Will the defamation case against Kari Lake hurt her Senate campaign fundraising?

The financial pressure on U.S. Senate candidate Kari Lake may have spiked last week when she chose not to defend her claims of a stolen election in Arizona and heads to the damages phase of a defamation lawsuit.

It comes at a time when the financial stakes for Lake’s campaign are quickly rising, too.

Lake, the Republican Senate race front-runner, was well behind the $6.5 million in cash that Rep. Ruben Gallego, the only prominent Democratic challenger, had entering the year. And there are signs his campaign is banking on taking in significantly more money, especially since Sen. Kyrsten Sinema, I-Ariz., said she won’t seek another term.

By contrast, Lake’s campaign effectively began the year with far less than the $1.1 million she reported in cash and now finds herself pulled back into a thicket that national Republicans have long sought to avoid: election denialism.

Lake has cornered the endorsements of former President Donald Trump, about half of the GOP senators in Washington she hopes to join, as well as the early backing of the National Republican Senatorial Committee, the arm of the national GOP that works to elect Republicans to the Senate.

But she still hasn’t won the backing of outgoing Senate Minority Leader Mitch McConnell, R-Ky., whose allies at the Senate Leadership Fund have long operated one of the best-funded support networks for Republican candidates.

And some prominent Arizona Republicans, such as former gubernatorial rival Karrin Taylor Robson and former two-term governor Doug Ducey, have been publicly silent on Lake’s candidacy.

Lake’s legal and campaign messaging both have an air of confidence about them.

In a statement from her campaign, Lake’s team didn’t address how, if at all, the defamation case might impact the campaign moving forward. Instead, they defended her views and reiterated her view that Arizona can’t afford to put Gallego in the Senate.

"Arizonans are smart and love the First Amendment. Kari stands by her statements and had every legal right under the First Amendment to criticize government officials, paid by the taxpayer,” the statement said, adding that Maricopa County Recorder Stephen Richer, the plaintiff, still needs to prove her words damaged him.

"Kari Lake is laser focused on defeating Ruben Gallego. (Senate Majority Leader) Chuck Schumer (D-N.Y.) is terrified of Kari and deeply worried about how weak a candidate Ruben is in Arizona. That’s why he’s spending millions to bail him out. Arizonans want a candidate who will secure the border and lower costs. Ruben has been in Congress for a decade and only made things worse.”

Republicans in Arizona are watching to see if Lake can truly financially compete after a string of well-financed Democratic wins in the state.

“The biggest thing to look for is how do the money people back East view this? How do the people at the NRSC and the SLF view this?” said Barrett Marson, an Arizona-based Republican political consultant. “If they decide to pass on spending $10 million or $20 million in Arizona, that’s the biggest repercussion in the campaign.”

Tate Mitchell, a spokesman for the National Republican Senatorial Committee, made clear the organization is still behind Lake without addressing finances or the defamation case.

"Arizonans are looking for someone who will secure the border, get crime under control, and bring an end to the reckless Biden agenda that sent costs skyrocketing for hardworking families," he said. "Those are the issues Kari is prioritizing in her Senate race, and that is why she is going to win in November."

Constantin Querard, an Arizona-based Republican campaign consultant who supports Lake’s GOP rival, Pinal County Sheriff Mark Lamb, said he believes small-dollar donors are unlikely to care about Lake’s legal issues.

“I don’t think it’s changing any voters’ minds,” he said. “From a financial donor perspective, people who like her and give her money probably aren’t following the details of the case closely at all. If she says the establishment is waging lawfare against me to bankrupt me just like Trump, they’ll probably believe it.”

The biggest problem, Querard said, could be in a general election for Lake when Gallego points to the lawsuit as a sign that she “surrendered without a shot.”

The defamation case brought by Richer, a Republican, could impact Lake’s personal finances and poses a wider concern for the GOP as it tries to retake the Senate.

Richer sued Lake for claiming he engaged in fraud in the 2022 gubernatorial election, which she narrowly lost. Richer says he and his family have suffered threats from those acting on Lake’s bogus claims. Lake didn’t defend against the allegations, and the case now heads to determining what damages Lake owes him.

Lake's defamation suit: Judge says Kari Lake conceded defamation suit; discovery could still proceed on damages

Lake engaged on social media with a Trump-supporting Cleveland-area pastor who was already dismayed by her legal strategy.

“I’m getting tired of the Right getting ridiculed by the Left because of crap like this all the time,” Darrell Scott wrote.

When Lake suggested he consider financing a $3 million lawsuit, he said, “I’ve lost over 20 million dollars since 2015 from supporting Trump. I’ve been boycotted, had death threats, slandered, etc while you were quiet. You don’t want to do this with me.”

Scott could not be reached last week to elaborate.

Quarterly campaign finance reports are due later this month and will provide a picture of the Senate race through the end of March.

That was a period when Gallego’s campaign found its own new sources of Democratic-aligned support.

With Sinema out of the race, Schumer, the Democratic Senate leader from New York, endorsed Gallego in a move expected to bring wider Democratic Party funding with it. The Democratic Senatorial Campaign Committee, the party's equivalent to the National Republican Senatorial Committee, backed Gallego as well.

U.S. Sen. Mark Kelly, D-Ariz., one of the top fundraisers in Congress, also endorsed Gallego and said he has asked his vast donor base to now help Gallego.

Gallego began advertising on television in March in a move that typically signals the beginning of a sustained presence on screens that continues through the election. For its part, Lake’s campaign called his early advertising a sign of desperation, not financial strength.

While Lake has picked up the backing of many of the top Republicans in the country, it’s unclear whether that will translate into significantly more money.

For example, Lake held a fundraiser with at least 19 Republican senators in Washington on the day Sinema announced she was quitting politics, at least for now.

Lake's campaign said her fundraiser pulled in more than $330,000 from the event.

The day after Sinema’s announcement, Gallego said his campaign brought in more than $1 million.

In her only quarter in the race, Lake’s fundraising was clearly solid.

She raised $2.1 million from all sources in the final three months of 2023 and ended that quarter with nearly $1.1 million in cash. Even more heartening, a substantial fraction of her haul came from small-dollar donors, which is usually interpreted as a sign of broad appeal.

But at least $378,000 of Lake’s cash is earmarked for the general election and can’t be spent unless and until Lake is formally the GOP nominee.

That can’t happen until after the July 30 primary. Voting for the general election begins in early October.

Beyond that, Lake’s campaign also has $308,000 in debt. While federal rules don’t require the debts to be paid on a set schedule, her creditors could expect payment before the election, when her ability to raise significant funds to cover those debts is greatest.

Together, the money designated for the general election and her campaign debts effectively bring down her cash figure to about $397,000. About $68,000 of the campaign’s receipts are earmarked for a recount.

By comparison, Lamb, who is also running for the Republican nomination, had about $256,000 in cash entering January.

The McConnell-aligned Senate Leadership Fund has already reserved advertising time in Montana and Ohio, two states that McConnell has long said figure prominently in the GOP’s plans to retake the Senate. The Senate Leadership Fund hasn’t settled on potential second-tier states, which could include Senate contests in Arizona, Michigan, Nevada, Pennsylvania and Wisconsin.

To the detriment of then-GOP Senate nominee Blake Masters, the Senate Leadership Fund in 2022 canceled its Arizona spending and largely redirected it to Ohio to help elect now-Sen. J.D. Vance, R-Ohio.

Masters that year lost his race against Kelly.

This article originally appeared on Arizona Republic: Could Kari Lake defamation case affect Arizona's Senate race?