Politico: Hagan's family directly profited from stimulus she voted to enact

Politico’s scoop on Kay Hagen is a couple of days old, but it’s worth mentioning in a tight Senate race in North Carolina, and not just for the scoop itself. Hagan’s vote on the 2009 stimulus package has come under fire after Politico discovered that $390,000 in ARRA grants went to a firm owned in part by her husband Chip:


When Kay Hagan voted for President Barack Obama’s 2009 economic stimulus package, the Democratic senator hailed it as “the best way forward for working families across North Carolina.”

One of the families that later benefited is her own.

JDC Manufacturing, a company co-owned by the Democratic senator’s husband, Chip, received nearly $390,000 in federal grants for energy projects and tax credits created by the 2009 stimulus law, according to public records and information provided by the company.

This isn’t exactly a clean shot for Thom Tillis, however, whose own vote on an enabling bill for the stimulus in the North Carolina legislature ended up benefiting a bank in which he had invested:

Hagan’s GOP opponent, statehouse Speaker Thom Tillis, voted in 2010 to allow the state to participate in the federal renewable energy tax credit program, which benefited a bank in which he owns at least $50,000 in stock.

That may be easier to explain than Hagan’s vote on the massively expensive stimulus bill that failed to stimulate anything — except for those lucky enough to be in on the grants.Tillis’ benefit was indirect, while Hagan’s family directly benefited from federal grants issued in the stimulus effort. The financial records for the Hagans’ income show that they earned less than $201 in 2008 from JDC, while their income from the firm increased to almost $134,000 by 2013 — so the stimulus presumably worked for the Hagans.


They dispute that analysis, claiming that the boost in income came from a change in rental property agreements and a re-fi on a mortgage. That’s where the story gets even more interesting:

The firm said the reason for the income spike was a change in its rental agreement with Plastics Revolution; its monthly rent went from roughly $23,000 in 2006 to nearly $47,000 in 2013 to bring the rate in line with market prices. The rest of the income, company officials said, came from refinancing its mortgage.

Caitlin Legacki, a former Democratic operative and now a spokeswoman for the company, said that JDC Manufacturing agreed to charge the plastics company a below-market rate in 2006 in order to allow the firm to invest in additional equipment, saying the plan had been to raise the rent in 2011 all along. She said the company was required to pay for the entirety of the project upfront and that the stimulus money reimbursed a portion of it.

“At no point did the energy efficiency upgrades have any bearing on the rent increases or business terms between” the two companies, Legacki said.

Who is Caitlin Legacki, other than “a former Democratic operative”? Eric Wemple at the Washington Post connects the dots and finds a White House connection:


Legacki is listed as a principal at Precision Strategies, the crisis-management/branding/organization-building outfit piloted by partner Stephanie Cutter, a former top Obama campaign official and a CNN pundit. Nowhere in the piece does Politico cite the connection between Legacki’s work for the Hagan company and Precision Strategies, nor her standing as former communications aide for Kay Hagan.

Those omissions hardly poison the central contentions of the Raju-Bresnahan enterprise reporting. But they do deny readers a fuller picture of the goings-on. Anytime that beleaguered public officials call in the “principal” of a top Washington firm connected to the White House, that’s a bit of detail that’s useful to readers. They deserve to know whenever there’s a down pillow’s worth of coziness in a senator’s PR defenses.

Precision Strategies couldn’t have asked for a better arrangement. Crisis communicators, after all, prefer not to be identified as crisis communicators in articles exposing a crisis. Such identification hurts their crisis effectiveness. And if there’s any agenda that Washington journalists can ethically harbor, its an agenda to put crisis communicators out of business. Identify them as such whenever they rear their heads.


On one hand, it’s perhaps fitting that Cutter’s firm is riding to Hagan’s rescue, since it was Obama’s failed stimulus plan that helped create the problem. However, that will create a bigger problem for Hagan, assuming Tillis feels confident enough in his own explanation to use this. Hagan wants voters to consider her an independent voice for North Carolina, not a rubber stamp for Barack Obama in the Senate. That will be a difficult argument to sustain when Obama’s $800 billion pork-barrel bill put boatloads of cash into her husband’s firm and then got an Obama-connected PR firm to flack for her defense of that haul.

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