Politico- Honda Heads To State Convention Trailing In Cash On Hand

Press Release

By Carla Marinucci

Rep. Mike Honda -- the eight-term Silicon Valley Democrat -- is trailing his opponent in fundraising, putting him in an unusually precarious position as he heads into the California Democratic Party state convention later this month.

Honda, 74, a fixture in Bay Area politics for more than a generation, is facing a House ethics investigation, and now has has $572,000 cash on hand, less than half the cash on hand of his Democratic opponent Ro Khanna, 39, with $1.7 million.

The latest campaign finance filing shows Honda spent most of the $292,000 he raised in the final quarter of 2015, much of it to pay for legal fees, fundraising and crisis communications.

Perhaps even more harrowing for the Democratic incumbent, Honda will have to personally compete for the endorsement of Democratic grassroots delegates at the state convention beginning Feb. 28 in San Jose. That development comes after Honda failed to secure what have been, in the past, routine re-election endorsements from some key 17th Congressional district Democratic clubs that could have secured a pre-convention endorsement from the party.

The latest campaign filing with the Federal Elections Commission show Honda spent $276,000 of the $292,000 he raised in the final quarter of 2015, an alarming burn rate as the congressman faces a second challenge from Khanna, who came within 4 percentage points of unseating him in 2014.

Honda spent more than $100,000 on legal fees and crisis communications in the last quarter of 2015, records show. Honda is currently being investigated by the House Ethics Committee after charges that he and his staff may have improperly mixed official and campaign business.

The latest filing shows the San Jose Congressman spent $15,000 for the services of Singer & Associates, a well known San Francisco-based crisis communications firm; $86,000 to pay law firms, including Akin Gump and Miller & Chevalier; and $12,000 to Austin-based Stanford Campaigns, which describes itself on Facebook as a Democratic political consulting group specializing in opposition research. He also spent $60,000 on fundraising services, the documents show.

Honda's political director, Vedant Patel, downplayed the candidate's financial issues.

"Mike Honda has raised more money at this point in the campaign cycle than in 2014 and like last time, the campaign is on track to raise the resources necessary to win this race,'' he said in an email response to POLITICO. "Our campaign knows that this is one of the most competitive Congressional races in the country and we will fight tooth and nail till election day."

But Khanna's campaign has seized on the House ethics investigation as evidence of Honda's weakness, and said the incumbent's "95 percent burn rate" should be an issue of concern to Democratic donors.

"While Ro Khanna is well positioned to communicate his message to voters, Mike Honda is well positioned to communicate his defense to the House Ethics Committee. Because, priorities," said Hari Sevugan, a Khanna campaign spokesman.

Larry Gerston, an emeritus professor at San Jose State, said the race will be a "loyalty test" for groups that have backed Honda in the past.

"He'll need labor to come in with both guns blazing. ... In 2014, he recruited a lot of money from Super PACS, but the question is if labor will be able to rescue him," Gerston said. "There will be so many other statewide ballot races that they will want their imprint on. There will be a bit of a loyalty test.

Gerston called it a dilemma for Democrats, since "Honda is tried and true as a liberal," but Khanna "represents a new font of voters and financial infusions into party coffers.

Two Republicans -- accountant Ron Cohen and tech executive Joel Van Landingham -- are also running for the seat, but under the state's "top two" primary system, Honda and Khanna could face each other in the general election in the heavily Democratic district.

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