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Wall Street Journal: The Super PAC Lesson

Monday, November 12th, 2012

Thoughts on campaign spending from the Wall Street Journal.  There was not enough of it for their tastes.

Apparently Mitt was “defenseless” against Obama’s ads.

Wall Street Journal

In every election there are issues that take up an inordinate amount of media attention but turn out to be sideshows. This year’s champion is Super PAC spending. Liberals first claimed that the Koch brothers and other wealthy donors were “buying” the election, but now that Democrats have won they are claiming that these GOP donors were gullible fools for giving at all. They’re wrong on both counts.

Money did matter, as it always does to some extent. But the cash that really counted was the more than $100 million that the Obama campaign used from May through July in the battleground states to portray Mitt Romney as Gordon Gekko without the social conscience. The Election Day exit polls show that Mr. Romney’s image never recovered from that ad barrage. He ran largely a biographical campaign and the Obama campaign destroyed his business biography. His net favorability was negative.

Mr. Romney’s advisers told us in early August that they would have liked to respond to the attacks but lacked the cash to do that and at the same time to portray a positive message after they had run through all of their money during the primary. They went with the positive message, albeit one that didn’t make much of an impact.

By the way, this is also the early-advertising strategy that Bill Clinton and adviser Dick Morris used to destroy Bob Dole in 1996. You’d think Republican strategists would have remembered that.

The GOP Super PACs tried to fill the gap by attacking Mr. Obama, but they were hard pressed to speak for a candidate whom by law they are prohibited from coordinating with. Perhaps their ads could have been more effective, and perhaps some of that money would have been better spent on matching Democratic voter turnout operations. Those questions deserve to be part of a GOP self-examination. But it’s hard to believe that Mr. Romney would have done any better if the Super PACs hadn’t existed.

All of which suggests that the real problem this year wasn’t too much campaign spending but too little. The GOP lacked the cash to counter the attack ads when its candidate really needed it. Mr. Romney raised enough money after the conventions, but by then it was too late to expand the field of competition other than with a late sneak attack of the kind the campaign tried in Pennsylvania.

In focusing so much on rich GOP donors, the media also underplayed the way the Supreme Court’s 2010 Citizens United decision helped Democrats. That ruling overturned longstanding rules that prohibited unions from using dues money to communicate politically with non-union members. This allowed unions to run more efficient voter-targeting operations, since they didn’t have to skip non-union households, and it contributed to voter turnout in places like Nevada, Wisconsin and Ohio.

The unions were also helped by the many White House and campaign officials whom Mr. Obama dispatched to fund-raise for Democratic Super PACs—when he wasn’t busy criticizing GOP spending.

The history of campaign-finance limits is that attention to the issue recedes when Democrats win. But expect it to return in time for the 2014 campaign cycle, when the media will find some new Sheldon Adelson to portray as a threat to democracy even as unions go on spending their cash below the radar.

A far better reform would remove all donation limits to candidates, so nominees like Mr. Romney of either party aren’t left defenseless again. The Super PACs would fade in importance and the candidates would get to better control their own message. The U.S. is a huge country and it takes lots of money to educate voters.

ZeroHedge: Meet The Billionaires Behind The Best Presidents Money Can Buy

Sunday, October 21st, 2012

The last time we checked on the (funding) status of America’s real presidential race – the one where America’s uber-wealthy try to outspend each other in hopes of purchasing the best president money can buy – the totals were substantially lower. With November 6 rapidly approaching, however, the scramble to lock in those record political lobbying IRRs is in its final lap.

And thanks to the unlimited nature of PAC spending, look for the spending to really go into overdrive in the next 2 weeks as the spending frenzy on the world’s greatest tragicomedy hits previously unseen heights.

ZeroHedge

RESTORE OUR FUTURE

Total raised as of Sept. 30: $110.5 million – supports Republican presidential candidate Mitt Romney

  • Bob Perry – Houston builder who was a major donor to Swift Boat Veterans for Truth, a group that helped undermine 2004 Democratic presidential nominee John Kerry by attacking his Vietnam War record. Total donations: $10 million
  • Sheldon Adelson – billionaire Las Vegas casino magnate who built the Venetian hotel and casino. Donation: $5 million
  • Miriam Adelson – Sheldon’s wife. Donation: $5 million
  • Bill Koch – brother of conservative financiers David and Charles Koch. He runs Oxbow Carbon, a Florida-based firm that is also a donor and shares its address with another contributor, Huron Carbon. Total donations, including through firms: $4 million
  • Steven Lund – runs Nu Skin, a Utah skin care and cosmetics company whose former executives have been linked to two other firms that share an address in Provo, Utah, and donated to the Super PAC: F8 LLC and Eli Publishing. Lund’s wife Kalleen is also a donor. Total donations from the Lunds and firms: $3 million
  • Julian Robertson – hedge fund industry legend at Tiger Management. Total donations: $1.3 million
  • Crow Holdings – Dallas-based investment firm managing the wealth of the family of the late Dallas real estate mogul Trammell Crow, whose sons Harlan and Trammell S. Crow are also donors. Total Crow Holdings and Crow donations: $1.3 million
  • Harold Simmons – billionaire Dallas banker and CEO of Contran Corp who has contributed to PACs supporting Rick Perry and Newt Gingrich. Donations: $1.3 million
  • Frank VanderSloot – Idaho businessman who runs the nutritional and cosmetics company Melaleuca. The firm and its subsidiaries have also donated. Total donations: $1.1 million
  • The Villages of Lake Sumter – a community in Florida run by billionaire Gary Morse, who is also a donor alongside his wife Renee and their several children. Along with the Morse family, thirteen companies controlled wholly or partially by Morse that share an address in The Villages have also contributed. Total donations of all: $1.7 million.
  • Kenneth Griffin – Chicago-based hedge fund manager and CEO of Citadel LLC. Total donations: $1.1 million
  • Bob Parsons – billionaire founder of web hosting giant Go Daddy. Donation: $1 million
  • Jim Davis – chairman of New Balance Athletic Shoes Inc. Donations: $1 million
  • Stanley Herzog – CEO of Missouri-based Herzon Contracting Corp. Donation: $1 million
  • Bruce Kovner – billonaire hedge fund manager at Caxton Alternative Management. Donation: $1 million
  • Rocco Ortenzio – Pennsylvania healthcare executive and founder of Select Medical Corp. Total donations: $1 million
  • John Childs – founder of private equity firm J.W. Childs Associates LP in Florida. Donation: $1 million
  • Edward Conard – a New York investor and former executive at Bain Capital, a private equity firm co-founded by Romney. Donation: $1 million
  • John Kleinheinz – Texas hedge fund manager for Kleinheinz Capital Partners Inc. Donation: $1 million
  • J.W. Marriott Jr. – chairman and CEO of Marriott International, brother of Richard. Total donations: $1 million
  • Richard Marriott – chairman of Host Marriott International. Total donations: $1 million
  • Robert McNair – owner of the Houston Texans football team. Donation: $1 million.
  • Robert Mercer – New York hedge fund manager at Renaissance Technologies. Donation: $1 million
  • John Paulson – a prominent New York hedge fund manager at Paulson and Co. Donation: $1 million
  • Rooney Holdings Inc – private investment firm formed in 1980s to acquire the Manhattan Construction Co. and has since expanded into many areas. Total donations: $1 million
  • Paul Singer – hedge fund manager who helped fund efforts to legalize gay marriage in New York. Donation: $1 million
  • Paul and Sandra Edgerly – Paul Edgerly of Brookline, Massachusetts, is an executive at Bain. The Edgerlys each have given $500,000. Total donations: $1 million
  • Steven Webster – private equity executive at Avista Capital in Houston. Total donations: $1 million
  • Robert Brockman – executive at Reynolds and Reynolds, a Dayton, Ohio-based car dealership support company that shares a P.O. Box with CRC Information Systems Inc, Fairbanks Properties LLC and Waterbury Properties LLC, which split the donation three ways. Total donations: $1 million
  • Miguel Fernandez – chairman of MBF Healthcare Partners, a private equity firm. MBF Family Investments also donated to the Super PAC. Total donations: $1 million
  • Renco Group Inc. – owned by New York billionaire Ira Rennert, another frequent contributor to Republicans this year. Donation: $1 million
  • OdysseyRe Holdings Corp – reinsurance underwriting company in Stamford, Connecticut that is a U.S. subsidiary of Toronto-based Fairfax Financial. Donation: $1 million

 

PRIORITIES USA ACTION

Total raised as of Sept. 30: $50.1 million – supports Democratic President Barack Obama

  • James Simons – billionaire hedge fund manager, founder of Renaissance Technologies Corp. Donation: $3.5 million
  • Fred Eychaner – founder of Newsweb Corp. Donation: $3.5 million
  • Jeff Katzenberg – chief executive of DreamWorks Animation. Donation: $3 million
  • Steve Mostyn – Houston attorney. Donation: $2 million
  • Irwin Mark Jacobs – former CEO of Qualcomm Inc. Donation: $2 million
  • Jon Stryker – billionaire activist and heir to the medical supply company fortune of his grandfather. Donation: $2 million
  • Anne Cox Chambers – billionaire daughter of James M. Cox, founder of Cox Enterprises. Total donations: $1.5 million
  • National Air Traffic Controllers Association – union representing more than 16,000 workers. Donation: $1.3 million
  • S. Daniel Abraham – billionaire creator of Slim-Fast brand, chairman of S. Daniel Abraham Center for Middle East Peace. Donation: $1.2 million
  • Barbara Stiefel – retiree in Coral Gables, Florida. Donation: $1.1 million
  • United Auto Workers – Donations through various funds: $1.1 million
  • Kareem Ahmed – chief executive at Landmark Medical Management in California. Donation: $1 million
  • David Boies, Jr – New York lawyer. Donation: $1 million
  • Morgan Freeman – Hollywood actor. Donation: $1 million
  • Amy Goldman – writer and heiress to the New York real estate fortune of Sol Goldman. Donation: $1 million
  • Franklin Haney – owner and CEO of FLH Company, a Washington-based real estate company. Donation: $1 million
  • Bill Maher – stand-up comedian. Donation: $1 million
  • Mel Heifetz – real estate developer and gay activist. Donation: $1 million
  • Michael Snow – Minnesota lawyer. Donation: $1 million.
  • Steven Spielberg – film director. Donation: $1 million.
  • Ann Wyckoff – Seattle philanthropist. $1 million.
  • Service Employees International Union Committee on Political Education – union representing more than 2 million workers. Donation: $1 million.
  • United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry – union representing some 340,000 workers. Total donations: $1 million

AMERICAN CROSSROADS

Total raised as of Sept. 30: $68 million – supports Republican candidates for federal offices

  • Harold Simmons – Total donations together with Contran Corp: $15.5 million
  • Bob Perry – Total donations: $6.5 million
  • Robert Rowling – an Irving, Texas, businessman and a conservative and active Republican donor. His company, TRT Holdings Inc, which runs Omni Hotel and Gold’s Gym chains, is also a donor. Total donations: $4 million
  • Joe Craft – billionaire coal executive from Tulsa, Oklahoma, and CEO of Alliance Holdings, which is also a donor. Total donations: $2.1 million
  • Jerry Perenchio Living Trust – a trust of billionaire television tycoon A. Jerrold Perenchio, who is a former chairman of Spanish-language broadcaster Univision. Donation: $2 million
  • Crow Holdings – Dallas-based real estate investment firm. Total donations: $1.5 million
  • Weaver Holdings and Weaver Popcorn – Indiana-based company specializing in popcorn. Total contributions: $1.9 million
  • Stephens Inc – a Little Rock, Arkansas, broker dealer. Total donations: $1.3 million
  • Armstrong Group – telecommunications conglomerate in Pennsylvania. Donation: $1.3 million
  • JWC III Revocable Trust – Donatoin: $1.3 million
  • Robert Brockman – executive at Ohio-based Reynolds and Reynolds. Similarly to Restore Our Future, three firms sharing a P.O. Box – CRC Information Systems Inc, Fairbanks Properties LLC and Waterbury Properties LLC – split the donation three ways. Total donations: $1 million
  • Whiteco Industries – Indiana-based company involved in advertising, construction, entertainment and hotels. Donation: $1 million
  • The Mercury Trust – entity linked to California private equity firm of Saul Fox. Donation: $1 million
  • Clayton Williams Energy Inc – Midland, Texas-based drilling company. Donation: $1 million
  • Jay Bergman – of PETCO Petroleum Corporation. Donation: $1 million
  • Kenneth Griffin – Citadel Investment Group chief executive. Total donations: $1 million
  • Wayne Hughes – Founder of Public Storage. Total donations: $1 million
  • John Childs – Chairman and CEO of Boston-based JW Childs Associates. Total donations: $1 million
  • Philip Geier – New York executive. Total donations: $1 million
  • Irving Moskowitz – a Florida bingo magnate who runs a charity in California and is known for his support of Jewish settlers in East Jerusalem. Donation: $1 million
  • Robert Mercer – co-CEO of hedge fund Renaissance Technologies. Donation: $1 million

 

BARACK OBAMA (Democrat)

  • Total raised, including transfers: $609.4 million
  • Raised in September, including transfers: $136.2 million
  • Total transferred from the funds jointly used by the campaign and the Democratic Party: $176.6 million
  • Transferred in September: $39.8 million
  • Total spent: $469.9 million
  • Spent in September: $111.4 million
  • Cash on hand: $99.3 million
  • Debt: $2.6 million

DEMOCRATIC NATIONAL COMMITTEE

  • Total raised: $253.6 million
  • Raised in September: $20.3 million
  • Total transferred in: $108.4 million
  • Transferred in September: $4.0 million
  • Total spent: $261.6 million
  • Spent in September: $22.8 million
  • Cash on hand: $4.6 million
  • Debt: $20.5 million

OBAMA VICTORY FUND 2012 (The main joint Obama/DNC fund)

  • Total raised: $371.1 million
  • Raised in September: $80.0 million
  • Cash on hand: $45.2 million

 

MITT ROMNEY (Republican)

  • Total raised, including transfers: $337.2 million
  • Raised in September, including transfers: $76.2 million
  • Total transferred from the funds jointly used by the party and the Romney campaign: $236.4 million
  • Transferred in September: $34.2 million
  • Total spent: $298.2 million
  • Spent in September: $54.7 million
  • Cash on hand: $63.1 million
  • Debt: $5.0 million

REPUBLICAN NATIONAL COMMITTEE

  • Total raised: $331.2 million
  • Raised in September: $48.4 million
  • Total transferred in: $127.5 million
  • Transferred in September: $28.6 million
  • Total spent: $249.4 million
  • Spent in September: $42.4 million
  • Cash on hand: $82.6 million
  • Debt: $9.9 million

ROMNEY VICTORY INC (Joint Romney/RNC fund – third quarter, July through Sept.)

  • Total raised: $375.6 million
  • Raised in third quarter: $235.2 million
  • Cash on hand: $37.4 million

Appendix: SUPER PACS:

RESTORE OUR FUTURE, a Super PAC supporting Romney

  • Total raised: $110.5 million
  • Raised in September: $14.8 million
  • Total spent: $94.9 million
  • Spent in September: $4.6 million
  • Cash on hand: $16.6 million

PRIORITIES USA, a Super PAC supporting Obama

  • Total raised: $50.1 million
  • Raised in September: $15.3 million
  • Total spent: $43.6 million
  • Spent in September: $12.8 million
  • Cash on hand: $7.3 million

AMERICAN CROSSROADS, a Super PAC supporting Republicans

  • Total raised: $68.0 million
  • Raised in September: $11.4 million
  • Total spent: $53.4 million
  • Spent in September: $27.9 million
  • Cash on hand: $15.8 million

Source: Reuters

Washington Post: Vendors finesse law barring ‘coordination’ by campaigns, independent groups

Sunday, October 14th, 2012

Mitt Romney’s presidential campaign and American Crossroads, an allied interest group, are barred by federal law from working together on political advertising.

But it’s perfectly legal for them to hire the same company to run Internet ads. That company uses some of the same employees to represent the two clients, and the same databases to store information on people it will target with ads.

Washington Post

By all accounts, Romney’s campaign and the group spending millions of dollars on his behalf are not violating the law that prohibits campaigns and independent organizations from coordinating their efforts.

The law was meant to separate campaigns from outside groups with wealthy donors — the theory being that large political contributions could have a corrupting influence on candidates.

But it is a fuzzy line that separates the campaigns from groups such as Crossroads and the super PACs that have sprung up in the wake of a 2010 Supreme Court decision that allowed unrestricted corporate spending on campaigns. And the 2012 campaign, with its surge in spending from independent groups, offers many examples of how little the law actually prohibits when it comes to “coordination.”

The major super PACs helping President Obama and Romney, for example, were formed by men who previously worked as aides to the candidates.

And at least 30 political consulting companies have been hired by both a campaign or party and an independent group, according to campaign disclosure reports. The consultants provide a range of services, from polling to legal advice to media consulting.

The Democratic Congressional Campaign Committee shares 10 vendors with the major super PAC helping Democrats win House races, the House Majority PAC. The super PAC, for example, paid $31,000 to Ralston Lapp Media to produce television ads, while the DCCC paid $173,000 for the same purpose. Nine Democratic congressional candidates also hired the company.

Contributions to candidates are capped at $2,500 for each election, but for many types of interest groups, there are no restrictions on donations. In order to prevent the groups from becoming de facto extensions of the campaigns, they are prohibited from spending money at the request of candidates or using inside knowledge of their strategies or wishes. But hiring a firm that works for both sides is legal as long as information is not shared.

Advocates for tighter restrictions on political money say the weakness of the law has allowed interest groups to essentially become another arm of the campaigns.

“The real scandal in 2012 is what’s legal,” said Paul S. Ryan, a lawyer with the Campaign Legal Center, which supports tightening campaign finance laws. “Certainly the law does not prevent coordination in the way that word is generally understood by the public.”

Over the past decade, more than 30 complaints of alleged coordination in federal races have been brought to the Federal Election Commission. But the complaints rarely prompt investigations because of the difficulty of collecting private communications that might prove coordination.

The high-tech realm of online ad targeting offers a new example of how tightly integrated campaigns and interest groups can become.

Romney’s campaign has bought $21 million in online advertising through an Alexandria-based ad agency called Targeted Victory, the same firm hired by American Crossroads to run $1 million in ads. The company spends most of that money buying space on the Web through ad networks.

The company also works for the Republican Party, prominent Republican House and Senate candidates, and interest groups active in congressional races, including the American Action Network, Americans for Prosperity and Crossroads GPS, which is affiliated with American Crossroads.

Targeted Victory uses Internet video ads to persuade people to oppose Obama and vote for Romney. It also uses a stockpile of data it has collected on Web users to reach them with ads for both Romney and Crossroads.

Separately, Targeted Victory keeps a record of those who have visited the Romney campaign Web site or the Crossroads site, and stores that information in the same location.

Romney campaign spokeswoman Andrea Saul said the campaign’s vendors “understand the law and follow it.”

Targeted Victory’s chief executive, Michael Beach, said in an e-mailed statement that the company has separate teams of strategists for the two clients, crafting ad messages and finding potential voters online. Those teams work on opposite sides of a “firewall” described in FEC regulations, he said.

“Targeted Victory takes its compliance responsibilities seriously and continually reviews its operations to ensure compliance with the FEC rules,” Beach wrote.

He said the rules allow some employees to work for both Romney and Crossroads, including “personnel who merely forward the Internet ad buys to placement firms.”

FEC regulations specifically point to those working on “the selection or purchasing of advertising slots” as employees with the potential to share inside information that could be used for coordination.

A look at the same custom-built software running on the Romney and Crossroads Web sites shows the tight links between the organizations. When people visit the Romney or Crossroads site, their browsers download software written by Targeted Victory.

The code creates a trigger so that when users press a “donate” button, for example, their browsers report that information, which is kept in a database that commingles Romney and Crossroads users.

When users move on to a site with ads, that starts another chain reaction of code, transmitting the Romney and Crossroads information to ad networks, which may then display Romney or Crossroads ads.

Storing data together and using the same employees to represent Romney and Crossroads is not coordination under the law. To break the rule, an interest group would have to use inside information on the candidate’s needs or wishes to shape its own ad campaign.

Geoff Garin, a Democratic pollster who works for prominent liberal super PACs, said he uses a password-protected computer system to keep sensitive materials from his colleagues who might work directly for candidates or the official party committees. He praised the value of the rules as one of the only defenses keeping the work of candidates and well-funded interest groups separate.

“It seems we have a Swiss-cheese system here,” Garin said. “No offense to Swiss cheese.”

Dan Eggen contributed to this report.

© The Washington Post Company

Los Angeles Times: Poll: Americans largely in favor of campaign spending limitations

Monday, September 17th, 2012

Amid the flurry of cash directed at the presidential campaigns as well as congressional races, a new poll reveals that the American people aren’t pleased with the vast amount of fundraising now involved in elections.

Los Angeles Times

An Associated Press-National Constitution Center poll found that 83% believe there should be at least some limits on the amount of money corporations, unions and other organizations are permitted to contribute to groups seeking to influence the outcome of presidential and congressional races. And 67% think that limits should also be placed on individual contributions to campaigns. That matches up with just 13% who don’t want limits on external contributions, and 28% who repudiate limits on individuals.

The poll comes during the first post-Citizens United presidential election, stemming from the 2010 Supreme Court decision which ceased limitations on campaign expenditures aimed toward independent organizations made by corporations, ruling them to be free speech protected under the Constitution.

INTERACTIVE: Spending during the 2012 election

The Los Angeles Times has detailed much of the money spent by third-party groups on either side of the presidential race, which as of Sunday has topped $152 million since April. That spending is dominated by spending against President Obama, ($88.9 million), compared with the relatively small amount spent so far against Mitt Romney ($34.9 million).

Americans for Prosperity, a conservative nonprofit advocacy group heavily backed by the well-known Koch brothers, top the list of groups working against Obama, spending $30.8 million on “issue ads.” Restore Our Future, a group formed by former aides of Romney’s campaign, narrowly trails AFP with $28.4 million.

Spending against Romney, on the other hand, is singularly dominated by Priorities USA Action’s $26.4 million, which accounts for over 75% of the total spending against the Republican candidate. Priorities USA Action, like Restore Our Future, was started by former White House aides.

Tellingly, opposition spending dwarfs spending made in favor of either candidate, with just $4.8 million spent in support of Obama, and $13 million spent in favor of Romney.

INTERACTIVE: Battleground states map

As for the presidential rivals themselves, Obama and the Democratic Party, for the first time since April, recently out-raised Romney and the Republican National Committee during August, $114 million to $111.6 million. Through August, Obama and the DNC lead Romney and the RNC in fundraising $747.4 million to $645.9 million.

Romney has repeatedly defended the ruling in Citizens United, while Obama has called for it to be overturned.

The AP-National Constitution Center Poll was conducted between Aug. 16-20 with landline and cellphone interviews among 1,006 individuals with a margin of error of +/- 3.9 points.

LA Times: $119 million and counting: Track groups’ spending on 2012 race

Friday, August 31st, 2012

The figures reveal just part of the picture of outside spending, however. While super PACs must report their spending to the Federal Election Commission, tax-exempt advocacy groups only have to report money they spend on certain kinds of ads

LA Times

“Super PACs” and other outside groups have reported spending more than $119 million on the presidential campaign since Mitt Romney unofficially clinched the Republican nomination in early April, a sum that underscores the profound impact independent political groups are having on the 2012 presidential race.

Two-thirds of that money has gone into television ads and other efforts opposing President Obama’s reelection and backing Romney’s bid, according to an analysis of Federal Election Commission data by the Times Data Desk.

Readers can track the spending by outside groups with a new online tool, which provides the expenditures for each group and a sample of the television ads that have shaped each week of the race. 

The number of outside groups engaging in campaign activity increased exponentially in the last two years, the result of a series of federal court decisions that allowed corporations to make unlimited political expenditures and blessed the creation of super PACs, which can raise unlimited sums.

Ostensibly, super PACs must operate independent of the candidates and political parties. But both Obama and Romney are being backed by super PACs run by former aides. The pro-Romney Restore Our Future has spent $28.5 million against Obama so far. The pro-Obama Priorities USA Action has poured in nearly $21.5 million against Romney. (Both groups have spent additional funds on ads backing their candidates.)

The figures reveal just part of the picture of outside spending, however. While super PACs must report their spending to the Federal Election Commission, tax-exempt advocacy groups only have to report money they spend on certain kinds of ads.

And those groups, which do not disclose their donors, have been some of the most active in this campaign.

Together, American Crossroads and its nonprofit arm, Crossroads GPS, are expected to spend $300 million, and Americans for Prosperity, backed by billionaire energy executives and brothers David and Charles Koch, has a $151-million budget. The U.S. Chamber of Commerce plans to pump at least $50 million into congressional races — which means those four groups alone could account for half a billion dollars of spending in the 2012 cycle.

Crossroads co-founder Karl Rove told donors in a private briefing Thursday that conservative outside groups spent $110 million against Obama just between May 15 and July 31, Bloomberg reported Friday.

Los Angeles Times: After winning right to spend, political groups fight for secrecy

Wednesday, June 27th, 2012

Conservatives who said disclosure of donors would prevent corruption now are attacking such rules, citing fears of harassment

Los Angeles Times

During their long campaign to loosen rules on campaign money, conservatives argued that there was a simpler way to prevent corruption: transparency. Get rid of limits on contributions and spending, they said, but make sure voters know where the money is coming from.

Today, with those fundraising restrictions largely removed, many conservatives have changed their tune. They now say disclosure could be an enemy of free speech.

High-profile donors could face bullying and harassment from liberals out to “muzzle” their opponents, Sen. Minority Leader Mitch McConnell (R-Ky.) said in a recent speech.

Corporations could be subject to boycotts and pickets, warned the Wall Street Journal editorial page this spring.

Democrats “want to intimidate people into not giving to these conservative efforts,” said Republican strategist Karl Rove on Fox News. “I think it’s shameful.”

Rove helped found American Crossroads, a “super PAC,” and Crossroads GPS, a nonprofit group that does not reveal its donors.

“Disclosure is the one area where [conservatives] haven’t won,” said Richard Briffault, an election law professor at Columbia Law School. “This is the next frontier for them.”

A handful of conservative foundations, themselves financed with millions in anonymous funding, have been fighting legal battles from Maine to Hawaii to dismantle disclosure rules and other limits on campaign spending.

One group, the Center for Individual Freedom based in Alexandria, Va., has spent millions on attack ads against Democratic congressmen and state judicial candidates. It also has sued to block laws and court rulings that would have required disclosure of the source of the money for the ads.

Jeffrey Mazzella, the center’s president, declined to comment on the lawsuits or discuss the group’s donors, saying the center lays out its positions in detail on its website and in news releases.

Bradley A. Smith, a Republican and former chairman of the Federal Election Commission, is among those whose views have changed on disclosure. In 2003, he endorsed disclosing donors as a way to discourage corruption by “exposing potential or actual conflicts of interest.”

But later, he said, he concluded that disclosure requirements could be burdensome for citizen groups. And now that campaign reports are posted online, he added, people can easily identify and target their opponents.

The business community began fighting disclosure in 2000, when the U.S. Chamber of Commerce, after buying ads supporting candidates for the Mississippi Supreme Court, successfully challenged the state’s requirements on revealing donors.

The anti-disclosure campaign was joined by libertarian legal advocacy centers, such as the Institute for Justice, founded in 1991 with seed money from trusts controlled by billionaire brothers Charles andDavid H. Koch. Starting in 2005, the institute began sponsoring studies that argued disclosure laws were ensnaring ordinary citizens in red tape and inviting reprisals.

Then came California’s Proposition 8, which banned same-sex marriage. After the initiative passed in 2008, some same-sex marriage advocates used the state’s campaign finance data to publicly identify donors who supported the ban. Proposition 8 supporters claimed they were subject to harassing phone calls and e-mails, vandalism and protests.

In arguing against disclosure rules, conservatives even reach back to the civil rights era, when authorities in Alabama tried to identify members of the National Assn. for the Advancement of Colored People. In 1958, the Supreme Court ruled those names could remain secret.

A leader of the crusade against disclosure has been James Bopp Jr., a libertarian lawyer based in Terre Haute, Ind. The original lawyer in the Citizens United case, in which the Supreme Court eased restrictions on independent political spending, he has brought suits to attack campaign rules in at least 30 states. In one of those suits, the Supreme Court on Monday ruled in Bopp’s favor and eliminated a Montana ban on corporate contributions.

Bopp and others say there’s nothing wrong with forcing candidates and political parties to reveal their donors, at least the larger ones. But for private citizens and independent groups, “the price of disclosure is too high,” he said.

So far, the anti-disclosure arguments haven’t won much support on the Supreme Court.

Starting with a key decision in 1976, the court has stood behind the principle that such rules help prevent corruption and keep voters informed. In the 2010 Citizens United case, an 8-1 majority affirmed disclosure rules. And later that year, conservative Justice Antonin Scalia was even more forceful in backing transparency.

Bloomberg Businessweek: Battle begins between Obama, Republican super PACs

Monday, May 7th, 2012

Independent groups favoring Mitt Romney already are launching TV advertisements in competitive states for the November general election, providing political cover against President Barack Obama’s well-financed campaign while the Republican candidate works to rebound from a bruising and expensive nomination fight

Bloomberg Businessweek

Some conservative organizations also are planning big get-out-the-vote efforts, and Romney backers are courting wealthy patrons of his former GOP rivals.

Taken together, the developments underscore how dramatically the political landscape has changed since a trio of federal court cases — most notably the Supreme Court’s Citizens United ruling — paved the way for a flood of campaign cash from corporations and tycoons looking to help their favored candidates.

“Citizens United has made an already aggressive anti-Obama movement even more empowered,” said Stephen Farnsworth, a professor of political science at the University of Mary Washington. “There’s now a regular Republican line of attack on Obama, even when the Romney campaign is taking a breather, raising money and preparing for the general election.”

The general election spending — and advertising — has only just begun. Voters in roughly a dozen hard-fought states will be inundated with TV ads, direct mail, automated phone calls and other forms of outreach by campaign staff members and volunteers pleading for their votes. While Obama and Romney both will spend huge amounts of money in the coming months, an untold additional amount will come from outside organizations called super PACs that can collect unlimited contributions from corporations, unions and individuals.

Already, Obama’s campaign has spent $3.6 million on commercials in key battlegrounds in the weeks since Romney became the presumptive Republican nominee.

Its latest ad depicts Romney, a wealthy former private equity executive, as a corporate raider who once maintained a Swiss bank account. The president had $104 million on hand at the end of March, giving his campaign a 10-1 advantage over Romney who had just $10 million his campaign bank at the same time.

But Obama is unlikely to receive anywhere near the kind of financial backup Romney is already getting from outside groups. The pro-Obama super PAC Priorities USA Action has raised just $10 million since its inception, and few other Democratic-leaning groups have signaled they plan to compete with the pro-Romney efforts.

The latest of these comes from Restore Our Future, a super PAC run by former Romney advisers.

The group announced Wednesday it will go up with $4.3 million in ads this week in nine states that will be key to winning the White House. The ad, “Saved,” describes Romney’s efforts that helped lead to the rescue of the teenage daughter of a colleague after she disappeared in New York for three days.

ROF was by far the biggest advertiser during the Republican nominating contest, spending $36 million on ads attacking Rick Santorum and Newt Gingrich. The group has raised more than $51 million since its inception.

Its initial general election push follows a $1.7 million, three-state ad buy from Crossroads GPS. That group’s spot attacks Obama’s energy policies. And it is an arm of American Crossroads, a super PAC with ties to President George W. Bush’s longtime political director Karl Rove and one of the most prolific spenders in the 2010 cycle that put the House in Republican hands. The two Crossroads groups have already raised $100 million collectively for 2012 and plan to spend as much as $300 million to defeat Obama and other Democrats.

Americans for Prosperity, a conservative-leaning independent group backed by the billionaire energy tycoons Charles and David Koch, dropped $6.1 million on ads in eight general election swing states last week hitting Obama for allowing millions in federal stimulus money to be directed to green energy companies overseas. The group spent $6.5 million earlier this year on ads criticizing Obama over Solyndra, a California-based solar energy company that went bankrupt despite a $535 million federal loan guarantee.

AFP president Tim Phillips said the group planned to raise $100 million and that slightly less than half would go to advertising. Much of the remaining amount, he said, would be used for field operations like rallies, bus tours, canvassing, phone banks and micro-targeting.

AFP boasts chapters in 34 states and its field operations have included annual conservative conferences.

Phillips cited Florida, where the group now has a staff of 20 and has promoted bus tours assailing Obama and Democratic Sen. Ben Nelson.

“We use our rallies to let people know how their president and their senators and congressmen are voting on key issues,” Phillips said. “A rally focusing on government over-spending can be as effective as a media buy.”

The Romney campaign, by contrast, has not run its own TV ads since former Pennsylvania Sen. Rick Santorum dropped out of the GOP nomination fight in April.

Senior Romney aides said they are closely tracking the super PAC ad buys from allies but insist there is no coordination between the campaign and the outside groups.

At the same time, Romney’s team also is working to improve relations with Sheldon Adelson and Foster Friess, billionaires who almost single-handedly financed super PACs supporting Romney’s opponents during the nomination fight.

Representatives of ROF and other Romney backers have reached out to Adelson, a casino mogul who contributed about $20 million to a super PAC supporting Newt Gingrich. But Adelson has not yet given money to the pro-Romney efforts, and a person close to him said he doesn’t want to be a campaign distraction and may give money only to groups like Crossroads GPS and other nonprofit advocacy organizations not required to disclose their donors.

Friess, who helped bankroll a super PAC supporting Santorum, has said he would back Romney and has spoken to Romney supporters.

Romney’s campaign concedes that the super PAC activity alleviates financial stress as he works to add staff and raise campaign cash.

His aides are also noting Priorities USA Action’s slow start compared to the pro-Romney groups. The disparity is fueling a quiet confidence among Romney advisers who believe that his super PAC support will significantly narrow Obama’s current 10-to-1 cash advantage

Emory Wheel: Media and Super PACs Dominate Our Political Discourse

Wednesday, March 28th, 2012

In our time, the best advice to give someone looking to make a difference in the nation’s political discourse would be to not seek elected office and stay out of politics. With the advent of Super PACs and a 24-hour news cycle, pundits and political agencies have more influence than Congress itself.

Emory Wheel

In the words of comedian Robin Williams: “Politicians should wear uniforms like NASCAR drivers so we can identify their corporate sponsors.”

Gallup.com has consistently rated congressional approval around 12 percent for the past several months and for good reason — it doesn’t get anything done. Last summer’s debt ceiling debate, stalling the American Jobs Act and preventing members of Congress from participating in insider trading are only a few examples of the impotence of the legislative branch.

Even in the 111th Congress, which passed the American Recovery and Reinvestment Act of 2009, the Lilly Ledbetter Fair Pay Act of 2009 and the Patient Protection and Affordable Care Act (PPACA), required 60 votes in the Senate to even debate the passage of a bill.
This is certainly not a recent development, but what has become increasingly relevant are the rise of political organizations that lack transparency, as they are fueled by anonymous donors, as a result of the disastrous Supreme Court’s Citizens United decision.

Although Super PACs are prohibited by law from aligning with a particular candidate, it is no secret that there is a definite connection between candidates and the innocuous-sounding money machines that put our nation’s interests in the hands of the wealthy few.

Winning Our Future supports the imminent bust of Newt Gingrich’s candidacy, Restore Our Future is the Super PAC funding Mitt Romney’s future “restoration” of his ever-changing political opinions, the Red White and Blue Fund pulls in the green for Santorum and Revolution PAC appears to back Ron Paul’s ash heap candidacy.

The irony of Super PACs in the Republican primaries is that with as much money and power they control, they prop up a band of misfits who are clearly unable, with the potential exception of Romney, to make the White House their next place of residence. If the Republican National Convention is split in Tampa this August, it will likely be because of the many nameless individuals controlling Super PACs.

Following the theme of centralized power and individuals pulling the political strings from behind the curtain are people like Grover Norquist who is unfamiliar to most Americans despite being called, by many, the most powerful man in Washington. His often-overlooked role is his so-called Taxpayer Protection Pledge, which binds 238 Representatives and 41 Senators, and in effect, the rest of Congress from ever raising taxes despite support from the majority of Americans to do so. The punishment for breaking the pledge is conservative uproar, but the consequence for following through with it is fiscal irresponsibility and denying the reality that taxes occasionally need to be raised.

The problem exists not only for conservative causes, but also with people like George Soros funding liberal organizations and several democratic congressmen across the nation. Organizations like the Human Rights Campaign that fights for gay rights, though a noble cause, have gained considerable influence in recent years.

And if controlling the money in elections isn’t enough, the media is also drastically more powerful than Congress. Although they use completely different tactics, Fox News and people like Jon Stewart or Stephen Colbert do more to shape public opinion than just about anyone in the country, and their viewers have more trust in them than their elected officials.

Fox News, in particular, has done a fantastic job to blur the line between quasi-pundits and quasi-politicians with Sarah Palin, Mike Huckabee and Karl Rove as contributors. This is particularly troubling considering that the rule of thumb for these talking heads is to make the most outlandish statements in order to have better ratings.

If the argument that individuals who do not hold public office have more power than those on Capitol Hill is not clear enough, consider the last time any lawmaker received more attention for legislating than did Rush Limbaugh’s recent comments about Georgetown Law student Sandra Fluke or the last time a lawmaker received more attention for legislative efforts than for controversy.

In the current political system, money and the media have managed to tilt power in favor of the few and the result is a Washington that works for special interests, rather than special interests working for Washington, let alone Washington working for its constituents.

Wall Street Journal: Texas Billionaire Doles Out Election’s Biggest Checks

Thursday, March 22nd, 2012

Few people want to defeat President Barack Obama more than billionaire Harold Clark Simmons, who is willing to spend many millions of dollars in the quest. As it happens, campaign rules now give him the opportunity.

Wall Street Journal

Watching a TV news report that Republican presidential candidate Rick Santorum was rising in polls last month, Mr. Simmons wondered about the prospects of the former Pennsylvania senator. He called his personal political muse, Republican strategist Karl Rove.

“Is he worth investing into his super PAC?” Mr. Simmons asked. He rose from his leather recliner in the den and stood at a bay window overlooking swans gliding on a lake encircled by 17,000 tulips. “Does he have a chance?”

“Yes, I wouldn’t count him out,” Mr. Rove said. Mr. Simmons’s wife, Annette, who was keen on Mr. Santorum, promptly donated $1 million to his super PAC, cash badly needed for an ad blitz ahead of the Super Tuesday primaries.

The 80-year-old Texan, who heads Contran Corp., a chemicals and metals conglomerate, gave hefty donations to the super PACs supporting other GOP candidates during similar moments in the spotlight: Rick Perry’s optimistic entry into the race last summer, and after the debate-driven surge of Newt Gingrich. Mr. Simmons has so far given $800,000—including $500,000 this week—to super PACs backing former Massachusetts Gov. Mitt Romney, who won the Illinois primary Tuesday and contends no rival can catch him in the GOP delegate race.

It isn’t particularly important which man wins the nomination, for Mr. Simmons simply wants to defeat the president and reduce the reach of government. “Any of these Republicans would make a better president than that socialist, Obama,” said Mr. Simmons during two days of rare interviews at his Dallas home and office. “Obama is the most dangerous American alive…because he would eliminate free enterprise in this country.”

The tall, lanky, soft-spoken industrialist has given more than $18 million to conservative super PACs so far, making him the 2012 election’s single largest contributor—ahead of billionaires Sheldon Adelson, Mr. Gingrich’s financial patron, and Foster Friess, Mr. Santorum’s biggest donor.

Sipping lemonade iced tea made with lemons grown on his California estate east of Santa Barbara—next door to Oprah Winfrey’s place in Montecito—Mr. Simmons said he planned to spend $36 million before the November election.

Unlike some big donors—including Mr. Adelson—Mr. Simmons isn’t driven by an attraction to a specific candidate or policy. His motivation is broader: to elect Republicans up and down the line in the hopes they will change the overall U.S. tax and regulatory approach.

That helps explain why the biggest chunk of his political contributions in this election cycle have gone not to individual candidates but to Mr. Rove-advised super PAC American Crossroads—its stated mission to defeat Mr. Obama and elect “majorities in both the House and the Senate that are 100% dedicated to rescuing our economy from the Obama agenda.”

Mr. Simmons has some businesses that are heavily regulated, which helps explains his interest in deregulation. He also pushes for tort reform. One of his companies, NL Industries Inc., has fought lawsuits from school districts and businesses over lead paint that it made before Mr. Simmons acquired it.

More broadly, he said, he and other individuals need to contribute to match the “unlimited amounts from labor unions” that benefit liberal candidates.

“I’ve got the money, so I’m spending it for the good of the country,” said Mr. Simmons, whose net worth is estimated at $10 billion, up from an estimated $4.1 billion in prerecession 2006, according to Forbes. He wears $3,000 Brioni sport coats in a nod to his wealth and Wal-Mart underwear in a sign of a frugal upbringing; his early years were spent without indoor plumbing or electricity.

Republicans consider super PAC contributions essential to offset an expected advantage by Mr. Obama’s campaign, which had $85 million in reserves at the end of February—more than all four GOP presidential candidates combined, and well more than the $7.3 million on hand for Mr. Romne

Democrats also have financial advantages when it comes to official party organizations. The Democratic National Committee has outraised its Republican counterpart $157.7 million to $116.3 million so far, according to data compiled by the Center for Responsive Politics. The two party organizations have roughly the same amount of cash on hand, but the Republican National Committee, still digging out of a deep financial hole from the 2010 election, has about twice as much debt.

Democratic committees to support House and Senate candidates also have slightly outraised their Republican counterparts so far this cycle.

In contrast, the Republican advantage lies with the super PACs. The largest Democratic-leaning super PAC, the one set up to benefit Mr. Obama, has raised just $6.3 million compared with $26.9 million by American Crossroads. (The American Crossroads figure doesn’t include money contributed to a sister organization that doesn’t have to make public its donors.)

This year’s election seems tailor-made for Mr. Simmons. New rules effectively eliminate limits for those willing to take advantage of a string of federal court decisions and regulatory changes that together allow super PACs to take unlimited donations and advocate for a candidate or party, as long as they don’t coordinate their spending with the presidential campaigns.

People who disagree with the changes say super PACs now have more influence than political parties and are less accountable. “Harold Simmons is unleashed to give as much as he wants—whether motivated to help Republicans or his business empire,” said Bill Allison, editorial director of Sunlight Foundation, a nonpartisan government watchdog group.

Ben LaBolt, of the Obama campaign, said: “Mr. Simmons is a self-proclaimed corporate raider who, like many others representing special interests, will spend whatever it takes to maintain the ability to write rules that benefit his own interests at the expense of middle-class Americans and to the detriment of what’s best for the nation.”

Mr. Simmons said, “You never talk about what you want when giving money.” Besides, he added, “I don’t pay attention to what other people think…There shouldn’t be restrictions of any kind on political contributions.”

He is a longtime political donor; he was fined by the Federal Election Commission for surpassing contribution limits in 1988 and 1989, which he said was inadvertent. When politicians call his office now, his secretary runs an Internet search to ensure they are “pro-business, antigovernment,” he said. He isn’t interested in such conservative social issues as abortion. “I’d probably be pro-choice,” he said. “Let people make decisions on their own bodies.”

Longtime friend and oil man T. Boone Pickens described Mr. Simmons as a man who backs up his beliefs with his bucks. “Harold isn’t doing this for attention,” the fellow Republican said. To the contrary, while mega-donors Mr. Adelson and Mr. Friess have gone on TV to tout big gifts to their candidates, Mr. Simmons rarely speaks publicly. He agreed nonetheless to talk with The Wall Street Journal on a range of subjects, including money, politics and his appetite for sweet potatoes.

The son of school teachers from tiny Golden, in east Texas, Mr. Simmons earned economics degrees—a bachelor’s degree in 1951 and a master’s degree a year later—from the University of Texas, where he also played guard on the 1951 basketball team that won the Southwest Conference. He worked as a bank examiner for the federal government and a bank loan officer.

“All the guys getting loans had high-school educations and were making more money,” Mr. Simmons said. “I had grandiose financing ideas but no one listened to me. I had no credibility as a businessman.”

To remedy that, Mr. Simmons bought his first business in 1960, a drugstore across the street from Southern Methodist University, using $5,000 in savings and a $95,000 loan. He kept buying another and another, eventually getting a pilot’s license to visit them all. In 1973, he sold his 100-store chain for $50 million. Mr. Simmons used the proceeds to buy stock of underperforming public companies, turning into a corporate raider in the 1970s and 1980s with the nickname “Ice Man.”

Mr. Simmons said his political activism was sparked in 1983, when the Labor Department accused him of mishandling pension fund assets. A federal judge found he invested an excessive portion of the pension in a takeover target, Amalgamated Sugar Co. The judge awarded no cash damages because the fund earned 50% on its investment. Mr. Simmons agreed not to use pension funds in takeover bids for 10 years, according to a consent decree that settled the case.

“That’s when I started contributing to politicians with free-market and antiregulation agendas,” he said. “If the Labor Department hadn’t sued, that pension would be as rich as me.”

His corporate empire, under the Contran holding company, includes large stakes in multinational conglomerates NL Industries, Titanium Metals Corp., Valhi Inc., Kronos Worldwide Inc. and Keystone Consolidated Industries Inc. These diverse interests include the heavily regulated waste-control and nuclear-waste disposal businesses, as well as some of the world’s biggest manufacturers of chemicals, components and titanium for military and commercial aircraft.

Many of these companies bear the weight of government regulatory decisions, making Mr. Simmons’s political interest more than simple patriotism. “We live with a smothering of government,” said Steven Watson, Contran’s No. 2 executive. He listed oversight by the Environmental Protection Agency, banking regulators, the Labor Department and Securities and Exchange Commission, as well as “frivolous lawsuits” brought by state attorneys general.

From a spotless desk, Mr. Simmons pores over financial statements of his far-flung empire, which has 10,000 employees world-wide. “No one understands my financials better than I do,” he said. “It’s so much fun to run my companies.”

His business success allows a lavish life. On a recent weekend, Mr. Simmons flew his jet, with two co-pilots aboard, to his Santa Barbara County estate. He also frequently flies to his Arkansas ranch—filled with 35 bears and 100 elk, as well as 250 deer and 300 wild turkeys for hunting.

This month, Mr. Simmons played golf at Augusta National and frequently plays with his stepson Andy Fleck, who works for Contran. Mr. Simmons works out at home with a Pilates instructor. He drinks Opus One wine and typically eats fish. On Sunday nights, he grills steak for dinners with his wife.

He and Annette Simmons, 76, his wife of 31 years, are major philanthropists, with their names on buildings throughout the state. “Harold doesn’t say a word. He’s so quiet, he hardly talks,” said Dallas grande dame Ruth Atshuler. “He just makes tons of money and gives it away.” At social events, caterers give Mr. Simmons a doggie bag to take home in his chauffeur-driven Bentley.

He has given $500 million to mostly Texas charities, including a new organ-transplant hospital wing after his successful kidney transplant a few years ago. His stepdaughter Amy donated a kidney to Mr. Simmons, who later adopted her. He also gave $5 million to a South African school started by his California neighbor, Ms. Winfrey. The TV host had Mrs. Simmons on her show twice—about the annual sweet-potato festival in Mr. Simmons’s hometown and Mrs. Simmons’s famous tea parties. At her 50th birthday party, Ms. Winfrey danced first with Mr. Simmons—until John Travolta cut in.

The billionaire takes day trips every week to visit obscure libraries, churches and museums around Texas. He arrives unannounced and typically turns over a big check or several hundred dollar bills. He gives $50 and $100 bills to panhandlers to and from work. If they use the money to buy liquor or drugs, he said, it’s “not my business.”

The Simmonses hobnob with Dallas Cowboys owner Jerry Jones and Mr. Pickens and their wives. “Harold was my first supporter and friend when there was no honeymoon in this town,” said Mr. Jones, who was reviled when he bought the team 23 years ago and fired coach Tom Landry. He and Mr. Simmons have neighboring boxes at the new Cowboy stadium.

On a recent afternoon, Mr. Simmons, donning a Dallas Cowboy Windbreaker, walked his Springer Spaniel Duke and counted the ducks in his lake, 42 on this morning. Three times he climbed the 60 stairs of the brick tower he built in his backyard to watch the Dallas sunset

Later that day, Mr. Simmons, who goes to Luby’s Cafeteria for a $5.95 lunch or brings leftovers, met with the two of his four daughters who run his charitable foundation. Serena Simmons Connelly strongly disagrees with her father’s politics. But she recently removed her Obama bumper sticker as a concession. “Dad and I have parking spots next to each other,” she said.

Mr. Simmons was a key donor for the Swift Boat veterans’ attack ads against Democratic presidential candidate John Kerry in 2004, as well as the 2008 campaign ads touting ties between Mr. Obama and Bill Ayers, co-founder of the radical Weather Underground. “If we had run more ads,” he said, “we could have killed Obama

Mr. Simmons relishes his chance to give freely in this year’s election, particularly in conjunction with Mr. Rove, the top political adviser to former President George W. Bush. “Karl is the best political mind out there,” he said.

In early 2010, Mr. Rove gathered a handful of big Texas donors for lunch at a private club in Dallas, including Mr. Pickens, real-estate magnate Harlan Crow and Mr. Simmons. Mr. Rove explained how the fledgling group American Crossroads would work to defeat Mr. Obama and get GOP control of Congress. “All of us are responsible for the kind of country we have,” Mr. Rove recalled saying.

After Mr. Rove paused, Mr. Simmons spoke first. “I’m in,” he said. Mr. Rove said Mr. Simmons’s early nod helped give the group instant credibility.

Mr. Simmons said he relies on Mr. Rove’s advice on the prospects and positions of candidates. Aside from his contributions to presidential contenders, Mr. Simmons and his private holding company have, since 2010, donated almost $20 million to American Crossroads, which plans with its sister organization to spend as much as $300 million to defeat Democrats in the November election

The very private Mr. Simmons and the well-known Mr. Rove have become unlikely partners, chatting by phone every couple of days. “Karl won’t waste my money,” Mr. Simmons said, noting that American Crossroads doesn’t sink money into hopeless or easily winnable contests.

“Getting control of Congress is almost as important as beating the president,” he said. “If Republicans can get control of the Senate, we can block that crap,” which he described as over-regulation of business.

Last week, Mr. Simmons considered whether to give more money to the GOP contenders, as the race narrowed to Messrs. Romney and Santorum. The billionaire with a knack for numbers sees merit in Mr. Romney’s mathematical argument that only he will win enough delegates to clinch the nomination, and he put a half million dollars behind his calculation this week.

“I have lots of money, and can give it legally now,” he said, “just never to Democrats.”

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.