Outside Spending Defines Elections

Posted November 5, 2012 at 6:03pm

Campaign spending by unrestricted super PACs and secretive tax-exempt groups topped $1 billion in this election cycle, close to four times the amount spent by such organizations in the last presidential race.

The spending surge by outside groups shifted the election’s power center away from candidates and political parties. The election’s total cost will exceed $6 billion, according to the Center for Responsive Politics, which pegged outside spending at more than $1 billion as of Nov. 5.

Super PACs were the biggest outside spenders, spending just under $630 million by the eve of Election Day, CRP data shows. The groups grew out of the Supreme Court’s 2010 Citizens United v. Federal Election Commission ruling, which lifted restrictions on independent corporate and union spending, as well as a lower-court case known as SpeechNow.org v. FEC.

But tax-exempt organizations such as 501(c)(4) social welfare groups and trade associations, which do not disclose their donors, also spent hundreds of millions on the campaign. Along with corporations, unions and individuals, politically active nonprofits spent $396.6 million. Tax-exempt groups spent at least an additional $200 million or more targeting candidates with “issue” ads that fall outside public reporting rules.

Conservative groups dominated non-party group spending, accounting for about 69 percent of it, compared with 28 percent coming from liberal groups, according to the CRP. Outside groups were particularly important to GOP presidential nominee Mitt Romney, whose campaign raised $389 million to President Barack Obama’s $632.2 million haul.

The pro-Romney super PAC Restore Our Future invested $142.6 million in the race, outspending all its rivals. The leading Republican outside organization, super PAC American Crossroads and its affiliated nonprofit, Crossroads GPS — masterminded by GOP operative Karl Rove — set out to spend $250 million in the election, and as of October said they were on track to meet that goal. Also spending tens of millions for Republicans were tax-exempt groups including Americans for Prosperity (which received funding from the billionaire industrialists Charles and David Koch) and the U.S. Chamber of Commerce.

Despite conservatives’ outside money edge, super PACs backing Democrats accelerated their fundraising in the election’s final weeks. Having condemned unrestricted money during the 2010 campaign, Democrats pivoted to embrace super PACs this year. With the help of labor unions, which donated upward of $20 million to help Democrats, the top three super PACs backing Democrats — Priorities USA Action, Majority PAC and House Majority PAC — ranked among the six top-spending super PACs.

As super PACs and politically active nonprofits took over the airwaves, the relative influence of the two major political parties waned. The parties continued to raise record sums, with $1.2 billion in receipts as of mid-October, according to the Campaign Finance Institute. The parties remain crucial because, unlike super PACs, they may coordinate with candidates and because of their roles in turning out voters, experts say.

But the parties’ relative share of the ever-growing campaign finance pie is getting smaller.

“There’s no question that in relative terms, those non-party numbers are going up at a much faster rate than the party numbers,” said Michael Malbin, executive director of the Campaign Finance Institute. “I think that it will mean that party-like spending will go into more amorphous networks, somewhat less disclosed, with many more different competing channels.”

In some hard-fought House and Senate contests, outside groups far outspent the parties. In the Virginia Senate race between former Govs. Tim Kaine (D) and George Allen (R), non-party groups spent close to $37 million by Nov. 5, according to the CFI. That’s more than double the $14.4 million the two major parties spent and more than the $30 million the two candidates spent combined.

In Florida’s 10th district contest between Republican Rep. Daniel Webster and his Democratic challenger, former Orlando police chief Val Demings, super PACs and other outside groups spent $4.2 million, more than the $4 million spent by the parties and candidates combined, according to the CFI.

The unlimited and often undisclosed campaign money overwhelmed voters in swing states with round-the-clock ads, and it prompted some candidates to call for a third-party spending truce.

In Massachusetts, GOP Sen. Scott Brown and Democratic challenger Elizabeth Warren pledged to pay a “penalty” to charity for every outside ad bought to help them.

The spike in undisclosed money prompted numerous complaints from watchdogs that such groups are violating election and tax laws. While conservatives hailed the wide-open spending rules as a victory for free speech, the unrestrained campaign spending is sure to fuel a fresh round of proposals to overhaul the system, from disclosure legislation to tighter tax regulations.

“Any time the regulated entities become less powerful, and the unregulated entities are stronger, it’s a sea change,” said Lisa Gilbert, director of Public Citizens’ Congress Watch.