC earlier this year.
On that front, Trump often sells himself as the most trustworthy candidate because he’s independently wealthy enough that he can self-fund his campaign (even though he’s not). So watch for Trump to expand on Cruz’s oil industry ties to appeal to an electorate concerned about politics-as-usual.
On the “hypocrisy” front, ethanol groups like America’s Renewable Future has pressed Cruz hard in recent weeks over his support for oil subsidies, with radio ads and direct mailers flooding the state on the issue. The Cruz campaign has pushed back by saying it’s a false claim, that Cruz supports ending all subsidies for every energy industry.
However, America’s Renewable Future says that’s a lie, pointing to specific programs he’s supported in the past. A number of preferential tax breaks benefit the oil industry by allowing them to immediately expense the cost for new oil wells, a measure that provides an estimated $13.5 billion to those companies over ten years. Cruz has defended keeping those, and has said those aren’t subsidies specific to oil, but the tax break only applies to things the oil industry does.
It’s looking increasingly likely that the last month and a half before the Iowa Caucus will feature Cruz and Trump battling each other for the top spot. Starting Line spoke to about a dozen attendees at Donald Trump’s rally in Des Moines before the event began. Aside from one Rubio supporter, everyone was either between Trump and Cruz, or they were a Trump supporter who still liked Cruz. They all mentioned they liked both mens’ “tell-it-like-it-is” speaking style, that they’re not “politics-as-usual,” and that they fight the establishment.
Trump’s criticism of Cruz strikes at all three of those qualities. How this fight plays out over Trump, Cruz and ethanol could have a major impact on the final decision and winner of caucus night.
by Pat Rynard