Valdosta Daily Times

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November 1, 2012

Billionaires, shadowy groups fuel pricey election

WASHINGTON — Billionaires, anonymous donors and shadowy outside groups funneled enormous amounts of money into this year’s federal elections, as the cost of the presidential campaign surged past $2 billion and is expected to set a record. Despite grumbling among watchdog groups and even candidates themselves, don’t expect serious changes any time soon.

After a series of high-profile federal court rulings, the U.S. government’s newly relaxed campaign-finance system allowed for unlimited contributions from corporations, labor groups and others; television advertisements from nonprofit groups that concealed who paid for them and the proliferation of at least 773 super political action committees.

Republican presidential nominee Mitt Romney experienced both extremes from super PACs: Some attacked him mercilessly during the primary elections and others have supported Romney’s campaign by purchasing ads assailing President Barack Obama.

The money race was as important as ever this election. Super PACs supporting Obama and Romney spent more than $500 million in ads, helping Romney especially in battleground states. Nonprofit “social welfare” organizations have spent hundreds of millions more on so-called issue ads, but they are governed by tax laws and don’t have to disclose their donors.

Each presidential campaign raised more than $800 million, a staggering sum. Obama had shattered records four years ago when his fundraising apparatus pulled in $750 million. That amount raised by the presidential candidates is dwarfed by amounts being spent collectively on congressional campaigns.

“The general election story here will turn out to be the key role that super PACs have played in contested Senate races and some congressional races,” said Trevor Potter, a former chair of the Federal Election Commission and an advocate of campaign-finance reform. “The amount of money is massive.”

Proponents of tougher limits on money in politics said they worry about the potential for corruption, but they aren’t optimistic about changes to the system. The Disclose Act in Congress, which would have forced campaigns to identify donors who gave more than $10,000, failed in the Senate.

The relaxed spending rules aren’t upsetting everyone, including advocates who said unlimited contributions amount to political speech protected by the First Amendment. Some said rules requiring campaigns to identify donors violate a person’s right to anonymous speech.

Whatever the case, the new rules have effectively allowed some donors to remain anonymous, such as in the case of a super PAC helping conservative candidates. FreedomWorks for America reported more than $5.2 million in donations during the first half of October — about 90 percent of the group’s fundraising haul — from an apparent shell company in Knoxville, Tenn.

The money came from a company, Specialty Group Inc., established five days before it made its first contributions; that money has paid for more than $1.5 million in last-minute ad buys. A FreedomWorks spokeswoman declined to say whether its campaign finance report would be amended, saying the group doesn’t comment on its donors.

Yet FreedomWorks isn’t alone on its spending spree, particularly at the last minute as Election Day approaches. More than $1 billion has been spent this election cycle on independent expenditures from outside groups, and nearly $900 million is spent opposing candidates, according to figures compiled by the nonprofit group Sunlight Foundation.

In Nevada, for instance, those groups have dumped spent more than $5 million on just one House race. Most of that cash has gone toward opposing the Democratic candidate, Nevada state Sen. Steven Horsford. It came in part from Crossroads GPS, the nonprofit arm of the American Crossroads super PAC, which doesn’t have to reveal its donors.

At the presidential level, both Obama and Romney have spent considerable time at fundraising events courting wealthy donors. Romney last month lamented the time he spent on fundraising, rather than speaking to larger groups of voters.

Obama and Romney have raised considerable money from small donors, too, especially the president’s legion of more than 4 million donors. Still, individual donations of $20 or even $50 are dwarfed by money from Las Vegas casino mogul Sheldon Adelson — the top super PAC donor this year — who contributed more than $40 million to Republican super PACs, including those backing Romney and former candidate and House Speaker Newt Gingrich. For Obama, high-profile figures like Hollywood producer Jeffrey Katzenberg have donated millions of dollars to super PACs supporting him.

Federal rules require timely disclosure for super PACs, but determining who’s behind big donations isn’t always easy. In summer 2011, a fledgling company dissolved shortly after making a $1 million contribution to a super PAC supporting Romney. Records showed that the company, established and closed over a four-month period, was formed by Ed Conard, a Romney supporter who once worked with the former Massachusetts governor at the private equity firm Bain Capital.

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