Ted Cruz backers plan $1 million push on gold standard

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  • A new group inspired by Ted Cruz's plan to tie the U.S dollar to a unit of solid gold is planning to spend up to $1 million to back his hopes in New Hampshire

(CNN)They're putting gold behind gold.

A new group inspired by Ted Cruz's plan to tie the U.S dollar to a unit of solid gold is planning to spend up to $1 million to back his hopes in New Hampshire, a well-financed push meant to elevate him to first-tier status there on the appeal of an offbeat issue.
The Lone Star Committee, a new organization filed under section 527 of the tax code, is planning to flood the Granite State airwaves with radio ads highlighting Cruz's plans for a sound dollar.
    Given that Cruz's biggest financial supporters have been slow to sink resources into New Hampshire, Lone Star's investment is shaping up to be the biggest play yet by Cruz forces to perform well in a state that might not naturally be drawn to a tea party renegade.
    The new tax-exempt group plans to broadcast only issue spots, steering clear of more overt language used by super PACs to directly back their candidate or, more commonly, attack their rivals.
    "We see ourselves as waging the idea battle on economics, at least to Republican primary voters," said Rich Danker, the GOP strategist behind the group who believes monetary policy matters to voters. "It's overrated how much how they drift toward personality. At the end of the day, it's really where the candidates are on policy."
    The wonky outside spenders are the latest addition to the fold of overlapping, at times diverging, groups trying to spend big money to support Cruz independently. But it is the first Cruz group dedicated to issue spending, which several presidential candidates have used to give an extra boost to their primary bids.
    The group does not appear to have the blessing of the Cruz campaign in Houston, which Danker said he has had no contact with since launching.
    "They would probably be most comfortable not having to worry about what I'm doing," said Danker, explaining why he didn't seek the permission of Cruz aides. "I wanted to sort of do things that would lead the campaign in the direction of emphasizing their economic message and showing them it can work."
    The Cruz campaign did not respond to requests for comment.
    But the founders are no strangers to Cruz circles. Danker met privately with Cruz for an hour last year when managing the New Jersey Senate race of Republican Jeff Bell, and he is a close associate of Sean Rushton, Cruz's top economic adviser, who Danker says inspired him to set up a group like Lone Star.
    The group, which Danker said raised about $100,000 in the first week, is budgeting toward a $1 million buy focused almost entirely in New Hampshire, where Cruz has climbed but still remains solidly behind Donald Trump, who has led polls there for months. It's hired a North Carolina fundraiser, Jay Rao, to collect big checks. And they're planning to have a rapid-response arm dedicated to what they say will be feverish attacks on Cruz's contentious backing of the gold-tied dollar.
    "They came fast and furious, and they did not stop for the past two months," said Brian Domitrovic, the policy mind behind the group, who expects continued criticism of Cruz on gold. "We'll be ready for it."
    Cruz broached the gold standard in his well-regarded showing at the CNBC debate two months ago, although he does not push aggressively for it on the stump
    "Instead of adjusting monetary policy according to whims and getting it wrong over and over again and causing booms and busts, what the Fed should be doing is, number one, keeping our money tied to a stable level of gold," he said on stage, agreeing with Rand Paul that the Federal Reserve is a "series of philosopher-kings."
    Bashing the Federal Reserve has become in vogue for Republican hopefuls, but Cruz's plan to limit changes in the value of U.S currency by tying it to gold remains controversial in mainstream economics. When the University of Chicago asked 40 leading economists three years ago if Americans' lives would improve with a gold standard, not a single one said yes.
    "This is the most idiotic idea I have ever heard from a presidential candidate. The entire economics profession thinks it's a joke," said David Blanchflower, a leading monetary policy expert at Dartmouth. "It would be more sensible to go on the goldfish standard."
    Asked if he could envision the issue having any appeal with GOP primary voters in New Hampshire, Blanchflower replied: "None whatsoever."
    Cruz's backers disagree, pitching the issue as a political winner for a Republican electorate skeptical of centralized power in the Federal Reserve, especially in libertarian-leaning New Hampshire.

    Unique tax structure

    One potential obstacle for organizers is their decision to file as a 527 committee, rather than the two options most commonly used today by big money operatives: a super PAC, which must disclose the identities of donors, or as a nonprofit, which can shield those names but cannot run as many advertisements calling for the direct election or defeat of candidates.
    Lone Star shares more in common with a super PAC — Danker said it plans to disclose its donors monthly to the IRS. But the other big campaign spender that is choosing to file with the IRS, a nonprofit supporting Marco Rubio, Conservative Solutions Project, has been criticized by Republican rivals and campaign finance reformers for hiding the names of people with a large influence on the political process.
    In some ways, Lone Star will suffer the worst of both worlds: The group would not be able to spend more than half of its money on federal express advocacy, said Jason Torchinsky, a Republican campaign finance attorney, even though it will still identify its donors. Danker defended the tax incorporation as the best option for an issue-based group, though he said it could reclassify as a super PAC in the future.
    "Since Citizens United, when you can have super PACs do unlimited express advocacy with unlimited corporate and individual dollars, what they're doing would be rare," Torchinsky said.