Here's why data center campaign contributions to Nevada politics are rising

Political contributions from companies with a data center footprint in Nevada are on the rise ahead of a legislative session where the industry is likely to face unprecedented scrutiny, a Nevada Independent analysis found.

In May, Jessica Roy, the wife of Switch founder Rob Roy, gave $1 million to a PAC supporting Gov. Joe Lombardo (R). From July through September, companies with an existing or planned data center donated more than $100,000 to candidates and groups, the highest quarterly total in eight years (excluding the $1 million donation from Roy). More than 65 percent of this money went to Democrats.

It's a notable development in donations from the industry, which has given about $17 million in donations to candidates and groups across the past two decades. More than 80 percent of this total came through Switch's efforts to pass an energy ballot initiative during the 2016 and 2018 election cycles. There was also a spike in the mid-2010s as Switch, a company at the center of Nevada's data center industry, eyed a lucrative tax break package.

The data suggests that although these companies have shown a willingness to spend in Nevada politics, its presence remains nascent. With the issues around data centers showing no sign of going away, that appears to be changing.

Ken Miller, a UNLV political science professor, said that data centers haven't had as much of a reason to consistently donate to Nevada officials and PACs.

"A lot of times some industries need to keep up a high level of maintenance of donation because they need to ensure that regulations on them don't change or they don't move against the competing industry," he said. "Those are the types of reasons why you maintain very high levels of political spending and that that hasn't been the case for data centers until now."

With its proximity to Silicon Valley and business-friendly tax policies, Nevada has emerged as a hotbed for data centers. So far, there are more than 80 data centers operating, under construction or planned in the Silver State, according to a tracker from More Than Just Parks, a group focused on protecting public lands.

The Indy's analysis included any company with a planned or built data center in Nevada, as well as people tied to those companies.

At the same time, the nature of Nevada's data center industry makes it difficult to directly link political donations to companies' data center activities.

Outside of Switch, many of the most prominent political donors with a data center footprint are large tech companies. Many of these donations could relate to the company's operations outside of data centers.

"Google, Microsoft, Verizon, these are all groups that have a variety of interests across different sorts of regulatory environments," Miller said. "They could really be anything."

Switch's donations

More than 90 percent of the political donations come from Switch, which has massive data center campuses in Las Vegas and the Tahoe-Reno Industrial Center. 

The company's donations took off in the 2010s as it successfully sought to bring a data center tax break package to Nevada and supported a failed ballot initiative to end the state's energy monopoly.

Switch has long supported members of both parties, with a slight lean for Democrats, who have long controlled the Legislature, except for the notable 2015 session when Republicans controlled both chambers and when the data center tax break bill passed. 

Up until this year, the company had donated about $840,000 to Democratic candidates and groups, compared with about $710,000 to Republicans, The Indy's analysis found. But the tides turned this year with Jessica Roy's $1 million donation to the pro-Lombardo PAC.

Lombardo had previously not received any money from Switch as governor or gubernatorial candidate. He did receive $10,000 in 2018 from Stella Roy, Rob Roy's then-wife, while serving as Clark County Sheriff, and the company also gave Lombardo $1,000 in 2016. By contrast, the company gave about $130,000 to former Gov. Steve Sisolak's (D) gubernatorial campaigns and associated groups.

Attorney General Aaron Ford (D), the Democratic nominee for governor, has pounced on the $1 million donation to Lombardo's PAC. Ford, who co-sponsored the data center tax break bill, has received about $35,000 from Switch over the years, but the most recent contribution was in 2021. 

Data centers have emerged as a prominent issue in the governor's race. Ford has pledged pausing the tax break program and banning water-intensive cooling technology statewide. Meanwhile, Lombardo has supported data centers — calling it the state's new "gold rush" — but has also curtailed the data center tax break program, requiring companies to cover their own power costs and ending relief on a tax that supports local schools.

In a statement, Prerna Jagadeesh, a spokesperson for Ford's campaign, said that Ford "has a plan to rein in data centers" and accused Lombardo of catering "to the data center interests propping up his campaign."

Switch did not respond to a request for comment about its spending habits. However, Missy Young, a senior fellow at the company, said during an IndyFest panel last week that "economic considerations" drive the company's political spending.

As an example, she thinks Ford's pledge to end the state's "right to work" law could "potentially negatively affect economic development and growth."

The money Switch gives to Nevada candidates pales in comparison to what it spent on the energy ballot initiative in 2016 and 2018. 

Following years of tensions with NV Energy, Switch left the energy utility and eventually threw its support behind a ballot question that would have required the state to adopt a competitive electric market. Altogether, the company poured more than $12.6 million to support the ballot question, topped off with a $10 million infusion of cash into a group behind the ballot question in 2018. That's the third largest single political donation in state history.

Despite easily passing in 2016, the ballot question failed overwhelmingly two years later — in large part because NV Energy poured a record amount of more than $63 million into a campaign opposing it.

Other companies

Almost half of the other donations came from groups tied to Lumen, which has facilities in Las Vegas and Reno.

The company has consistently given money to Nevada officials across the past two decades, but much of it came under its former name CenturyLink and its telecommunications company, CenturyTel, Inc. 

Other top donors were Google and Verizon.

One notable company was Novva, a Utah-based outfit with data centers operating in North Las Vegas and the Tahoe-Reno Industrial Center. Novva CEO Wes Swenson gave $10,000 last year to Scott Black, a candidate for North Las Vegas mayor, and $5,000 to Lombardo in May.

Novva did not respond to a request for comment.

In a statement, Black, who did not respond to The Indy's question on data centers earlier this year, said he is "very attuned to concerns about water, electricity, and neighborhood impacts" of data centers, and that as mayor he'll "require clear answers about power demand, noise, air quality, and costs to our residents before the city considers any data center projects." He also sat on the board of the Southern Nevada Water Authority when it placed a moratorium on evaporative cooling.

Black's opponent, Assm. Daniele Monroe-Moreno (D-North Las Vegas), has received $19,000 from Switch over the years, including a $10,000 donation in late September.

In a statement, Monroe-Moreno said she "can't be bought," and that as mayor, she wouldn't approve data centers unless there is input from residents and commitments to conserve water and not raise power costs. Monroe-Moreno previously told The Indy that she does not support a data center moratorium.