February, 2012

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New York Times: Loose Border of ‘Super PAC’ and Campaign

Saturday, February 25th, 2012

The fantasy that candidates and their campaigns are not effectively coordinating with SuperPACs should be very clear from this NY Times report.

Both parties are spending record amounts of money, from disclosed and undisclosed donors as they hide behind an impotent Federal Elections Commission.

New York Times

When Mitt Romney’s presidential campaign needs advice on direct mail strategies for reaching voters, it looks to TargetPoint Consulting. And when the independent “super PAC” supporting him needs voter research, it, too, goes to TargetPoint.

Sharing a consultant would seem to be an embodiment of coordination between a candidate and an independent group, something prohibited under federal law. But TargetPoint is just one of a handful of interconnected firms in the same office suite in Alexandria, Va., working for either the Romney campaign or the super PAC Restore Our Future.

Elsewhere in the same suite is WWP Strategies, whose co-founder is married to TargetPoint’s chief executive and works for the Romney campaign. Across the conference room is the Black Rock Group, whose co-founder — a top Romney campaign official in 2008 — now helps run both Restore Our Future and American Crossroads, another independent group that spoke up in defense of Mr. Romney’s candidacy in January. Finally, there is Crossroads Media, a media placement firm that works for American Crossroads and other Republican groups.

The overlapping roles and relationships of the consultants in Suite 555 at 66 Canal Center Plaza offer a case study in the fluidity and ineffectual enforcement of rules intended to prevent candidates from coordinating their activities with outside groups. And there has been a rising debate over the ascendancy of super PACs, which operate free of the contribution limits imposed on the candidates but are supposed to remain independent of them.

In practice, super PACs have become a way for candidates to bypass the limits by steering rich donors to these ostensibly independent groups, which function almost as adjuncts of the campaigns.

While insisting that the tangle of connections does not violate any laws, Alexander Gage, TargetPoint’s founder, said he understood how it could look “ridiculous.” His own firm had taken steps, he said, to prevent improprieties, including erecting “a fire wall” separating employees who work for the Romney campaign and the super PAC.

“We go to great lengths to make sure that we meet all legal requirements,” he said. “I have removed myself personally from working on either Restore Our Future or Romney stuff because of this sort of potential conflict of interest.”

The prohibition against candidates working in concert with independent political committees has its roots in Watergate-era reforms intended to prevent large donors from gaining improper influence over elected officials. But it has taken on added significance in the wake of recent court decisions that opened the spigot for unlimited contributions to the independent groups.

Super PACs have collected more than $100 million so far, much of it from a relatively small collection of well-heeled individuals or companies who are free to give millions to these outside groups but no more than a few thousand dollars to a candidate’s own committees. Those unlimited contributions are fueling a barrage of negative advertising in the Republican primaries.

But while the Federal Election Commission has established elaborate, though narrow, guidelines for determining whether the creation of a specific campaign advertisement violates the coordination ban, it has not focused on other kinds of activities between all PACs and candidates. Rules the commission adopted in 2003, still on the books, allow for regulation of this gray area, but they have been largely ignored.

“Most of the focus so far has been on the ads, but there may be a lot of other activity that is being coordinated between the campaigns and the super PACs that could be seen as resulting in a benefit to the campaign,” said Lawrence M. Noble, a campaign-finance lawyer at Skadden, Arps and a former general counsel for the election commission.

The regulations on coordination include a general prohibition on expenditures “made in cooperation, consultation or concert with, or at the request or suggestion” of candidates and their representatives. The commission’s records show that when devising this rule, it turned aside pleas from political groups to limit enforcement only to ads, saying such a narrow focus was not what Congress intended.

Nine years later, however, there is little evidence that the commission has followed through on this intent.

The commission, made up of three Republicans and three Democrats, has long been divided along partisan lines on how far to go in enforcing rules on coordinated expenditures, often resulting in paralysis.

Last fall, the commission was asked by American Crossroads if it could broadcast certain ads, “fully coordinated” with a candidate, who would be consulted about the script and appear in the advertisement. The group argued that it would not be improper as long as the ad ran outside of a time window established by the commission for “electioneering communications.”

The commission deadlocked and could reach no conclusion.

“The campaigns know the F.E.C. isn’t going to enforce the law, and so they’ve decided to do whatever they want,” said Fred Wertheimer, whose watchdog group, Democracy 21, has complained to the Justice Department about the lack of enforcement. “What is going on is just absurd.”

The commission declined to comment for this article.

From the start, there has been no doubt that the super PACs are closely entwined with the candidates they support.

Priorities USA Action, which supports President Obama, was formed by two former White House aides, and Obama administration officials are helping it raise money. A former top aide to Newt Gingrich helps run a pro-Gingrich super PAC, Winning Our Future. And Foster S. Friess, a major donor to Rick Santorum’s super PAC, often travels with the candidate.Mr. Romney has often blurred the distinction between his campaign and Restore Our Future. Last summer, discussing a large donation to the super PAC by one of his former business partners, Mr. Romney characterized it as a donation to himself. He appeared at a fund-raiser for Restore Our Future and has publicly encouraged people to donate to it.

Campaign spending reports filed by both the super PAC and the Romney campaign shed additional light on just how closely interconnected the two entities are.

Restore Our Future, for example, has paid TargetPoint Consulting nearly $350,000 for survey research. Meanwhile, the Romney campaign has paid TargetPoint nearly $200,000 for direct mail consulting. In one instance, the campaign and the super PAC paid TargetPoint on the same day.

Mr. Gage, a senior strategist in Mr. Romney’s 2008 campaign, is married to Katie Packer Gage, a deputy campaign manager of the current Romney campaign. The campaign has paid her firm, WWP Strategies, nearly $250,000 for strategy consulting.

Both of their companies share an office suite with the Black Rock Group, a political consulting firm co-founded by Carl Forti, who worked as political director for Mr. Romney’s 2008 campaign and helps direct Restore Our Future. The super PAC has paid Black Rock about $21,000 for communications consulting.

Mr. Forti declined to comment. Mr. Gage said that his firm had a separate work space from Black Rock, divided by a conference room. “It’s not like we’re a commingled office,” he said.

His wife’s office for WWP Strategies is in the same area as TargetPoint’s, he said, but she has been working out of the Romney headquarters in Boston for the most part. Mr. Gage said they do not discuss the campaign.

Gail Gitcho, a spokeswoman for the Romney campaign, said the campaign followed both the letter and the spirit of the law on coordination.

“We know the law,” she said, “and we abide by it scrupulously.”

The spending reports suggest that the Romney campaign and the super PAC, if not coordinating, have been closely following each other’s fund-raising events, though Ms. Gitcho emphasized that no joint fund-raisers had been held.

Last summer, the super PAC and the Romney campaign employed Creative Edge Parties, a New York catering company, and each sent it a payment on the same day: the super PAC gave a check for $1,676 for a “fund-raising event,” while the Romney campaign sent $1,584 for “facility rental/catering services.”

On another occasion, Restore Our Future paid $1,500 as a fund-raising expense to the Waldorf Astoria in New York, where the Romney campaign held a fund-raiser in December. Around the same time, the Romney campaign paid the Waldorf $19,000 for “facility rental/catering services” and lodging.

And in mid-July, Restore Our Future wrote two checks to Sandie Tillotson, a cosmetics executive and a friend of Mr. Romney, reimbursing her for “event costs,” which appear to be associated with a fund-raiser held in her apartment on the top floor of the north tower of the Time Warner Center in Manhattan. Several weeks later, the Romney campaign also sent a check to the residential board of Ms. Tillotson’s building, which is home as well to the Mandarin Oriental hotel, for “facility rental/catering services.” (The campaign had a fund-raiser at the hotel on July 19.)

The overlapping connections of American Crossroads, the independent group tied to Karl Rove, with the Alexandria office suite are likely to draw more scrutiny in the general election, should Mr. Romney win the nomination. Mr. Forti is the group’s political director, and Crossroads is expected to be a big player in November.

While American Crossroads has not officially endorsed a candidate, it has been seen by some as tacitly supporting Mr. Romney. It issued a memorandum last month defending his electability in the face of attacks by the Obama campaign. That was soon followed by another, saying its earlier note “probably should have been clearer” that the group remained neutral in the Republican primaries.

Sunlight Foundation: Almost 400 former House staffers registered to lobby in last two years

Friday, February 24th, 2012

The revolving door is alive and well in Washington. In less than three years, at least 377 House staffers employed in personal and committee offices have left Capitol Hill to become registered lobbyists, a Sunlight Foundation analysis of U.S. House disbursement data and federal lobbying records finds.

More than two in five former House staffers who registered as lobbyists went to one of Washington’s many lobbying firms. One in five went to lobby for a for-profit corporation, and another one in five went to lobby for a business or trade association. In other words, corporate America is capturing the lion’s share of former Hill staffers’ expertise. A large number also represent state and local governments and universities in their work for lobbying firms.

Sunlight Foundation

These lobbyists come from all rungs of the House hierarchy. The 377 staffers who left to lobby included 50 legislative assistants, 32 chiefs of staff, 26 legislative directors, and 22 staff assistants.

Many lobbyists came from committees as well. The Committee with the clearest path to K Street was the Financial Services Committee, where nine of 71 staffers (12.7%) went off to lobby within two years, followed closely by Judiciary (9.0%) and Oversight and Government Reform (8.7%).

Congress’s loss is the private sector’s gain. When House offices lose staffers who have built up experience and relationships in Congress, private interests gain both their policy knowhow and their political networks. Meanwhile, the House offices often find themselves relying on the expertise of their former staffers who are now in the employ of private interests.

Recently, we noted that the average House office had a retention rate of 64.2% over a two-year period. Although the majority of departing staff do not move to K Street, 377 staffers is still a significant number.

For a complete list of all the staffers who registered to lobby, what office they worked in, and where they went to lobby, click here.

WHERE STAFFERS GO ON K STREET

More than 80% of former Hill staffers who leave to lobby take jobs at Washington lobbying firms (41.5%), individual corporations (21.3%) and business and trade associations (19.1%).

By comparison, fewer than one in ten go to work for a non-profit advocacy group. Only a single former House staffer went to work for a labor union, though a few do represent unions as part of their work with Washington lobbying firms. Some (5.1%) went to work for occupational associations, such as the American Dental Association or the International Association of Fire Chiefs; another nine went to work for institutions, mostly universities.

It’s important to emphasize that this analysis is limited to registered lobbying. If former House staffers joined advocacy organizations but did not register as lobbyists, they will not show up in these tabulations.

Figure 1. Where staffers who become lobbyists go to lobby

graphic by Ali Felski

If we look at the employment destinations by position in the House, we can see some different career paths. While 56.2% of chiefs of staff who became lobbyists joined Washington lobbying firms, only 30.8% of legislative directors and 23.1% of legislative assistants who registered as lobbyists did so for a lobbying firms

Legislative directors who go downtown are about equally likely to wind up in a lobbying firm, a corporation, or a business or trade association. Legislative assistants are most likely to wind up in a business or trade association.

Non-profit advocacy, meanwhile, did not attract a single chief of staff, but it did attract two of the 26 legislative directors going to lobby and five of the 52 legislative assistants.

Generally, work in a lobbying firm offers individuals the opportunity to make the most money, though it also generally requires the most work. Some individuals prefer the stability or predictability of a corporation or a trade association, where one does not have to shift between multiple clients and does not have to hustle for new business.

 

Figure 2. Where staffers who become lobbyists go to lobby, by position

graphic by Ali Felski

 

REPRESENTATION BY SECTOR

What types of interests do these former staffers represent? In order to answer this question, we added up the number of lobbying contracts that mentioned these staffers.  State and local governments top the list, with 295 contracts, followed closely by pharmaceutical companies at 263, education (mostly universities) at 261, computers/internet at 226, and electric utilities at 192.

Table 1. Sectors former House staffers represent

Certainly, there are different ways to cut these numbers. Telephone utilities, for example spent $253 million on contracts that included these lobbyists, as compared to state and local governments, which spent $38 million, although there were many more contracts involving state and local governments.

A LOOK AT WHO GOES TO BECOME A LOBBYIST

Among the staffers who left, about two-thirds (243) previously worked in member personal offices. Of these individuals, 60.5% (147) came from Democratic offices, as compared to 39.5% (96) from Republicans. Much of this disparity, however, has to do with the fact that the Democrats lost 63 seats in the 2010 mid-term elections, putting hundreds of Democratic staffers out of work.

Among the 147 Democratic staffers who left to become lobbyists, 63 (43%) worked for members who were defeated or retired in 2010.Of member staffers-turned-lobbyists, 32% (77) came from offices where members were defeated or retired; the remaining 68% (166) worked for members who are still in office.

Table 2. Partisanship and member status of staffers turned lobbyists

three members of Congress sent at least four staffer to the ranks of registered lobbyists since 2009: Michael A. Arcuri (D-NY, 5), Adam Putnam (R-FL, 4), and Laura Richardson (D-CA, 4). Arcuri and Putnam are no longer in Congress. Both Arcuri and Richardson were on the Transportation and Infrastructure Committee. Putnam was on the Financial Services Committee.  Table 3 shows the members at least three staff  who became lobbyists.Almost 40% (177) of the House offices in 2009 had at least one staffer become a lobbyist by 2011, and 11% (49) sent at least two individuals to become lobbyists. 

Table 3. Members with highest rates of staff going to lobby

COMMITTEES

Some committees are more likely to generate future lobbyists than others. Perhaps not surprisingly, the House committee with the highest percentage of former staffers going to lobby was the Financial Services Committee, where nine of 71 staffers (12.7%) went off to lobby. The Financial Services Committee handled the Dodd-Frank bill, which will continue to generate major lobbying activity for years as financial regulatory agencies work their way through the approximately 400 rulemaking the bill calls for. The Judiciary (9.0%) and Oversight and Government Reform (8.7%) had the next highest rates. Appropriations sent the most individuals to lobby (11, out of 145 staffers)

Table 4. Rate of staffers becoming lobbyists, by committee/leadership offices

POSITIONS

Certain positions were more likely to lead to future work as a lobbyist than others. The 377staffers employed in the House in 2009 who left to lobby included 50 legislative assistants, 32 chiefs of staff, 26 legislative directors, and 22 staff assistants.Of the 25 most common staff titles, the titles most likely to lead to staffers becoming lobbyists within the 2-year period were “Counsel” (11.2% became lobbyists), “Legislative Director” (8.9% became lobbyists), and “Legislative Counsel” (8.8% became lobbyists). Eight percent of both the chiefs of staff and the deputy chiefs of staff employed in mid-2009 became lobbyists. Interestingly, as we noted in our recent analysis of House operating budget cuts, salaries for “Counsel” positions had suffered the most between 2009 and 2011, down 5.8%. There is probably some connection.

Table 5. Rate of staffers becoming lobbyists, by selected positions

CONCLUSIONS

The revolving door continues to spin. Since July 2009, almost 400 individuals employed as House staffers at the time have left to become registered lobbyists, primarily working for lobbying firms, corporations, and business associations.In many respects, Congress continues to operate as a farm team for future lobbyists. Staff build up contacts and policy and political expertise. Then they often go “downtown” and cash in, taking their expertise and networks with them.

Though a certain flow of personnel from Congress to K Street is inevitable, Congress ought to do more to hold onto experienced staff. Recently, we explored retention rates among House staff, and we found that offices that paid their staff more had slightly higher retention rates, though Hill salaries lag behind private sector comparisons.When staff leave to lobby, their former offices must find somebody new and usually less experienced. And offices who lack staff with policy expertise and political relationships often must rely more on outside lobbyists, who are only too happy to fill the gap.For a complete list of all 378 staffers, what office they worked in, and where they went to lobby, click here.

METHODOLOGY AND DATA

These results are based on a comparison of House disbursement data from the third quarter of 2009 with public lobbying records. One challenge in conducting this analysis is that we are matching on names, and sometimes individuals register as lobbyists under different name permutations than they were listed on the Hill. We do our best to correct for this, but there are limitations. We also note that because certain names are more common than others, there is always the possibility of false positive matches.

Additionally, since our data on staff come from the Office of the Chief Administrative Officer of the U.S. House of Representatives, we are dependent on what the House reports. We must in good faith disclose that the underlying data are messy. At best, the data are approximate, and higher levels of confidence in it can only come when the House of Representatives makes a better effort with respect to how it normalizes and releases the data to the public. To dig through the data yourself, visit our House Expenditure Reports Database.

Special thanks to Daniel Schuman and Alison Rowland for their help on this analysis.

UPDATE: Jennifer Taylor, a legislative assistant in Rep. Pingree’s office, shares a name with Jennifer Taylor, a lobbyist at Van Scoyoc & Associates, resulting in a false positive. The text of this post has been corrected to reflect this. As noted above, our analysis is limited by the quality of the data published by the House disbursement reports and the Senate Office of Public Records. We regret the error and encourage anyone with clarifying information to contact us.

Politico: Super PACs: 2012’s campaign Godzillas

Wednesday, February 22nd, 2012

Republican super PACs are routinely raising or spending more money than the presidential candidates they are supporting, new filings show — a situation that just four years ago would have been equally bizarre and improbable.

Newt Gingrich’s campaign raised $5.6 million last month, according to new federal disclosures — a respectable amount until compared with the $11 million raised by the Winning Our Future super PAC that’s backing the former House speaker. Almost all of that $11 million came from two people.

Politico

The Restore Our Future super PAC supporting Mitt Romney likewise raised more money than Romney’s own campaign and finished January with more than twice the available cash: $16.3 million to $7.7 million.

And like Winning Our Future with Gingrich, the pro-Rick Santorum super PAC Red White and Blue Fund spent more in January than Santorum’s campaign did. The campaign committees of Santorum and Gingrich also have notable debt while their super PAC supporters report effectively none.

It’s enough to make Republican candidates a little green with super PAC envy, as recent federal court decisions have freed super PACs to raise and spend unlimited amounts of money in overt support or opposition to candidates as long as they don’t directly coordinate with campaign committees.

Wealthy individuals and some corporate entities have responded in some cases by pouring hundreds of thousands, even millions of dollars into the super PACs.

All the while, the candidates must continue to adhere to strict fundraising limits, prompting Romney to gripe in December that “we really ought to let campaigns raise the money they need and just get rid of these super PACs.”

But without the Restore Our Future super PAC, which is run by former Romney staffers, Romney would have missed out on more than $20.5 million worth of independent political expenditures that to date have almost exclusively skewered Gingrich, and lately, Santorum.

Compared with his Republican rivals, however, President Barack Obama is dogged by an entirely different super PAC concern.

The main super PAC supporting his reelection, Priorities USA Action, which is run by former Obama aides Bill Burton and Sean Sweeney — raised less than $59,000 in January.

Consider, now, that the GOP-supporting, Karl Rove-backed American Crossroads super PAC generated about $5 million last month — a crisp $100 for every $1.16 Priorities USA Action raised.

American Crossroads also boasts a cash reserve 20 times larger than that of Priorities USA Action.

Perhaps it’s no wonder, then, why Obama earlier this month personally blessed the work of the moribund super PAC, freeing campaign staff and Cabinet officials to aid it.

Obama’s decision also reflects a truth, for better or worse, about the nation’s new campaign finance rules: Even the free world’s leader couldn’t resist playing by them, no matter how politically unpalatable he finds them to be.

And Obama’s acceptance of Priorities USA Action will all but assuredly pay him cash dividends and buy parity with other super PACs, even if it cost him a self-styled perch on the campaign finance landscape’s high ground.

The Hill: Lobbyists decertify after Obama ban

Saturday, February 18th, 2012

More than 20 members of federal advisory committees canceled their registrations as lobbyists after the Obama administration banned K Street from the panels in 2009, according to a review by The Hill.

The Hill

The Hill compared the membership rosters of 16 Industry Trade Advisory Committees (ITACs) with lobbying disclosure records and found at least 22 of the panels’ more than 300 members canceled their lobbyist registrations after the White House policy was announced.

Overall, roughly 58 of those serving on the ITACs were registered to lobby at some point

Critics said the move by many to deregister shows the administration’s policy is flawed and encourages lobbyists to move into the shadows. 

Howard Marlowe, president of the American League of Lobbyists, called the number of formerly registered lobbyists serving on committees “shocking, [but] not surprising.”

“These are people who I presume are experts in their field who have something to contribute and want to contribute, and the only way they can do that is by deregistering,” said Marlowe, also president of lobby firm Marlowe & Co. “I presume that they haven’t all gone into the priesthood.”

The number of formerly registered lobbyists serving on federal advisory panels is likely much larger. The Hill’s review focused on only 16 panels, but there are approximately 1,000 advisory committees in the federal government, according to the General Services Administration.

Under the Lobbying Disclosure Act (LDA), any individual who spends 20 percent of his or her time lobbying for a client is required to register with the Senate. He or she also needs to make contact with at least two covered government officials to meet the registration threshold.

President Obama’s attempt to limit lobbyist influence in his administration has largely focused on people who are registered, although that standard only covers some of the people who work in the influence industry.

Lobbyists angered by the ban who once served on ITACs are suing the Obama administration and asking a court to declare the prohibition “unconstitutional.” 

A White House spokesman said Obama has worked hard to slow the revolving door between the government and private sector. He cited an executive order from the president that prohibited lobbyist gifts, clamped down on the hiring of lobbyists by the administration and prevented appointees from lobbying the White House after working there.

“Our goal has been to reduce the influence of special interests in Washington — which we’ve done more than any administration in history,” said White House spokesman Eric Schultz.

After the advisory committee ban was announced, Norm Eisen, then the White House ethics czar, said he would find it “disturbing” if lobbyists canceled their registrations to stay on the panels.

“I would hope that industry representatives would not seek to circumvent the rules in order to retain their preferred position on these bodies,” Eisen wrote in an Oct. 21, 2009, letter responding to ITAC leaders.  

Lobbyists who canceled their registrations and remained on ITACs gave different reasons for their decisions. Some said they changed how they went about their jobs to stay on the committees, while others said they were never lobbyists and had only registered out of caution. Many said their work on the advisory committees was too valuable for their companies to give up.

David Logsdon, executive director of TechAmerica’s Space Enterprise Council, said he altered his work to focus on public policy events and forums instead of meetings with congressional aides.

“The work on industry trade advisory committee at the Department of Commerce has allowed my clients’ positions on issues to be elevated to the key decisionmakers at the Department of Commerce that make the decisions on that industry of trade,” said Logsdon, who first registered in 2004.

Intel’s Greg Slater, who first registered to lobby in 2007, said the company moved general trade issues “that don’t require a lot of content expertise, such as expressing support for trade agreements,” to other internal and external lobbyists for the company so he could continue serving on a panel. Before that, he rarely spent 20 percent of his time lobbying, he added.

Barry Solarz, senior vice president of trade and economic policy at the American Iron and Steel Institute, was registered out of “an abundance of caution,” said Kevin Dempsey, the trade group’s senior vice president of policy and general counsel.

Having first registered in 1999, Solarz has served on an ITAC since 2003 — “an integral part of his job,” Dempsey said — so the trade group reviewed Solarz’s lobbying activities in the fall of 2009 and found that he had not “been engaged in any significant lobbying recently.”

The business association then restructured Solarz’s job to “ensure that he would not cross the line into lobbying going forward.”

“Having somebody [on the ITAC] who understands how steel products could be affected by proposed trade rules is very important for us to make sure that the new trade rules don’t negatively affect our industry,” Dempsey said.

Richard Holwill, vice president of public policy for Alticor, said he, too, registered to lobby out of caution. Since the ban has been announced, Holwill said, he keeps “a meticulous record” of whom he talks to and limits his contact with government officials to avoid hitting the registration threshold. 

“I lobby, but I lobby foreign government officials,” said Holwill, who serves on an ITAC. “These officials are not covered by the LDA, and the Obama administration does not object to this type of lobbying.”

Others said they were never lobbyists and had been registered in error. Though a member of an ITAC, Tom St. Maxens, president of St. Maxens & Co., was still registered to lobby last quarter for the Sporting Goods Manufacturers Association.

“That was my mistake,” said Bill Sells, vice president of government relations for the association. Sells said St. Maxens is a consultant on trade to the trade group and that he would amend lobbying filings going back to 2006 to correct the error.

“I put him down and went the extra mile. I over-disclosed,” Sells said. “He has never represented us before the federal government or a member of Congress. He advises me.”

Others said they registered under the LDA but never lobbied.

“I did register for some clients because I thought it was conceivable that I could reach the thresholds for them, but I never did,” said Sue Presti, president of Public Policy Resources and an ITAC member.

Presti, who had been registered to lobby sporadically since 2000, said she still has clients and is mindful of the ban.

“The nature of the work for my clients at the moment doesn’t require me to register,” Presti said. “I recognize in the future that things could change and I might have to.”

Politico: Super PACs echo parodies

Tuesday, February 14th, 2012

The law couldn’t be more clear: campaigns aren’t supposed to communicate strategy or coordinate spending with their super PAC supporters. And all the candidates claim they’re not doing anything wrong — Santorum insists super PACs don’t come up in his chats with Freiss, and representatives for Gingrich, Romney and Obama all say they’re not breaking the rules either.

It looks like they’ll get the last laugh, since there’s no sign of serious legal or technical challenges to the brazen behavior that might force campaigns or super PACs to reverse course before Election Day.

Politico

When it comes to super PACs, it’s getting hard to tell the difference between reality and a Comedy Central bit.

Stephen Colbert made an ongoing gag last month out of lampooning the rules barring coordination between outside groups and campaigns. When he announced a plan to run for president, he made a big show of handing off his super PAC to his fellow Comedy Central host Jon Stewart. Stewart promised not to coordinate with Colbert — giving the camera a wink and a nod.

But it was no joke last week when President Barack Obama and Mitt Romney cleared their top aides to raise cash for the super PACs supporting their campaign.

Meanwhile, casino mogul Sheldon Adelson, whose family has pumped $11 million into the super PAC boosting Newt Gingrich’s campaign, sat in on a meeting of the campaign’s national finance committee at one of his Las Vegas hotels this month. He also met privately with both Gingrich and Romney.

And Rick Santorum took the podium at the Conservative Political Action Conference last weekend after a warm introduction from his friend Foster Friess, a Wyoming multimillionaire who’s given hundreds of thousands of dollars to two super PACs credited with Santorum’s surge.

Friess has become part of Santorum’s campaign inner circle, traveling with the candidate on the trail and participating in sensitive conversations about campaign advertising. Santorum told reporters last week that Friess is “someone who I talk to, who gives me plenty of advice on how I say it and what I say.”

The law couldn’t be more clear: campaigns aren’t supposed to communicate strategy or coordinate spending with their super PAC supporters. And all the candidates claim they’re not doing anything wrong — Santorum insists super PACs don’t come up in his chats with Freiss, and representatives for Gingrich, Romney and Obama all say they’re not breaking the rules either.

It looks like they’ll get the last laugh, since there’s no sign of serious legal or technical challenges to the brazen behavior that might force campaigns or super PACs to reverse course before Election Day.

“It sounds to me as if the current – admittedly inadequate – rules are being bent or broken, especially when persons responsible for [super PAC ads] are also traveling with the candidates and/or advising them,” said Trevor Potter, a former Federal Election Commission chairman who was the top lawyer for John McCain’s Republican presidential campaigns, which discouraged outside spending groups.

It’s a bit of life imitating art for Potter, who has been participating in the ongoing Colbert-Stewart gag on their late-night shows. Colbert’s faux pundit character has talked about the “loopchasms” in the coordination restrictions and it’s not hard to imagine him devising a scenario like the Friess-Santorum talks.

While the coordination ban has been in effect for years, it’s gotten a lot more attention since a pair of 2010 federal court decisions created super PACs, allowing them to take unlimited funds from individuals, corporations and unions. The major limitation, as reinforced in the first decision, Citizens United vs. FEC, is that outside group ads “by definition” cannot be “coordinated with a candidate.”  The FEC in June issued an opinion making clear that election rules don’t prohibit candidates or their campaigns from helping super PACs fundraise within pre-existing limits.

And last summer, Romney appeared at multiple fundraisers for the super PAC supporting him, while Sens. Harry Reid and Chuck Schumer and House Speaker John Boehner and Democratic Leader Nancy Pelosi have availed themselves of the FEC decision to boost super PAC fundraising pushes.

Santorum’s campaign hasn’t discussed dispatching representatives to help its super PAC raise money, said a source familiar with the outside group. And, while Gingrich’s campaign is considering assisting the fundraising of a supportive super PAC, it has yet to do so, though the pro-Gingrich group, like the ones boosting Obama and Romney, is run by former close associates of the candidate.

The super PACs are like the “the evil twin of the candidate’s campaign committee,” FEC vice chairman Ellen Weintraub told POLITICO. “We really do not know whether this is at all what the courts had in mind when they opened the door to independent spending committees with no contribution limits.”

Obama had blasted such outside groups as a distortion of democracy and he particularly criticized non-profit groups that – unlike super PACs – do not disclose their donors. So Republicans hit him for hypocrisy last week when he bowed to political reality and cleared his top campaign and administration officials to help raise money for Priorities USA Action, the struggling super PAC set up to boost his campaign.

While it had received $215,000 from an affiliated non-disclosing non-profit group called Priorities USA, the groups quietly moved on Friday to segregate their finances in an effort to shield Obama from additional criticism. Because of “all the questions that were raised about it, we just wanted to eliminate any sense that there was a co-mingling that made people uncomfortable,” Bill Burton, the groups’ founder, told POLITICO.

The super PAC is still trying to figure out how it will work with Obama aides to raise money within the rules, Burton said. The super PAC’s January fundraising haul – which will be disclosed in a report due next week – will not show the benefits of the Obama blessing and will be “a pretty small number,” said Burton, who worked as a top aide to Obama on the 2008 campaign and in the White House.

It’s partly ties like Burton’s that have watchdogs and rival operatives accusing campaigns and super PACs of flouting the coordination ban. They point out, for instance, that the super PAC supporting Romney is being run in part by a fundraiser who came on board directly from the campaign and a lawyer whose wife continues to work for the campaign.

Likewise, opponents clucked their tongues when Texas Gov. Rick Perry’s since-aborted presidential campaign produced an ad using video footage shot by the super PAC and when POLITICO reported that billionaire industrialist Jon Huntsman, Sr., was both communicating daily with his son’s now-defunct presidential campaign and funding the super PAC supporting it.

Perhaps the most extreme cross-pollination between a campaign and a super PAC is the case of Friess, a 71-year old retired mutual fund manager. Through the end of last year, he had donated $381,000 to a pair of super PACs that buoyed Santorum with ads and robo-calls at a time when his campaign lacked the resources for such important expenditures.

The two men campaigned together nearly around-the-clock in the days before Santorum’s victory in January’s Iowa caucuses and his sweep of last week’s contests in Colorado, Minnesota and Missouri. During Santorum’s victory speeches in both instances, Friess stood beaming on stage behind the former Pennsylvania senator. Then on Friday, it was Friess at the podium at the Conservative Political Action Conference in Washington, introducing Santorum as “a dear friend” and “the next president of the United States.”

Behind the scenes, Friess has been even more important to Santorum’s effort.

Days after influential Iowa conservative leader Bob Vander Plaats gave his coveted endorsement to Santorum in the run-up to his state’s caucuses, his organization established Leaders For Families Super PAC, which quickly took in $125,000 – almost all of its cash – from Friess, and a pro-Santorum super PAC called the Red, White and Blue Fund, for which Friess is the biggest donor.

Leaders For Families used the cash to air radio and television ads and place automated telephone calls touting the endorsement from Vander Plaats, who had reportedly told Santorum he “needed money to promote the endorsement.”

The Vander Plaats endorsement and promotion thereof “was world changing,” Friess told POLITICO.

And though Friess said he’s asked Red, White and Blue Fund not to use his cash on negative ads, and suggested he’d like its ads to focus on Santorum’s work against Islamic extremism, he said he has nothing to do with the super PAC’s advertising strategy.

“I just send the money in and those guys take care of the ads,” he said. On the other hand, he has actively worked to boost the Red, White and Blue Fund’s fundraising, telling POLITICO he tried to convince Adelson to support Santorum and also planned to solicit donations from donors linked to the libertarian billionaire industrialist Koch brothers. Their most recent gathering of major donors, held late last month in Indian Wells, Calif. was attended by both Adelson and Friess.

“There isn’t a person at the Koch brothers events who would not get a good return on their investment by investing in [Santorum] as president, because of what they believe about the free enterprise system,” said Friess.

But, Friess said, he leaves all the super PAC business at the door when he’s with Santorum. “All my lawyer tells me is, to avoid any problems, don’t even mention the super PAC.”

Pressed last week on how he could travel with Friess, given his relationship to the super PAC, Santorum told reporters, “We know what the rules are, and the bottom line is, I don’t think it crosses a line whatsoever. He’s a friend, he’s been a friend for many, many years and has traveled with me in the past before it was a super PAC.” When the issue of Friess’s work on behalf of the super PAC came up again a couple days later, Santorum asserted, “I have no idea what Foster Friess is doing to my super PAC. That’s his business.”

Yet Friess has been privy to sensitive campaign business, including fundraising figures, and a private conversation this month between Santorum and Gingrich, who complained that his positions were distorted by a pair of Santorum campaign ads.

“Newt just came up and said that’s not true and it would be great if you could change that,” said Friess.

Adelson, meanwhile, this month huddled at his Venetian Hotel in Las Vegas with Gingrich, his campaign staff and other big donors for the finance committee meeting. He also held separate private meetings with Gingrich and Romney. Afterwards, Bloomberg News reported that Adelson intended to cut off the flow of cash to the pro-Gingrich super PAC, Winning Our Future.

Adelson has had no formal role in campaign strategy talks, and he and his wife Miriam Adelson stopped by the finance meeting only long enough to hear Gingrich speak before leaving, said a source close to the couple.

The source dismissed the Bloomberg report, explaining Adelson has not made it known whether he intends to continue contributing to Winning Our Future, and would not be influenced in his decision by pressure from other donors or candidates.

Winning Our Future has gone quiet after spending millions on tough ads criticizing Romney’s record at the private equity firm he helmed – an attack Gingrich at first embraced, then backed away from.

The coordination rules make “it much more difficult for the super PAC to do a positive ad for the candidate, since they cannot discuss with the candidate what issues they would like for advertising to address,” said Jim Bopp, a leading GOP campaign finance attorney. “It is easier to do a negative ad on the opponent since consistency of message is not as important there,” said Bopp, a Romney supporter who has advised the former Massachusetts governor on campaign finance policy.

Bopp’s proposal for merged candidate-super PAC fundraising led to the FEC opinion clearing such fundraising, and he suggested he might consider challenging the coordination rules “if I had a client” with a strong case.

“I think the FEC’s coordination rules are very strict, more strict than allowed by the First Amendment,” said Bopp. Rejecting the allegations that the coordination rules are easily circumvented, Bopp asserted campaigns and super PACs are paying close attention to the letter of the law because “the penalties for violation are very severe” and “an investigation is very onerous and burdensome.”

Fox News: Battle of the billionaires — Super PACs offer chance for high rollers to sway 2012 race

Sunday, February 12th, 2012

Fox News joins the mainstream media in recognizing the flow of campaign money from a select group of wealthy individuals.

Fox News

If the American presidential system were boiled down into a Las Vegas casino game, “Super PAC” betting would be placed exclusively in the high-stakes room. 

The Super PAC system, a product of recent Supreme Court rulings, allows unlimited donations for political causes. And recent federal disclosure forms reveal the people behind them are the whales of the campaign trail — putting up donations frequently in excess of a quarter-million dollars. 

For the first time, voters are getting a glimpse at who’s funding the previously opaque organizations boosting the presidential candidates’ campaigns with outside spending. 

Mitt Romney, not surprisingly, has a slew of investment titans — including former colleagues at Bain Capital — pumping money into the Super PAC supporting his campaign. Newt Gingrich enjoys high-powered support out of Vegas. Ron Paul is being indirectly funded by the co-founder of PayPal. Rick Santorum’s Super PAC is backed mostly by two people. And President Obama’s Super PAC is kept well-heeled by Hollywood and union support

The nature of the donations is a world apart from the traditional campaign finance of presidential campaigns themselves — for which individual donations are capped at $2,500. 

In the world of Super PACs, $2,500 makes for a modest starting point. Donors routinely put up $100,000 and up in support of the campaign committee of their choice. And a relatively small number of high-dollar contributors are involved. 

No Super PAC better exemplifies the unbound financial potential of the new system than Romney’s group Restore Our Future

According to end-of-year filings with Federal Election Commission, the pro-Romney committee has raised more than $30 million, from just 282 donors. The average donation tops $100,000, and the fund is backed by plenty of high-rollers. 

At the top are donors like Robert Mercer, an executive at hedge fund firm Renaissance Technologies; John Paulson, president of hedge fund Paulson and Co.; Julian Robertson, founder of hedge fund Tiger Management; Paul Singer, founder of Elliott Management Corp.; and Edward Conard, a former Bain colleague. All put up $1 million apiece. 

J.W. Marriott Jr., chairman of Marriott International, also contributed $500,000, as did Richard Marriott, chief of Marriott offshoot Host Hotels & Resorts. 

By law, these campaign committees cannot coordinate with the presidential campaigns themselves or directly fund them. This catch explains why, when Romney and other candidates are challenged on Super PAC-funded ads, they note that their campaigns had nothing to do with the production. 

But they are surely aware, and the Super PACs serve a blunt purpose. 

According to a study by the Center for Responsive Politics, Restore Our Future has spent $17 million in opposition to Gingrich – in large part through advertising. 

The other Super PACs don’t have nearly as much money, but nevertheless serve as a potent tool for the candidates. 

Winning Our Future, a pro-Gingrich group, has been backed by Texas businessman Harold Simmons. The group reported raising over $2 million at the end of the year, from just 18 people

More recently, and subsequent to the 2011 filing period, Las Vegas casino magnate Sheldon Adelson drew headlines for putting up $5 million for the Gingrich Super PAC. His wife reportedly followed suit with another $5 million. 

In Paul’s corner is the Endorse Liberty group, which reported about $1 million raised for 2011. The group is supported almost exclusively by Peter Thiel, a hedge fund manager who co-founded PayPal. 

Santorum’s Red White and Blue Fund has raised slightly less than Paul’s Super PAC. That, too, is backed by a handful of supporters, including wealthy investor Foster Friess and John Templeton Jr., son of philanthropist John Templeton. 

And the pro-Obama Priorities USA Super PAC has raised a total of $4.4 million as of the end of 2011. About half of that came in the form of a $2 million donation from DreamWorks Animation CEO Jeffrey Katzenberg. Steven Spielberg also threw in $100,000

Those five groups are just a slice of the national Super PAC pie, though they account for much of the money raised. According to the Center for Responsive Politics, 318 groups have raised nearly $99 million as of early February. They’ve spent nearly $47 million in the 2012 cycle. 

The campaign finance free-for-all has raised pressing questions all along about whether the new system is a boon for free speech — speech, that is, in the form of monetary donations and ads — or a barrier for candidates who might not have the behind-the-scenes support of such wealth

Gingrich, despite the support of his Las Vegas benefactors, has complained that the glut of negative advertising by Romney’s supporters has damaged his candidacy. 

In Congress, House Democratic Leader Nancy Pelosi and others are pushing for a new bill that would, among other provisions, require TV ads to name top donors. 

Yet Obama’s campaign this past week seemed to embrace the new Super PAC reality. The campaign said Obama officials would speak at Priorities USA events. 

Romney reportedly has sanctioned the same kind of interaction.

Kansas City Star: Five Democratic ‘super’ PACs may seek joint operation

Thursday, February 9th, 2012

Five Democratic “super” political action committees are reaching out to party mega-donors seeking $1 million to $10 million contributions, now that President Barack Obama has blessed the outside spending group working to get him re-elected.

Kansas City Star

Discussions among the five super PACs are under way about setting up a joint fundraising committee, said Bill Burton, a former deputy White House press secretary and co-founder of Priorities USA Action, which was launched last spring to help Obama win a second term.

“We’re in serious talks,” Burton told iWatch News of the Center for Public Integrity, but he added that a final decision hasn’t been made about establishing a joint fundraising mechanism. Either way, “there are a lot of people in the progressive donor community who have not yet gotten involved who are likely to be involved.”

Other top Democratic fundraisers say that a joint fundraising entity is likely and stress that the White House’s abrupt shift on super PACs – which came Monday in a conference call to leading donors and fundraisers with campaign manager Jim Messina – could help prod large donors to write seven-figure checks.

Democratic fundraisers are hoping that several major donors such as Hollywood mogul Jeffrey Katzenberg and Chicago media executive Fred Eychaner, both of whom already have written large checks to Priorities USA Action, will pony up considerably more to a joint committee.

Katzenberg has donated $2 million to Priorities USA Action, the super PAC that Burton and ex-White House aide Sean Sweeney created, and Eychaner, an old friend of Obama’s, has chipped in $500,000.

“There are donors who have expressed interest in a unified effort,” said Harold Ickes, president of Priorities USA Action, who is also a veteran Democratic fundraiser and a lobbyist with strong union ties. “A unified effort makes an enormous amount of sense and is likely to result in more money being raised.”

Democratic super PACs, which were created early last year and have struggled to catch up to better-funded Republican groups such as American Crossroads, are aimed at helping Obama win re-election, preserve the Democratic majority in the Senate and win back the House of Representatives.

Besides Priorities USA Action, the other Democratic groups involved in the joint committee talks include Majority PAC, which is focused on the Senate, and House Majority PAC, which is House-focused. The other two super PACs are American Bridge 21st Century, an opposition research entity that helps the other PACs, and America Votes, a get-out-the-vote operation for Democrats.

Last year, the five super PACs and two affiliated nonprofits raised a combined $19.6 million. In contrast, American Crossroads and its nonprofit affiliate, Crossroads GPS, pulled in $51 million.

Priorities USA Action and its nonprofit affiliate have said they want to raise $100 million. They pulled in $6.7 million in 2011. American Crossroads and its nonprofit arm, launched in early 2010 by GOP consultants Karl Rove and Ed Gillespie, are trying to raise $300 million, according to fundraisers close to the group.

The fundraising gold rush by super PACs on both sides has been spurred by court rulings in early 2010 that overturned decades of campaign finance law and opened the floodgates to corporations, individuals and unions writing unlimited checks to pay for ads by outside groups that directly support or oppose candidates.

The new joint effort, fundraisers stress, is expected to be contingent on pulling together a group of super donors who collectively would pony up between $40 million and $100 million. Fundraisers note that it’s important to potential big individual donors that if they write checks in the $5 million range, their contributions would be matched by several others.

The new drive comes after months of growing anxiety among Democrats about their weak super PAC fundraising compared to their GOP counterparts.

Democratic fundraisers say that potential donors have been confused by multiple requests for help from different super PACs working to boost Obama’s campaign as well as the two congressional campaign committees. Last fall, several of the super PACs tried to allay some of these concerns by holding joint meetings with donors, including one in Boston.

The weak super PAC fundraising last year is partly attributable to the much more robust efforts of the Obama campaign and the Democratic National Committee, which together pulled in more than $233 million. By comparison, leading GOP contender Mitt Romney’s campaign and the Republican National Committee pulled in only $144 million.

In recent weeks, Democratic fundraisers have grown especially concerned about the powerful impact of the negative ads that two GOP super PACs backing Romney and Newt Gingrich have run in key primaries. In Florida, the pro-Romney super PAC Restore Our Future, which last year raised $30 million, spent close to $10 million on mostly negative ads against Gingrich to help the former Massachusetts governor win a resounding victory.

In South Carolina, Gingrich’s super PAC Winning Our Future, which has received $11 million from casino magnate Sheldon Adelson and his family, ran about $3 million of blistering ads against Romney to help Gingrich score his only win.

Besides Katzenberg and Eychaner, other big donors whose names come up as potential candidates for $5 million or larger donations include Penny Pritzker, an heir to a hotel fortune, who was finance chief for Obama’s 2008 campaign; Haim Saban, a media mogul whose company created the Mighty Morphin Power Rangers; and banking executive Robert Wolf, who chairs UBS Group Americas.

Democratic fundraisers, however, are not counting on billionaire George Soros, who gave more than $20 million in 2004 to two outside groups spearheaded by Ickes. Soros contributed $100,000 to Majority PAC in December and $75,000 to House Majority PAC last May, according to Federal Election Commission records.

A top aide to Soros has said that the billionaire has not yet made up his mind about giving more for the presidential effort this year.

Notwithstanding their more bullish fundraising prospects, the new endorsement of Priorities USA Action by the president has sparked heavy criticism from different quarters, including campaign reform advocates and Republicans who have accused the president of betraying his principles and of hypocrisy. The president last year had called super PACs a “threat to democracy” and even Monday morning voiced worries about their negative impacts.

Jonathan Collegio, a spokesman for American Crossroads, in a statement called the new policy a “brazenly cynical move by Barack Obama and his political handlers who just a year ago had the chutzpah to call outside groups a threat to democracy.”

Fred Wertheimer of Democracy 21, which favors strict regulation of campaign donations, is writing to the Justice Department to ask for an investigation of the super PACs backing Obama and Mitt Romney.

“We believe that these super PACs are merely arms of the presidential campaigns being run by close associates of the candidates and not legally entitled to be independent groups,” Wertheimer told iWatch News.

Leaders of the two super PACs have said their operations are legal and independent of the campaigns.

Even some longtime Democratic fundraisers voiced concerns about the new push for unlimited funds.

Retired Philadelphia educator Peter Buttenwieser, who raised more than $500,000 for the first Obama campaign and still backs the president, said in an interview: “I understand that the president had virtually no other choice and so I’m supportive of it. But I’m not happy about the new direction. I think it puts us in a somewhat compromised position.”

Tennessean: Legislators move from lobbied to lobbyists

Monday, February 6th, 2012

When members of Congress hear from groups hoping to get a law passed or a regulation changed, they often look across the table at men and women they once worked with.

Tennessean

More than 300 former House members or senators, including presidential candidates Newt Gingrich and Rick Santorum, have worked as lobbyists or in very similar roles, according to the Center for Responsive Politics. Their ranks have included at least a dozen people who once represented Tennessee.

Critics say the phenomenon, while protected by the First Amendment guarantee of the right to petition the government, raises questions about how public policy is created in Washington, and what elected officials might be angling for while still in office. Critics worry about a “revolving door” between congressional offices — including staff members — and lobbying roles.

“It’s obviously the ultimate form of being wired,” said Viveca Novak, a spokeswoman for the nonpartisan, nonprofit Center for Responsive Politics, which tracks money in politics and its impact on elections and policy. “The clients who can pay the most are going to get the most extreme form of chumminess.”

Lobbying has been in the spotlight during the Republican presidential primaries. Gingrich, a former speaker of the House, has been accused by rival Mitt Romney of lobbying for Freddie Mac, a government-sponsored mortgage guarantor that has drawn criticism for its role in the nation’s housing crisis. Romney called the former congressman’s actions “influence-peddling.”

Gingrich, a former history professor whose consulting firm was paid $1.6 million by Freddie Mac for advice that their contract described as “in the areas of strategic planning and public policy,” has said he served his client as a “historian” and never registered as a lobbyist.

Sometimes the lines are more clearly drawn. The Tennessean was able to identify 22 living former members of Congress from Tennessee. Of those, at least 10 have worked as lobbyists, and two who left Congress last year — Democrats Bart Gordon and John Tanner — are now in a position to do so in their jobs at Washington law and lobbying firms.

When Tanner joined Prime Policy Group as vice chairman last February, the firm’s CEO, Scott Pastrick, said in a news release: “John Tanner brings a deep understanding of the legislative process, the policy and political nuances that shape corporate policy on Capitol Hill. He is a consensus builder who is respected across the political aisle in Congress and throughout foreign capitals.”

Similarly, the administrative partner of K&L Gates LLP’s Washington office, David T. Case, said of hiring Gordon as a partner last March: “Adding Chairman Gordon to an already accomplished public policy and law team — which also includes former Congressman Jim Walsh and former Senator Slade Gorton among its roster — will allow us to provide our clients with unparalleled policy and political advice and assistance.”

Tanner and Gordon did not return phone calls seeking comment last week.

Along with the 12 former members from Tennessee who have clearly lobbied Congress or started working for lobbying firms, The Center for Responsive Politics also lists former U.S. Rep. Harold Ford Jr. among the 370 former congressmen or senators nationally who have worked both sides of the “revolving door.” But the House and Senate have no records of Ford registering as a lobbyist, and Ford has said that wasn’t his role at investment bank Merrill Lynch, where he was a vice chairman and senior policy adviser before moving to Morgan Stanley last year.

No apologies

Former U.S. Rep. Lincoln Davis, who served four terms from Tennessee’s 4th Congressional District before losing a re-election bid in 2010, said he hasn’t done any lobbying. But he might at some point.

“I think that’s OK,” Davis said. “Obviously, there’s a lot of demand for people who have built relationships in Congress, not that they’re expected to be purchased or bought. Congress is a huge monster of an entity. I never realized how large it was until I was elected. I never realized how the machinery moves and works.”

Another former congressman, Bob Clement, represented Nashville and the rest of the 5th Congressional District from 1988 to 2003. After losing a campaign to become Nashville’s mayor in 2007, he formed Bob Clement and Associates, using his experience from 15 years on the House Transportation and Infrastructure Committee to work for clients in the rail industry.

Clement said he makes no apologies for his line of work.

“You make contacts,” he said while riding a train from Washington to New York on Friday. “And over the years I’ve stayed in touch with a lot of members, Democrat and Republican alike, not just in Tennessee but all over the country.

“I consider it an honorable profession. I’m fighting for a cause when it comes to transportation and rebuilding America.”

Politico: What super PAC filings left out

Saturday, February 4th, 2012

About the only thing more notable than the donor information super PACs this week revealed is the information they didn’t.

Super PACs filed reports with the Federal Election Commission that outlined what they raised — and from whom — in the last six months of 2011.

Politico

Absent from their heady reports are potentially similar hauls in January, when super PACs played critical roles in determining the outcomes of the four early presidential primary and caucus contests — particularly those in Iowa and South Carolina, when voters culled more than half the candidate field.

The pro-Newt Gingrich super PAC Winning Our Future, for example, on Tuesday reported $1.17 million cash on hand after raising a shade more than $2 million through Dec. 31.

But nowhere to be found is a $10 million donation that casino magnate Sheldon Adelson and his wife have made since — money that largely fueled a several million dollars in advertising highly critical of Republican presidential frontrunner Mitt Romney ahead of Gingrich’s decisive Jan. 21 victory in the South Carolina primary.

The Red White and Blue Fund, which supports Rick Santorum, only disclosed receiving $331,000 from businessman Foster Friess, although he reportedly made more, large contributions in January.

Super PACs supporting GOP candidates Rick Perry, Jon Huntsman, Michele Bachmann and Herman Cain, meanwhile, didn’t formally disclose a dime of the millions they together raised prior to their candidates ending their candidacies.

Voters in New Hampshire learned this week, three weeks after their presidential primary where Huntsman made his last stand, that Huntsman’s billionaire father had contributed $1.9 million to Our Destiny PAC, the super PAC backing him. The figure is likely higher, but won’t be known until late February when super PACs, which may raise and spend unlimited amounts of money to overtly advocate for or against political candidates, are required by law to release their January donation records.

And long after Perry headed back to the Lone Star state for good, the Make Us Great Again super PAC backing him disclosed that a handful of corporations, lobbyists and wealthy Texas businessmen accounted for most of the $5.5 million it raised through the year’s end.

For now, blame — or thank — a loophole in federal election law for an even greater super PAC disclosure delay than expected.

In December, super PACs supporting presidential candidates began systematically changing their campaign finance filing status from quarterly (and semi-annually during non-election years) to monthly, a chance that would seemingly hasten them revealing their monied backers.

Instead, the super PACs did it to avoid filing mandatory 12-day, pre-primary reports that quarterly filers must submit but monthly filers don’t.

The practical effect: super PACs received a Federal Election Commission-approved no-disclosure pass until the end of January, meaning voters had little idea who was funding the seemingly endless attack ads lambasting various candidates.

For those super PACs that existed before June 30, it was the first disclosure report they filed in seven months, and for those formed after, it was their first such report ever.

This slow-motion unveiling of contributors stands in stark contrast to laws mandating that political committees file reports, which detail independent expenditures made to support or oppose candidates, almost immediately after making them.

In other words, while the public will quickly know numerous details about a highly critical, $1 million television campaign against, say, Romney or Gingrich, the source of the money remains a mystery for weeks or months.

The situation is prompting a sharp debate at the Federal Election Commission and among campaign finance activists over whether today’s political committee disclosure laws, largely established in the 1970s, are simply obsolete.

“Nobody ever thought that PACs would end up spending more than candidates in a race,” said Ellen Weintraub (D), the FEC’s vice chairman. “Now they’re functioning pretty much as the alter-ego of candidate committees, so they probably ought to be on the same reporting schedule.”

But such a change would likely require a statutory change or lengthy rule making process, and that will take significant time that could probably be better spent, FEC Chairman Caroline Hunter (R) said.

“We can look at this, sure, although I think we have a pretty good system set up now,” Hunter said.

Former FEC Chairman Brad Smith agrees, arguing that the current disclosure set-up “allows you to know the kind of people that are supporting the PACs and the kind of money they’re spending,” which is the point of campaign disclosure in the first place.

While some tweaks in deadlines may be in order, “people blow this issue out of proportion,” said Smith, who now serves as chairman of the Center for Competitive Politics, which advocates for campaign finance deregulation.

Not so, says Bill Allison, editorial director of the nonpartisan Sunlight Foundation, which is calling for greater super PAC transparency.

“If super PACs can file their expenditures every 24 or 48 hours, why can’t they file more frequently on the income side? There isn’t a good reason,” Allison said.

Where these campaign finance officials and watchers generally agree: The system in place now for the 2012 election cycle almost assuredly won’t change before the election with neither the FEC nor Congress showing interest in rejiggering the system.

Los Angeles Times: ‘Super PACs’ largely funded by a wealthy few

Thursday, February 2nd, 2012

A few super-rich individuals are using their personal and corporate wealth to influence American politics in an unprecedented manner

LA Times

When it comes to big money in politics, Dallas billionaire Harold Simmons’ influence has long been apparent in Texas, where he has plowed more than $1 million into Rick Perry‘s gubernatorial campaigns.

Now Simmons has found a new outlet for his outsize political giving — the explosion this election cycle of “super PACs,” independent political organizations that can accept massive contributions to influence the presidential race and other federal elections.

Simmons and his privately held holding company, Contran Corp., dumped $8.6 million into a series of GOP-allied super PACs last year, according to campaign finance records released late Tuesday night. That propels Simmons into the top tier of a newly minted millionaires’ club — super-rich individuals who are using their personal and corporate wealth to influence American politics in an unprecedented manner.

Seventeen people or companies gave at least $1 million each to super PACs last year, according to an analysis by the Los Angeles Times data desk. The infusion ushered in an era of Texas-style unlimited donations at the national level. The organizations have emerged as heavyweights in this year’s presidential contest, at times outstripping the influence of the candidates’ own campaigns.

That’s the case with former House Speaker Newt Gingrich, whose presidential bid has been kept afloat by Winning Our Future, a super PAC that has received $11 million from Las Vegas Sands Chief Executive Sheldon Adelson and his family.

The Adelsons gave the funds with no strings attached and no specific expectations, because Gingrich “is an old friend in a time of need,” said one person close to the couple. It’s wealthy individuals like the Adelsons who are largely powering these new organizations — not major corporations, as many critics on the left had warned. But because companies are probably giving to tax-exempt organizations that do not have to reveal their donors, it is impossible to get a full picture of their influence.

Many members of the millionaires’ club have, like Adelson, long been generous political donors and fundraisers. Simmons, Houston home builder Bob Perry and Dallas real estate magnate Harlan Crow are among a group of wealthy Texans that helped finance the Swift Boat Veterans for Truth, an outside group that during the 2004 campaign attacked Democratic presidential nominee John F. Kerry’s war record. They and their companies are now backing American Crossroads, the biggest Republican super PAC, which aims to spend $240 million this cycle.

In 2010, Robert Mercer, manager of the New York hedge fund Renaissance Technologies, gave $640,000 to a super PAC that tried unsuccessfully to defeat Democratic Rep. Peter A. DeFazio of Oregon, a vocal Wall Street critic. Last year, Mercer was among 10 individuals or companies writing $1-million checks to Restore Our Future, a pro-Mitt Romney super PAC.

Seven-figure contributions were rarer on the Democratic side, whose super PACs have not yet matched the fundraising of their GOP counterparts. One of the few contributions that large came from DreamWorks Animation Chief Executive Jeffrey Katzenberg, who gave $2 million in May to Priorities USA Action, a super PAC supporting President Obama.

The left relies in this cycle — as it has in the past — on the muscular role of organized labor in funding ads and turning out its members. In this election, the unions are also filling the coffers of new super PACs. The Service Employees International Union, which represents 2 million workers, gave nearly $1.6 million to Democratic-leaning super PACs in 2011. All told, SEIU is expected to spend about $85 million on political activity, equal to the record amount the union dedicated to the 2008 presidential election.

Super PACs sprang up as a result of a series of court decisions in 2010, including the Supreme Court’s Citizens United ruling, which freed corporations and unions to spend unlimited amounts on political activity. That decision has been heatedly decried by campaign finance reform advocates and many Democrats, including Obama, who has warned it will lead to a flood of unregulated corporate cash in politics.

It is difficult to determine exactly how much corporate money is in the system, since many of the outside groups are organized as nonprofits, allowing them to keep their donors secret. While American Crossroads, co-founded by GOP political strategist Karl Rove, reported the donors that gave it $18.4 million last year, its nonprofit affiliate, Crossroads GPS, raised an additional $32.6 million from undisclosed contributors.

The latest campaign finance records reveal that dozens of private companies, hedge funds and business partnerships contributed to super PACs last year. But in an initial review of the filings, Chesapeake Energy, a natural gas producer based in Oklahoma City, appears to be the only publicly traded company that gave money, making a $250,000 donation to a super PAC backing Rick Perry’s since-suspended presidential bid.

Chesapeake did not immediately respond to a request for comment.

The paucity of well-known corporate names among the disclosures doesn’t mean that leading businesses won’t be involved in electoral politics this presidential cycle, according to top corporate lobbyists in Washington.

Major companies are expected to fuel record political activity at the U.S. Chamber of Commerce, which plans to spend at least $50 million on congressional races this year. The chamber, which does not disclose its donors, disputed the amount.

Although many of the nation’s leading CEOs are eager to participate in this year’s election, they largely plan to steer clear of super PACs because of the disclosure requirements.

“I think the Target experience makes them gun-shy,” said Scott Talbott, chief lobbyist for the Financial Services Roundtable, referring to a national boycott against the retail chain in 2010 after it donated to a political group backing a conservative Republican gubernatorial candidate in Minnesota who had made negative statements about gay and lesbian rights.

Simmons, a buyout investor who controls a stable of companies that produce metals and chemicals, has never been hesitant about using his fortune to promote his brand of conservative politics. He gave $3 million to the Swift Boat Veterans for Truth in 2004 and helped finance a nonprofit group in 2008 that spent $2.9 million on ads attacking Obama’s ties to William Ayers, a former member of the 1960s-era Weather Underground.

Simmons has poured $1.1 million into Perry’s campaigns, making him the second-largest individual donor to the Texas governor. Under Perry’s administration, one of Simmons’ companies, Waste Control Specialists, received permission to build the first new low-level radioactive waste disposal site in the country in three decades in an isolated patch of West Texas, despite objections from some state environmental agency staffers.

Simmons now has even more wealth at his disposal: In the last year, his net worth ballooned to roughly $9.6 billion, largely because the stock of Valhi, a chemicals conglomerate he controls, rose 170%, Forbes reported in December.

In the last year, he gave $1.1 million to two super PACs backing Perry’s presidential bid, along with $500,000 to Winning Our Future, the pro-Gingrich super PAC. In the fall, he donated $5 million to American Crossroads, while Contran gave $2 million.

“Mr. Simmons is a passionate conservative, and he has been for quite some time,” said his spokesman, Chuck McDonald, who described Simmons as “pro-business” and a supporter of tort reform.

But Simmons is not pursuing a specific policy agenda with his donations, McDonald said.

“I know people want to think he is,” he said. “He is a man who has a lot of personal wealth and believes in conservative ideology, and that’s where he puts his money.”