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Natural gas industry money pouring into Pa. governor's race, mostly to Corbett

In what seems to be a reprise of four years ago, hundreds of thousands of dollars are pouring into the race for Pennsylvania governor from company executives with ties to the state's burgeoning natural gas industry.

In what seems to be a reprise of four years ago, hundreds of thousands of dollars are pouring into the race for Pennsylvania governor from company executives with ties to the state's burgeoning natural gas industry.

But the donations, almost entirely to Gov. Corbett, are flowing with one key difference: The stakes are even higher for both the companies' fracking profits and the Republican Corbett, one of the country's most vulnerable governors.

Corbett is being challenged by Democrat Tom Wolf, a York County businessman who has pledged to add a 5 percent tax on fracking.

Nearly $1 million that will ultimately benefit Corbett's reelection bid arrived in January from executives of the Ariel Corp., an Ohio firm that builds compressors used to extract natural gas from Pennsylvania's Marcellus Shale formation.

In February, according to state campaign-finance records, about $240,000 arrived from the president of Chief Oil & Gas, a Texas company that leases 200,000-plus acres in Northeastern Pennsylvania for natural gas drilling and exploration.

The money is being channeled through the Republican Governors Association to a separate political action committee it established in Pennsylvania. The satellite organization is Corbett's largest single donor so far in his bid for reelection.

He will need the money.

For the first time in Harrisburg, legislators are seriously discussing the possibility of a drilling tax because of a looming budget deficit that could reach $1.2 billion. And recent polls show that Corbett's stance on fracking, which includes his opposition to a new tax, has increasingly become a liability.

The donations from the shale gas industry have become "a lifeline" for Corbett, but increasingly an albatross as well, said Chris Borick, a political-science professor at Muhlenberg College.

"He needs every resource he can get given his poor standing in the polls and a very uphill battle for reelection," Borick said.

And yet the support is placing Corbett in a tough situation as the state faces a large budget shortfall.

"He's pushing it," Borick added. "Corbett is inching toward an untenable position where his stance on this issue goes more and more against what the public would like. At the same time, the high support from the shale gas industry leaves him in a difficult position for finding compromise."

Corbett was elected in 2010 after campaigning with a pledge to enact no new taxes, including one on the fracking industry. His campaign had received nearly $1.3 million from the oil and natural gas companies, according to the National Institute on Money in State Politics. That figure does not include funds from the industry that was filtered through the Republican Governors Association, which gave Corbett $6 million during his first campaign, the institute stated.

'Impact fees'

Since the election, Corbett has imposed no new taxes on the industry. But in 2012, he signed into law Act 13, which allowed local governments to impose "impact fees" on fracking and has so far raised $630 million, the governor's office said last week. The industry also has paid out nearly $2 billion in corporate and income taxes and boosted the state's economy, according to Corbett.

Some of Corbett's 2010 donors from the fracking industry have reappeared in campaign-finance reports, although not necessarily his.

For instance, Trevor Rees-Jones, president of the Texas-based Chief Oil & Gas, gave Corbett's campaign $50,000 in 2010. This year, Rees-Jones donated $250,000 to the Republican Governors Association in Washington, which in turn fed $237,000 of it to the Pennsylvania PAC.

The satellite PAC contributed $1.6 million to Corbett's campaign in late April. And it had $10 million total funds available as of early May.

Large chunks of that money, funneled through the national Republican Governors Association, came from executives with ties to the shale gas industry in Pennsylvania.

Jon Thompson, spokesman for the association, said donors don't know which Republican governors race their money will benefit. However, almost the entirety of some individual contributions are flowing into Pennsylvania, no matter what industry the donor is in. For instance, most of a $1 million donation in December from casino mogul Sheldon Adelson ended up in the Pennsylvania PAC.

"We don't tell people their money is going to only reelect Gov. Corbett or another candidate," Thompson said. But he added: "There's no secret that we're playing very heavy defense this year [in Pennsylvania]."

Democrats, too

Last week, the Pennsylvania Democratic Party lambasted Corbett for taking money from oil and gas company executives, including the donations to the Republican Governors Association.

But the Democratic Governors Association has taken money from the energy sector as well. For instance, in March the Democratic Governors Association received $200,000 from Duke Energy Corp., a North Carolina-based electric company that wants to pipe cheap natural gas from the Marcellus Shale to its power plants. In April, the Democratic Governors Association gave Wolf's campaign $36,000 in "research services."

Borick said polls show that the majority of Pennsylvania's voters support fracking but want it taxed.

"Democrats haven't been over-the-top negative on the industry at all," he said. "The industry will start to hedge if they think Corbett is not going to win. Then the spigot turns off. They're not going to throw good money after bad."

Corbett's Top Contributors

Here are the top contributors in the Pennsylvania governor's race with ties to the shale gas industry. These donors gave to the Republican Governors Association, a national organization that funneled the money into a separate political action committee in Pennsylvania.

The state PAC is so far the largest individual donor in Gov. Corbett's reelection campaign.

$488,000: Karen Wright, president and CEO of Ariel Corp., an Ohio-based company that builds compressors used for drilling in the Marcellus Shale.

$488,000: Thomas Rastin, executive vice president of Ariel Corp.

$238,000: Trevor Rees-Jones, president of Chief Oil & Gas, a Texas-based company that leases 200,000-plus acres in Northeastern Pennsylvania for natural gas drilling and exploration.

$88,000: Thomas O'Malley, chairman of PBF Energy, a New Jersey-based energy company whose refineries are fueled with natural gas from the Marcellus Shale.

$78,000: Anne Marion, chair of the Texas-based Burnett Oil Co., which operates wells in the Marcellus Shale.

SOURCE: State campaign-finance recordsEndText

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