WASHINGTON POST: Supreme Court rulings enable frenzy of campaign spending

October 4, 2010
T.W. Farnam and Dan Eggen

Interest groups are spending five times as much on the 2010 congressional elections as they did on the last midterms, and they are more secretive than ever about where that money is coming from.

The $80 million spent so far by groups outside the Democratic and Republican parties dwarfs the $16 million spent at this point for the 2006 midterms. In that election, the vast majority of money - more than 90 percent - was disclosed along with donors' identities. This year, that figure has fallen to less than half of the total, according to data analyzed by The Washington Post.

The trends amount to a spending frenzy conducted largely in the shadows.

The bulk of the money is being spent by conservatives, who have swamped their Democratic-aligned competition by 7 to 1 in recent weeks. The wave of spending is made possible in part by a series of Supreme Court rulings unleashing the ability of corporations and interest groups to spend money on politics. Conservative operatives also say they are riding the support of donors upset with Democratic policies they perceive as anti-business.

"The outside group spending is primarily being driven by the political climate," said Anthony Corrado, a professor of government at Colby College who studies campaign finance. "Organized groups are looking at great opportunity, and therefore there's great interest to spend money to influence the election. You've got the possibility of a change in the control of Congress."

The increase in conservative spending has come both from established groups and from groups only a few months old. On the left, major labor groups such as the Service Employees International Union have also ratcheted up their expenditures compared with 2006 but are unable to keep up with groups on the right.

One of the biggest spenders nationwide is a little-known Iowa group called the American Future Fund, which has spent $7 million on behalf of Republicans in more than two dozen House and Senate races. Donors for the group's ad campaign have not been disclosed in records the group has filed with the Federal Election Commission.

The group recently entered a previously sleepy race in its home state of Iowa, announcing that it would devote up to $800,000 to campaign against Democratic Rep. Bruce Braley of Waterloo. The campaign kicked off with a commercial alleging that Braley "supports building a mosque at Ground Zero." Braley denies supporting construction of the proposed Islamic cultural center near the World Trade Center site, saying it's a zoning issue for New Yorkers to decide.

The ad, part of a nationwide campaign of similar mosque-themed spots, is the brainchild of Larry McCarthy, a media strategist who gained renown for creating the racially tinged "Willie Horton" commercials against Democratic presidential candidate Michael S. Dukakis in 1988.

"Folks across America should be worried about these anonymous groups that go into an election and try to buy a favorable result," said Braley spokeswoman Caitlin Legacki. "People have no idea where the money came from. It's difficult to take recourse."

Interest groups spending large amounts on the election are prohibited by law from talking to candidates about their strategy.

Ben Lange, Braley's GOP challenger, denies any connection to the American Future Fund's attacks. "We have no interaction with this group," said Cody Brown, spokesman for Lange. "We're not so much concerned with what these outside groups are doing. We want to have an honest, focused debate on the issues."

Fund officials could not be reached to comment.

Flexibility for the GOP

Heightened spending by outside groups has given the Republican Party flexibility in choosing which races to focus on. In West Virginia, the GOP recently spent $1.2 million backing businessman John Raese for the Senate seat long held by Robert C. Byrd, who died in June. The contest had been considered safe for the Democrats, whose candidate, Joe Manchin III, is the state's governor. But Manchin's poll numbers have recently slipped.

While the interest-group money has primarily helped Republicans, Democrats have proved better at raising money for the party itself and for individual candidates. Those donations must, by law, come from individuals and are limited in size. Much of the interest-group spending, by contrast, has been based on large contributions from well-heeled donors and corporations.

The Supreme Court cleared the way for unlimited spending by corporations, unions and other interest groups on election ads in its 5 to 4 decision this year in Citizens United v. Federal Election Commission. Many interest groups are organized as nonprofits, which are not required to disclose their financial backing, helping fuel the increase in secret donors.

The Post analyzed spending numbers that groups are required to report to the FEC, including spending on broadcast ads mentioning a candidate's name within 30 days of a primary and 60 days of the general election. Some expenditures - and donors - are not revealed. Many groups avoid reporting what they spend on attacks by making a subtle distinction, saying their message is focused on candidates' positions on issues instead of the election itself.

One reason Democrats have benefited less from interest-group spending may be the party's - and President Obama's - message against the role of moneyed interests in Washington. And in his 2008 campaign, Obama discouraged such independent interest groups on the left from forming.

Some Democratic groups have lowered their spending on election ads. The Internet-based advocacy group MoveOn.org will spend roughly the same amount it did in the 2006 midterms, said Executive Director Justin Ruben, but will concentrate on organizing supporters instead of trying to compete on the airwaves.

"We can't possibly match this spending dollar for dollar," Ruben said. "Turnout is big in a midterm, and the best way to affect turnout is person-to-person contact. These groups have a few millionaires, but they can't talk to that many people."

Organized as nonprofits

Conservative groups such as Americans for Job Security and Crossroads GPS, an arm of the American Crossroads group, co-founded by former Bush administration adviser Karl Rove, are organized as nonprofits and don't have to disclose who is giving them money. Some liberal groups, such as the League of Conservation Voters, are also nonprofits but raise money on a smaller scale.

One major player this year is the 60 Plus Association, an Alexandria-based group that bills itself as the conservative alternative to the AARP seniors group. In 2008, the group reported less than $2 million in revenue, most of it from direct-mail contributions.

This year the group has spent $7 million on election-related ads, according to its FEC reports. It also funded a $9 million campaign against Obama's health-care overhaul in 2009.

The group is somewhat renowned for its take-no-prisoners approach to advertising, alleging in recent spots that multiple Democrats have "betrayed seniors." The journalistic research Web site PolitiFact.com called the ads "highly misleading" in describing the funding outlook for Medicare.

But 60 Plus spokesman Tom Kise defended the ads and said the group's rapidly expanded budget was due to widespread opposition to Democratic policies.

"We've never had this kind of threat to seniors before," Kise said. "We are in unprecedented times, which calls for unprecedented measures."

In earlier years, 60 Plus received grants from foundations connected to Pfizer and other drugmakers, according to AARP. Kise declined to provide details about the group's donors but said it is not taking money from the pharmaceutical industry.