Politico: White House open to Democratic outside groups in 2012

Written by admin on November 10th, 2010

Politico reports that some Democrats are insisting that their party follow the Republicans example in setting up organizations that can use anonymous funding.

Politico

Some Democrats have complained openly that Obama’s 2008 admonition against outside groups spending money during his presidential run carried over to 2010, leaving Democrats on the sidelines without a well-tuned infrastructure of groups to help embattled candidates.

At the same time, Republican groups were springing up to pump cash into midterm races across the country — to the tune of nearly $200 million in expenditures.

Some frustrated Democrats have suggested they have no intention of being outgunned again in 2012, and Axelrod’s comments suggest that will be OK with the White House.

“I have no doubt after having watched $200 million rain down on Democratic candidates that there will be folks concerned about that and emboldened to get involved,” Axelrod said.

The inflation in presidential fundraising expected by both camps in 2012 is due in large measure to Obama’s decision to finance both his primary and general election with private donations rather than accepting public matching funds, as GOP hopeful John McCain did. Obama raised more than $650 million as of October 2008. When his convention and transition costs were included, Obama became the first candidate to raise roughly $1 billion for his presidential bid.

While Axelrod said the president will rely on a grass-roots-driven fundraising operation again for his reelection, the GOP outside groups in 2012 will be able to raise money faster since they don’t have to abide by similar caps on donations.

Already the founders of American Crossroads, the new Republican group co-founded by former Bush advisers Karl Rove and Ed Gillespie, are working to rebuild their campaign war chest and prepare for the presidential contest.

“This was a dry-run to 2012,” said one Republican insider familiar with Rove’s habit of testing new political tactics in off-year elections

 

Bloomberg: High-Frequency Traders Lobby, Donate to Head Off U.S. Rules

Written by admin on November 9th, 2010

Bloomberg reports on the lobbying activities of high frequency trading firms, who have quadrupled their spending this year.

Bloomberg

The SEC and members of Congress already were examining the business when the May 6 market plunge temporarily wiped out $862 billion of share value in 20 minutes. Although an investigation by regulators didn’t put direct blame on high-frequency firms, the volatility of stock prices focused more attention in Washington on their operations.

“Those with powerful computers are able to use them to their own financial advantage,” Senator Carl Levin, a Michigan Democrat, said Sept. 28 on the Senate floor. “Those who exploit our markets to the detriment of long-term investors and the real economy will not be able to do so without a battle from the Senate.”

In addition to writing proposed rules, the SEC’s enforcement division is investigating whether computer-driven traders have manipulated prices. “You have to be concerned every time there’s a lack of transparency into a market practice, particularly one like high-frequency trading that is so prevalent,” Robert Khuzami, the SEC’s enforcement chief, said in an interview.

The scrutiny has spurred the industry to seek friends in Washington. Managers and employees of 21 of the largest computerized-trading firms, including Getco, Allston Trading LLC and Infinium Capital Management LLC gave about $490,000 for this year’s congressional elections, compared with just over $100,000 in 2006, according to federal election reports filed through Oct. 15.

In 2000, when some of the firms didn’t yet exist, contributions totaled about $10,000.

Another advocate for electronic trading has been Representative Jeb Hensarling, a Texas Republican who sits on the House Financial Services Committee.

Hensarling and Representative Spencer Bachus, the Alabama Republican in line to become chairman of the financial services panel, advised Schapiro in an Aug. 24 letter to get a better understanding of what caused the crash before “assigning blame to algorithmic or high-frequency trading firms.”

Hensarling received $4,800 last month from Suhas Daftuar and Alexander Morcos, two managing directors of Hudson River Trading LLC, a New York high-frequency trading firm. Hudson River Trading didn’t respond to a request for comment.

In an interview, Hensarling said he’s concerned the SEC is acting “precipitously” in singling out high-frequency trading. “I’m not necessarily saying they are wrong, but the accountability function of Congress is to ensure there is justification for what you’re doing,” he said.

Donations to Democrats

Other politicians who were the biggest recipients of donations from high-frequency traders include Mark Kirk, a Republican who won a U.S. Senate seat in Illinois, Senator Charles Schumer, a New York Democrat, Representative Melissa Bean, an Illinois Democrat, and Robin Carnahan, a Democrat who lost her race for a U.S. Senate seat from Missouri.

 

Daily Fundraising requirements for Congress

Written by admin on November 8th, 2010

Courtesy of Maplight, here are the actual average amounts of money that a legislator has to raise in order to win a seat in Congress.

MapLight

PRICE OF ADMISSION FOR HOUSE AND SENATE SEAT

HOUSE

• Election Cycle Average: $1,472,146

• Annual Average: $736,073

• Daily Average: $2,016 (2 years)

HOUSE MEMBERS HAVE TO RAISE $2K EVERY DAY FOR 2 YEARS TO WIN A HOUSE SEAT

SENATE

• Election Cycle Average: $7,297,936

• Annual Average: $1,216,323

• Daily Average: $3,332 (6 years)

SENATE MEMBERS HAVE TO RAISE $3.3K FOR 6  YEARS TO WIN A SENATE SEAT

 

Psychology Today: Dollar Democracy: Did Corporate America Buy the Midterm Elections?

Written by admin on November 7th, 2010

A very nice mention for the documentary in Psychology Today’s Side Effects column.

Links to MSNBC interview with Dylan Ratigan embedded in the article as well.

Psychology Today

Of the $700 million that U.S. House members raised in three years, MSNBC’s Dylan Ratigan reports, “79% came from outside their district.” He was relaying the findings of a critical new documentary by Francis Megahy called The Best Government Money Can Buy. As Megahy aptly noted on Ratigan’s show, “When you’ve cast your vote at an election, you don’t necessarily get what you want. You get what your candidate’s biggest campaign contributors want.”

That would seem especially meaningful when the midterms were “the most expensive midterm elections ever.” They also included the highest proportion of negative ads in a U.S. election—so far.

The ousting of Russ Feingold (D-Wisconsin), three-term senator and strong proponent of campaign-finance reform, therefore needs to be seen against the backdrop of his opponent, millionaire plastics CEO Ron Johnson, outspending him four-to-one, including by “chipp[ing] in $8.2 million of his own fortune for his campaign.” Common Cause of Wisconsin estimates that “outside groups spent about $5 million, most of that on ads opposing Feingold.”

 

Maplight: Regardless of Party, Big Fundraisers are Big Winners in Senate Races

Written by admin on November 7th, 2010

Our friends at Maplight put the numbers out on the Senate races.

Maplight

Of the 35 Senate candidates who won election on Tuesday, 29 of them out-raised their opponents, some by wide margins (two races, Alaska and Washington have not been decided). For comparison, in what was widely considered a big victory, Republicans won 23 out of the 35 races. As successful as the G.O.P. was, well-funded candidates as a group beat them by 6 seats.

The Narrowest Victories

Of the five closest races with a declared outcome*, the winner held a financial advantage in all but one of them. In Colorado, Democrat Michael Bennett ( $11,463,411), who barely squeaked out a victory raised three times more than his Republican opponent, Ken Buck ($3,827,432). Republican Mark Kirk ($12,759,089) won President Obama’s former Senate seat in Illinois by a narrow margin with the help of $4.4 million more than his opponent, Democrat Alexi Giannoulias ($8,404,220). The result in Pennsylvania was similar, where Republican Pat Toomey ($14,832,115) won a close contest over Democrat Joseph Sestak ($9,271,042), spending $5.5 million dollars more than him in the process.

 

New York Times: Political Funds Remain an Asset for Many Ex-Lawmakers

Written by admin on November 6th, 2010

The New York Times reports on how politicians from both parties are exploiting a loophole in the law to use campaign contributions for personal expenses.

New York Times

Henry Bonilla, a Texas Republican and former member of Congress, has tapped into his political piggy bank to fly around the United States, eat at some of San Antonio’s finest restaurants and to cover bills at luxury hotels like The Breakers in Palm Beach, Fla.

Former Representative Charles H. Taylor has used his leftover political account to host an annual Christmas party at a resort near his North Carolina home.

And friends of John P. Murtha, the once-powerful House military appropriator who died this year, spent much of the balance in his political account earlier this year to hold a goodbye tribute dinner at the Army Navy Country Club in his honor.

This spending on meals and luxury hotel stays reflects a little-known loophole in campaign finance laws, one that will likely draw scrutiny as a remarkable wave of lawmakers leave in retirement or in defeat: Former members are largely free to spend the money left over in their political action committees however they choose.

At least 66 retiring, recently departed or defeated lawmakers are affiliated with such accounts, according to Federal Election Commission records. They had a combined total balance of approximately $2.8 million in cash on hand as of last month. These accounts are informally known as leadership PACs. As distinguished from the accounts politicians use to mount their own campaigns, these are intended as a way for politicians to win friends by donating money to other candidates and political parties.

Among current lawmakers leaving office in January, retiring Representative Bill Delahunt, Democrat of Massachusetts, has the largest in cash reserves, as he had squirreled away nearly $1 million in his leadership PAC as of the end of September.

Traditional campaign funds — those members use for their own bids — are subject to restrictions. But there are no explicit limits on the leadership PACs, which are filled most typically by donations from lobbyists, corporate executives and unions. The Federal Election Commission — long criticized for its reluctance to rein in abuses — has itself called this a “growing problem” and pushed to tighten the rules.

Donors give to leadership PACs because they support the political agenda of the lawmaker running it, not under any expectation that this will turn into a personal bank account,” said Marty Meehan, a former House member who supports a restriction that would ban the personal use of leadership PAC funds.

The potential for abuse has grown markedly over the last decade or so as leadership PACs — which were first created by just a handful of lawmakers seeking leadership posts or higher office — have become a common accoutrement in Washington. As of this fall, there were nearly 400 active leadership PACs

 

Bloomberg: Rove-Backed Groups, U.S. Chamber Build Winning Record in Midterm Election

Written by admin on November 5th, 2010

Bloomberg gives the scorecard for the record campaign spending.

Bloomberg

Rove’s American Crossroads and Crossroads GPS backed the victor in 23 of the 36 House and Senate races where a winner was declared. American Action Network, which shared space with the Crossroads groups, won 14 races and lost 10. The nation’s biggest business lobby, the U.S. Chamber of Commerce, supported the winning candidate in 38 of 59 contests in a year dominated by voter concerns about the economy and joblessness. The groups also spent money in races that have yet to be decided.

“The record amount of secret money spent by right-wing outside groups turned this political storm into a Category 3 political hurricane,” said Representative Chris Van Hollen of Maryland, chairman of the Democratic Congressional Campaign Committee.

The election was the first since the U.S. Supreme Court reversed decades of precedent and said corporations could spend unlimited sums on federal races. Companies and wealthy individuals funneled millions into outside groups, many of which didn’t disclose their donors.

Republican-leaning groups spent $167 million between Sept. 1 and Oct. 31 in support of their party’s nominees, compared with $68 million by Democratic-leaning organizations, Federal Election Commission reports show.

‘Caught Up’

“We finally caught up with the Democrats,” said former Representative James Walsh, a New York Republican who works for the law and lobbying firm K&L Gates LLP. “They’ve been doing this for years.”

“When you had a mid-cycle race where the message was absolutely key, the outside groups played a huge role in defining that message,” said Meredith McGehee, policy director at the Campaign Legal Center, a Washington group that favors limits on campaign giving.

The outside groups spent $18 million in September and October on the Colorado Senate race between incumbent Democrat Michael Bennet and Republican challenger Ken Buck. That’s more than the $14 million both candidates spent through Oct. 13. Bennet, who claimed victory yesterday, spent almost $8 million more than Buck; Republican groups spent $4 million more than Democratic organizations.

American Crossroads discloses its donors and Crossroads GPS doesn’t. The two groups, advised by Rove, who was President George W. Bush’s chief political strategist, spent $38 million, more than any other organization — and all of it went to help elect Republican candidates. Crossroads officials regularly met with representatives of allied groups, such as American Action Network, to plan strategy.

Team Effort

“This was a great team effort between the conservative independent groups, the party committees and candidates to overcome the dramatic advantages Democrats held with entrenched power,” said Jonathan Collegio, a Crossroads spokesman.

The Chamber of Commerce spent almost $30 million, including $2 million in support of Democratic incumbents. The chamber, which doesn’t disclose its donors, fought efforts in Congress to require outside groups funding political ads to identify the sources of their money; Senate Republicans blocked the legislation in September.

 

The Hill: After Dem wipeout, K St. looks for deals

Written by admin on November 5th, 2010

The Hills reports on the job rush on K Street.

The Hill

Rich Gold, a Democrat who heads Holland & Knight’s public policy group, said businesses will want lobby firms that can work with both parties, given the tumultuous elections of 2008 and 2010.

“How quickly the bodies swing back and forth means clients want to mitigate that and have some bipartisan coverage,” Gold said.

Republican lobbyists are in high demand after the party’s huge gains in the House.

As polls began to close Tuesday, Ivan Adler, a principal at the McCormick Group who head-hunts for lobbying jobs, started hearing from Republican aides on Capitol Hill as well as former GOP House members who are interested in joining the lobbying community.

Just like when the Democrats were in control, those people who know the leadership are extremely valuable. They become the instant gold,” Adler said. “And the people who understand the political process are silver.”

 

Washington Post: Defeated House Democrats outspent GOP in campaigns

Written by admin on November 4th, 2010

The Washington Post reports that House Democrats actually outspent House Republicans in the elections when all sources are considered.

Washington Post

In two-thirds of the House seats that Republicans picked up Tuesday, Democratic candidates had more money behind them than Republicans, according to a Washington Post analysis of data from the Federal Election Commission.

Overall, Democratic candidates in the 63 races that flipped to the GOP had $206.4 million behind them, a tally that includes candidate fundraising and spending by parties and interests. That compares to only $171.7 million for their GOP rivals.

The pattern appears to contradict widespread complaints from Democrats that they were being unfairly overrun by wealthy Republicans, many of whom donated money to conservative groups to spend on political races – unencumbered by the limits and public-disclosure requirements that constrain most political fundraising. The data show that even in many races in which Republicans had more outside help, they still had fewer resources than their Democratic opponents.

In the Senate, Republicans had much more money than Democrats for the seats they captured in Pennsylvania and Illinois left open by retiring lawmakers. In Pennsylvania, Rep. Joe Sestak (D) raised $7 million, about half as much as former representative Pat Toomey (R). Toomey also benefited from $9.3 million in outside spending, compared to only $2.8 million on behalf of Sestak.

In Wisconsin, Sen. Russell Feingold (D) was outraised by businessman Ron Johnson (R), who invested $8.2 million of his own money in the race. Feingold lost, pulling in 47 percent of the vote to Johnson’s 52 percent.

The most expensive congressional race was for the Senate seat in Connecticut, where businesswoman Linda McMahon (R) invested $46.6 million in her campaign. She lost to Attorney General Richard Blumenthal (D) on Tuesday night after receiving 44 percent of the vote.

The Post analysis looked at fundraising by general election candidates through October 13 and independent spending reported by the parties and interest groups through Election Day. It did not include money raised by candidates in the final weeks before the election, or transfers from the parties to states for turnout operations. A full accounting won’t be possible for another month, when new disclosure filings are due.

Not all of the losing Democrats outgunned their GOP challengers, of course. In New Hampshire, Democrat Carol Shea-Porter fell to GOP candidate Frank Guinta, who had $1.7 million more than the incumbent, along with help from his allies, including more than $800,000 in spending by outside conservative groups.

In the race to replace Democratic Rep. Charlie Melancon in Louisiana, Republican Jeff Landry and his supporters had $2.7 million more than his Democratic opponent. Other defeated Democrats who faced war-chest deficits of $1 million or more included Reps. Stephanie Herseth SandlinGlenn Nye (Va.)

 

Los Angeles Times: Some Democrats favor a shift to more outside campaign spending

Written by admin on November 4th, 2010

The Los Angeles Times reports on the scramble among some Democrats to use the Republican model of outside campaign spending despite President Obama’s aversion to it.

Los Angeles Times

Dozens of wealthy Democrats are expected to debate a change in their approach this month in Washington during a meeting of Democracy Alliance, an organization of more than 100 liberal donors set up five years ago to help the left build a long-term campaign and policy infrastructure.

“We should certainly learn from what the right wing has done,” says Steve Phillips, who leads a California-based political advocacy group, PowerPAC.org, and plans to attend the gathering. “We’ve been a little overly purist in our approach in a way that we’re maybe paying a political price for.”

The growing consensus among many party strategists that there is a need to create an expanded independent expenditure effort for 2012 represents a rejection of Obama’s long-standing opposition to large-dollar outside spending.

During the 2008 campaign, Obama condemned such independent campaigns, even though he benefited from many of them.

Robust fundraising by Democratic campaigns and party committees helped Democrats collect nearly as much as Republicans did overall. But when it came to the more than $300 million spent by outside groups, Republicans benefited by a margin of more than 2 to 1, according to the Center for Responsive Politics.

There is still debate within the party about whether Democrats should set up “soft money” organizations similar to the ones cofounded by Rove, American Crossroads and Crossroads GPS.

Michael Vachon, an advisor to billionaire George Soros, said it was a mistake — practically and philosophically — for the Democrats to give up the high ground on campaign finance reform to compete with Republicans and their allies.

“Their resources will  always be too great because the funds come from those who are acting in their own economic self-interest. The way to respond is to change the way campaigns are funded and to require public disclosure of funders,” Vachon said.