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Super PACs, other groups, fuel four-fold spending increase in 2012 presidential race

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Outside groups, including super PACs and nonprofit organizations, have spent almost four times more on the 2012 presidential campaign than comparable organizations spent at the same point in the 2008 cycle, an analysis of Federal Election Commission filings show.

Four years ago in late March, when Republicans had already wrapped up a wide-open battle for their party's nomination and Democrats were still engaged in a battle that would go on for months, spending on the presidential campaign by independent groups stood just shy of $22 million. Today, outside spending on the race for the White House has already topped $82 million -- this in a year when only one party's presidential nomination is in doubt.

It may be the most dramatic evidence so far of the impact of the courts' rollback of campaign finance regulations.

The 2012 Republican nomination contest is the first presidential campaign to be conducted after a series of court decisions unraveled the rules governing fundraising by outside groups. Some 104 organizations, including labor groups, nonprofits and corporations, have emerged as the heavyweight spenders of this primary and caucus season. Unlike in past presidential election cycles, they are able to collect money in unlimited amounts and to use it to advocate explicitly for or against a candidate for the White House in television and radio advertisements, phone banks and get-out-the-vote efforts.

Sunlight's just-relaunched Follow the Unlimited Money tracker shows spending by all outside groups, including super PACs and the shadowy non-profits organized under section 501 of the U.S. tax code, which permits them to keep their donors secret. 

 

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In the 2008 election cycle, more than 250 outside groups campaigning for or against presidential candidates filed reports with the FEC. Under the rules in place at the time, those organizations had to make a choice: either stick to strict limits on how much political money they could accept from any donor, or limit themselves to issue ads that can mention a federal candidate, but not advocate his or her election or defeat. Total spending by outside groups in the 2008 presidential race ended up at $182 million, according the records filed with the FEC.

This year, after the Supreme Court's Citizens United ruling and subsequent decisions by a lower court and the FEC which loosened restrictions on campaign contributions by corporations, non-profits and unions, spending by outside groups in the 2012 campaign is on pace to surpass that amount significantly, possibly reaching over $500 million.

“The Supreme Court's 2010 decision in Citizens United dramatically increased the universe of potential spenders,” said Paul Ryan, campaign finance expert at the Campaign Legal Center said. 

 

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The figures tell the tale: By the end of the 2008 campaign, outside organizations had made $12.5 million in independent expenditures either supporting or opposing Barack Obama. Just a few months into this race, super PACs -- which didn't exist in 2008 -- already have shelled out more than half that amount -- $6.4 million -- running ads supporting or opposing Mitt Romney, the leading candidate for the Republican nomination. If super PAC spending in support or opposition to Romney continues at these levels, it could reach as high as $20 million.

And thanks to Citizens United, super PACs aren't the only groups that can spend to influence a race: labor unions and corporations can dig into their treasuries to spend money to elect or defeat a candidate.

The elimination of rules that limited the amount donors can give to outside groups only partially explains the explosion in outside spending. In 2008 outside spending may have been dampened by several factors: Obama had a stellar campaign fundraising operaton, and discouraged donors from supporting him through outside groups. On the Republican side, many of the big donors who had given to outside groups that supported the reelection of George W. Bush in 2004 election were wary of McCain’s record on campaign finance reform. And the FEC had cracked down on donors to outside groups after the excesses of the 2004 election, levying hefty fines against organizations like Swift Boat Vets and POWS for Truth and MoveOn.org, and going so far as to contact big donors like George Soros and the BellSouth Corporation, known again as AT&T.

In sharp contrast, this year's election is taking place against the backdrop of the new legal landscape that has legitimized big donations to outside groups, giving donors who want to contribute little reason to worry that they might run afoul of election law. And such big-bucks donations are being openly encouraged by all of the major GOP presidential candidates as well as President Obama.

Now, campaigns have an additional support system to pay for advertising and other political activities. Super PACs have become associated with running negative ads with a vitriolic tone. Experts studying the ad campaigning say that super PACs are not promoting the vision of the candidates they are supporting but are lowering the tone of the campaigns, and driving up the disapproval ratings of the candidates they oppose.

Heavy spending labor groups get their campaign ad tag-team

Labor groups provide a good example of how spending is spiking: In 2008, two leading labor organizations -- AFL-CIO and Service Employees International Union -- spent a combined $8.8 million on various forms of media ad buys. In the current cycle, the two labor giants already have reported spending some $3.8 million through their super PACs alone--a rate of spending that puts them on pace to top $15 million by Election Day. 

Labor could emerge as one of the biggest sources of this year's political spending, according to Michael Franz, co-director of the Wesleyan Media Project, a group that studies campaign ads. News reports have suggested that unions, which have long supported Democratic candidates, may spend as much as $400 million at the federal, state and local level. 

One possible reason for the change in political spending habits: Four years ago, labor unions and corporations were barred from using money from their treasuries to make independent expenditures. They could not use money they collected as dues or made in the course of business to advocate for the election or defeat of candidates. They were not allowed to donate to PACs that paid for ads and other electioneering activities. Instead, they had to run "issue ads" that mentioned federal candidates without explicitly calling for their election or defeat.

Those rules no longer hold. Politically active unions like SEIU and the AFL-CIO have created affiliated PACs that can take unlimited donations from the parent groups’ treasuries or from an individual. American Federation of State, County and Municipal Employees, another labor group, has spent $1 million on independent expenditures directly from their treasury.

It wasn't just unions that labored under such restrictions. The Club for Growth, an organization that often bucks the GOP establishment by supporting primary challengers to the right of incumbent Republicans, operated in part in 2008 through a political nonprofit organized under section 527 of the Internal Revenue Code. Club for Growth's 527, which could raise unlimited money from any source, but could only run so-called "issue" ads about federal candidates, spent $3.8 million on such ads in 2008. Now, through its Super PAC, Club for Growth can can spend unlimited amounts on major ad buys explicitly asking potential voters to cast their ballots for or against specific candidates. Although the Club's PAC has spent only $573,000 so far, it has a total of $5.2 million in the bank. 

New players in 2012 boost spending

In addition to liberating some longtime political givers from political spending restrictions, changes in campaign finance regulations also have given rise to a class of new players. In 2010, the FEC ruled that candidates could coordinate fundraising, but not spending, with super PACs. That led to the rise of presidential super PACs like Restore Our Future, tied to Romney, and Winning Our Future, which supports former House Speaker Newt Gingrich. Both super PACs are supported by donors who have contributed over the years to the candidate they're backing. Restore Our Future has reported spending $36 million in 2012, while Winning Our Future has shelled out $16 million.

Many of these organizations are run by former campaign officials of the candidates. Restore the Future, for example, is run by his former chief-of-staff. “In 2008 this would have raised red flags, if an organization was run by former associates, it would raise questions but now the landscape is wide open,” Franz said.

Other outside groups, like American Crossroads, which supports Republicans, and the Majority PAC, which supports Democratic Senate candidates, are run by former GOP and Democratic party officials.

Because super PACs can accept corporate donations, including those from nonprofit organizations that do not disclose their donors, they enable these groups to “legally launder their money through intermediaries, so as to enjoy the benefit of political influence without the inconvenience of public scrutiny,” Ryan said.