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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

Business Insider: Andrew Ross Sorkin Rips Into Tim Pawlenty For Taking New Wall Street Lobbying Gig

Tuesday, September 25th, 2012

To boil it down to one sentence, Sorkin says that this appointment “is the clearest sign yet of the flexible ethic that makes the revolving door in Washington spin faster.”

Business Insider

In Dealbook this morning, Andrew Ross Sorkin assessed former Minnesota Governor Tim Pawlenty’s new job as president of the Financial Services Roundtable, Wall Street’s K-Street lobby group.

Actually, “assessed” doesn’t really capture what Sorkin does in the piece. He goes over a laundry list of examples of when Pawlenty was passionately and unabashedly at odds with Wall Street. The issues range from last summer’s debate over raising the debt ceiling to the bank bailouts.

To boil it down to one sentence, Sorkin says that this appointment “is the clearest sign yet of the flexible ethic that makes the revolving door in Washington spin faster.”

But not so fast. Pawlenty has always championed one of Wall Street’s favorite causes — limiting financial regulation. That translated into significant donations to his presidential bid from individuals at Goldman Sachs and Wells Fargo, according to Open Secrets.

And when Sorkin asked Steve Bartlett, the current president of the Financial Services Roundtable, about the Pawlenty pick, things got really frank.

From the NYT:

When I asked how he felt about Mr. Pawlenty’s comments about the bailouts, which seem at odds with his organization, he said: “Our views are totally consistent. I don’t find those views to be at odds….”

And what about Mr. Pawlenty’s views of defaulting on the debt ceiling?

“In Washington there is an old saying, ‘Where you stand depends on where you sit.’ “

Sadly, no truer words have ever been said about the influence of money on our nation’s capital.


Read the full column at Dealbook>

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.

Washington Post: Post-Watergate campaign finance limits undercut by changes

Sunday, June 17th, 2012

In 1984, President Ronald Reagan ran for reelection without holding a single campaign fundraiser because he and Democratic challenger Walter Mondale each accepted $40 million in public funds.

President Obama and Republican challenger Mitt Romney spend much of their time crisscrossing the country to collect as much cash as possible, while political groups run by their former aides solicit donations of seven — and eight — figures from sympathetic billionaires.

Washington Post

The money poured into Richard M. Nixon’s reelection campaign from all corners: Six-figure checks flown by corporate jet from Texas; bundles of payments handed over at an Illinois game preserve; a battered brown attaché case stuffed with $200,000 in cash from a New Jersey investor hoping to fend off a fraud investigation.

During four pivotal weeks in spring 1972, the president brought in as much as $20 million — about $110 million in today’s dollars — much of it in the form of illegal corporate donations and all of it raised to avoid disclosure rules that went into effect that April.

“The decision was made that it was time to put the hay in,” John Dean, Nixon’s counsel at the time, recalled in an interview last week. “A lot of us believe Watergate might never have happened without all that money sloshing around.”

Four decades later, there’s little need for furtive fundraising or secret handoffs of cash. Many of the corporate executives convicted of campaign-finance crimes during Watergate could now simply write a check to their favorite super PAC or, if they want to keep it secret, to a compliant nonprofit group. Corporations can spend as much as they want to help their favored candidates, no longer prohibited by law from spending company cash on elections.

The political world has, in many respects, come full circle since a botched burglary funded by illicit campaign cash brought down an administration. The excesses of the Nixon era ushered in a series of wide-ranging restrictions on the use of money in campaigns, including limits on individual campaign contributions that remain in force today.

But the intervening decades have also brought changes that have undercut many of the political financing rules put in place in response to the Watergate scandal, including a Supreme Court case that freed corporations and unions to spend unlimited money on elections and a public-financing regime that has collapsed into irrelevance.

‘Money corrupts’

The result is a frenzied rush to raise money, with echoes of that spring 40 years ago: President Obama and Republican challenger Mitt Romney spend much of their time crisscrossing the country to collect as much cash as possible, while political groups run by their former aides solicit donations of seven — and eight — figures from sympathetic billionaires.

Last week, Las Vegas casino magnate Sheldon Adelson contributed $10 million to Restore Our Future, a super PAC dedicated to helping Romney win in November. Adelson, one of the richest men in the world, and his relatives have spent more than $35 million to help Republicans in the 2012 elections.

“I think we’re in the middle of a scandal that hasn’t quite gelled yet,” said Roger M. Witten, who worked in the Watergate special prosecutor’s office and now handles campaign-finance cases at WilmerHale in New York. “A tremendous amount of ground has been lost. We’ll have to relearn the lessons of Watergate — that money corrupts the system.”

Many conservatives and civil-liberties advocates take a different lesson, however, saying stricter rules would have done little to stop Nixon political operatives intent on breaking the law. Bradley J. Smith, a former Federal Election Commission chairman who is one of the leading voices for deregulating the campaign finance system, said many of the limits enacted after Watergate were ineffective and intruded on First Amendment rights.

“It’s not bad or good in and of itself to spend more money in politics,” Smith said. “We’ve got to shake off the bugaboo, the ghost of Watergate, that somehow justifies never-ending regulation of people’s free-speech rights.”

At the dawn of 1972, Nixon campaign aides, fueled by their boss’s legendary paranoia and scheming, set out to ensure his reelection by taking advantage of a window of opportunity — a loophole that let them raise unlimited, secret funds for about a month between the expiration of one election law and the enactment of a new one. The frenzy began March 10 and lasted until April 7, when legislation went into effect requiring disclosure of political donors.

In the months and years that followed, prosecutors and journalists unraveled a mind-boggling array of bank accounts and revolving political committees used to launder the money. Overseen by Nixon’s finance director, Maurice Stans, the effort featured a half-dozen “pickup men” roaming the country gathering checks and cash.

The volume was so great that some donations that had been offered went uncollected, while others came in late. One New Jersey lawmaker showed up in Washington on April 10 with a briefcase filled with $200,000 in $100 bills, money eventually traced to indicted financier Robert L. Vesco; the contributions were treated as if they had been received prior to the deadline.

Overall, Nixon’s 1972 reelection effort raised an estimated $60 million — “the largest amount of money ever spent in a political campaign,” as Stans later bragged.

By 1975, prosecutors reported that 32 individuals and 19 corporations were convicted or had pleaded guilty to violations of campaign-contribution laws, including household names such as Goodyear, Minnesota Mining and Manufacturing, Northrop, American Airlines, Gulf Oil and Phillips Petroleum, records show.

Former Watergate prosecutor Frank Tuerkheimer, who now teaches law at the University of Wisconsin, said he and his colleagues viewed the cases as the beginning of a crackdown on campaign-finance violations.

‘We were wrong’

“Unfortunately, that didn’t happen,” Tuerkheimer said. “We thought it would result in serious enforcement. We were wrong.”

Congress responded to Watergate by amending the Federal Election Campaign Act in 1974, which implemented contribution and spending limits, created the FEC and provided a system of public financing for presidential contests. The Supreme Court soon struck down the spending limits and other restrictions on free-speech grounds in Buckley v. Valeo.

But donation limits and public financing remained, and, for a time, money seemed to play a smaller role in national politics. In 1984, President Ronald Reagan ran for reelection without holding a single campaign fundraiser because he and Democratic challenger Walter Mondale each accepted $40 million in public funds.

The next crack in the wall constructed by reformers came in the 1990s, after a series of FEC rulings led to the rise of unlimited “soft money” donations to parties, an atmosphere that spurred several major financing scandals during Bill Clinton’s presidency. Reformers pushed back again in 2002 with a major campaign finance law sponsored by Sens. John McCain (R-Ariz.) and Russell Feingold (D-Wis.), which banned unlimited donations to parties, imposed new restrictions on ads and attempted to limit the impact of self-funding millionaire candidates.

Many of the McCain-Feingold provisions, however, were struck down in a series of decisions culminating in the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission , which jettisoned a long-standing ban on corporate and union spending on elections. The court ruled 5 to 4 that corporations had the same rights as people when it comes to political speech, upending restrictions on election spending by businesses that stretched back a century.

‘Brought back to life’

The rulings have led to a proliferation of super PACs and other groups and have made it easier for wealthy individuals to spend unlimited money on politics.

“The pieces that created the Watergate scandal — secret money, unlimited donations — have been brought back to life by the Citizens United decision,” argues longtime activist Fred Wertheimer, who helped draft many of the reforms put in place in the 1970s. “The Supreme Court’s idea that you can let all this money into the system without leading to corruption is absurd.”

The long-running debate has been complicated by shifting politics and allegiances. Those in favor of more restrictions on campaign spending now tend to be Democrats, who have been pushing unsuccessfully to enact new disclosure laws for secretive nonprofits and other reforms. Leading Republicans, meanwhile, have adopted a no-regulation posture: Senate Minority Leader Mitch McConnell (Ky.) said last week that Obama’s push for broader disclosures amounted to a “Nixonian” attempt to intimidate conservatives.

But 40 years ago, the lines were scrambled, and many proponents of fewer restrictions came from the left. Joel M. Gora, now a professor at Brooklyn Law School, worked with the American Civil Liberties Union to help advocacy groups resist donor disclosure requirements and was on the legal team that rolled back many restrictions in Buckley.

Gora views Citizens United and other anti-regulation decisions as victories for free speech and says that many regulations are part of an “incumbent protection racket” aimed at quashing dissent. One of the plaintiffs in Buckley was Eugene McCarthy, whose insurgent Democratic presidential bid in 1968 was heavily funded by six-figure donations from antiwar donors.

“These laws are restricting outsiders, whether liberal or left-wing outsiders or conservative and right-wing outsiders,” Gora said. “The difference between the Adelsons of today and the people who wanted to support Gene McCarthy is really just a matter of the amount.”

 

Research editor Alice Crites contributed to this report.

© The Washington Post Company

Los Angeles Times: Justices may take up Montana campaign finance case addressing two-track system

Wednesday, June 13th, 2012
Citizens United and an appeals court ruling created a two-track campaign funding system favoring the wealthy. Now the Supreme Court is being asked to hear a Montana case to address some of the issues.

Los Angeles Times

When the Supreme Court ruled that corporations had the right to political free speech, it set loose a tidal wave of campaign money that helped elect a new Congress in 2010 and is now reshaping the presidential race.

But the impact of the Citizens United decision has been as surprising and controversial as the ruling itself. Although the high court’s 5-4 decision is best known for saying that corporations may spend freely on campaign ads, the gusher of money pouring into this year’s campaigns has mostly not involved corporate funds. And some of the practices that critics of the decision decry actually stem from a separate case decided by a U.S. Court of Appeals after the Citizens United ruling.

The rise of “super PACs,” which may raise and spend unlimited amounts so long as they do so independently of a candidate, has allowed close aides to candidates to set up supposedly independent committees that have raised huge amounts, primarily from wealthy individuals. The PACs have spent most of their money on negative ads attacking the opposition. That unlimited fundraising was set in motion by Citizens United, but came to full flower after the subsequent Court of Appeals decision.

By design or happenstance, a two-track campaign funding system has been created: One features small donors and strict regulation; the other exists for the very wealthy, who are largely freed from regulation.

Exasperated defenders of the campaign funding laws see the Citizens United decision as a historic blunder that has all but destroyed not just the 1940s limits on campaign spending by corporations and unions, but the post-Watergate reforms as well. This week, which marks the 40th anniversary of the Watergate break-in, they are asking the justices to reconsider the Citizens United ruling by taking up a case from Montana that raises some of the same issues.

Fred Wertheimer, a champion of the campaign funding laws, says the Citizens United decision has “fundamentally undermined our democracy and is taking the nation back to the system of ‘legalized bribery’ that existed in the robber baron and Watergate eras.”

The Supreme Court meets behind closed doors Thursday to discuss the Montana case. But the five justices who supported Citizens United, led by Justice Anthony M. Kennedy, are not likely to agree with the critics. They believe the 1st Amendment fully protects independent spending on campaigns and that more public speech and debate on politics is a plus, not a minus.

But they may be concerned over how political spending has shifted away from candidates and political parties and toward new outside groups.

Before 2010, political action committees were common. They allowed like-minded people — including a company’s employees — to contribute as much as $5,000 each to spend on candidates or campaigns. But in March of 2010, two months after the Citizens United ruling, the contribution lid was lifted.

The U.S. Court of Appeals in Washington, citing the 5-4 opinion, reasoned that since the 1st Amendment guaranteed the right to unrestricted “independent” spending on politics, PACs should have the right to collect unlimited sums, so long as they too were independent.

Thus, the parallel system was born.

Congress had set limits on individual contributions after the Watergate scandal, and they remain in effect today. A person who wants to contribute to the campaigns of President Obama or Mitt Romney, his Republican challenger, may give no more than $5,000 this election cycle. But those who have a million dollars to spend can send their money to a super PAC supporting Obama or Romney. Restore Our Future, a super PAC supporting Romney, has at least 16 donors who have given more than $1 million.

“The real impact of Citizens United,” said Columbia University law professor Richard Briffault, has been to legalize “the unlimited use of private wealth in elections…. You haven’t seen nearly as much business or corporate money as people expected. Most corporations are not eager to be involved in an obvious ways.”

Super PACs must disclose their donors, but those who wish to maintain their anonymity can do so through the not-for-profit groups and trade associations that do not disclose their donors. “More than $120 million in anonymous funds was spent to influence the 2010 elections,” the Campaign Legal Center reported. That number is expected to be far higher in 2012, the group said.

Most companies that have given directly from their corporate treasuries to super PACs are privately held.

The Citizens United issue returned to the high court because of an unusual rebellion in the West.

The Montana Supreme Court refused to strike down its state ban on election spending by corporations. Its judges cited Montana’s history of “copper kings” who bribed legislators.

Indiana attorney James Bopp, who started the Citizens United case, appealed and urged the justices to straighten out the recalcitrant state judges. Defenders of campaign funding laws, including Sen. John McCain, launched their own attack on what they say are errors and “faulty assumptions” in the Citizens United opinion.

Although the high court turns down 99% of appeals, no one expects the Montana appeal to be denied.

The justices could write a summary opinion this month explaining why Citizens United was right — or hear the case in the fall and reconsider whether indeed a mistake was made.

 

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

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.

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

Sunday, February 12th, 2012

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

Fox News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Romney reportedly has sanctioned the same kind of interaction.

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

Thursday, February 2nd, 2012

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

LA Times

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

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

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

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

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

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

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

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

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

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

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

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

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

Chesapeake did not immediately respond to a request for comment.

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

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

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

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

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

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

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

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

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

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

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