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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

Salon: Super PAC spending is about to explode

Tuesday, October 9th, 2012

Outside groups have already poured half a billion dollars into the 2012 elections, and they’re just getting started

Salon

Things have taken a turn for the worse for Democrats in recent days — and just as the campaign enters what could be described as the super PAC death zone. Even though we’ve already seen at least $517 million spent by outside groups, almost all of it on attack ads, during this election cycle so far — more than every other cycle since 1990 at similar points combined  — the wave of outside money about to crash down on the race between now and election day could add up to double what’s already been spent.

For 10 of the past 11 election cycles, about half of the total outside money spent during the entire campaign came during the month preceding the election, according to data from the Center for Responsive Politics. In 2010, the first election following the Supreme Court’s Citizens United decision, 56 percent of the total spent that cycle came in last 30 days alone. The only exception was 2008, when a still considerable 40 percent of the total was spent in October and early November. If that past is precedent, the next month could see another $400-570 million spent, easily pushing outside spending over the $1 billion threshold.

“In a cycle where we’ve already blown away the totals for how much is being spent outside of the campaigns themselves and the parties before that time, then it’s reasonable to expect that — who knows how much? — more will come this cycle,” Bob Biersack, a senior fellow at the Center for Responsive Politics told Salon. Because of insufficient disclosure requirements, Biersack said it’s very hard to predict how much that might be. “It’s a lot harder to look forward and anticipate with these kind of activities than it is with campaigns.”

In 2010, outside groups made huge last-minute ad buys, the largest of which came from the Karl Rove-backed American Crossroads groups, which together pumped $50 million into competitive House races. That announcement didn’t come until October 13. And with Romney’s campaign suddenly ascendant after a strong debate performance last week, it’s possible donors who had been on the sidelines will suddenly decide to pony up. Democrats in the House fear their surprisingly strong positions in over 30 races could be overrun practically overnight by big, late super PAC buys.

Another new phenomenon this year is a sharp uptick in spending from groups that don’t have to disclose their donors , like 501(c)4 social welfare organizations and 501(c)6 trade organizations, like the U.S. Chamber of Commerce. So far this year, even before the final onslaught, these groups have spent more than all outside groups in 2010 combined, according to the CRP data. A court ruling in a case brought by Rep. Chris Van Hollen would have required disclosure for these groups running ads in a window immediately preceding the election, but an appellate court overturned that decision last month, allowing these groups to keep their donors secret. And not surprisingly, the vast majority of this secret money has come from conservative groups.

Of course, there’s a possibility that all this spending so late will have little impact after the deluge of political ads voters in key states have already withstood. Most consultants, political scientists, and psychologists agree that negative political ads are effective, but there may be a limit, which this election cycle could test unlike ever before. In some key media markets, which see as many as three times the number of ads as other markets, negative spots are “popping up on soap operas, game shows and even cable reality programs like Here Comes Honey Boo Boo,” NPR reported of Colorado Springs, Colorado. When voters can’t watch Honey Boo Boo dressing up Glitz Pig without being told why Barack Obama is dangerous for America, maybe they’ll ignore the message, but that remains to be seen. For now, donors are willing bet millions of dollars that the ads will do something more than annoy views.

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.

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