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October 31, 2014

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October 28, 2014

Republicans Join Attacks on Big Money | Rules of the Game

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Sullivan is calling for an end to outside spending. (Tom Williams/CQ Roll Call File Photo)

The Senate candidate warned that voters’ voices are being “drowned out” by “third-party special interest groups with unlimited spending capability,” and called on his opponent to help him bar big outside spenders from the race.

Another Democrat parroting Senate Majority Leader Harry Reid’s attacks on secret campaign spending? Actually, the Senate hopeful railing against political money was Republican Dan Sullivan of Alaska, who sought — without success — to convince incumbent Democrat Mark Begich to sign a pledge to stop the outside money flooding in.

Sullivan is one of more than half a dozen Republican congressional candidates who have made assaults on big money in politics an important campaign theme. Until now, the issue was almost exclusively a Democratic talking point.

It’s a curious twist that reflects growing voter focus on political money, which has drawn news coverage as midterm spending approaches a record $4 billion, and fresh GOP interest in populist anti-corruption messages that resonate with the tea party.

Leading the way has been none other than GOP Senate Leader Mitch McConnell, of Kentucky, who asserted that “no one in the history of American politics has ever won or lost a campaign on the subject of campaign finance reform.”

McConnell’s campaign has leveled a long list money- and ethics-related attacks against Democrat Alison Lundergan Grimes. These include her invitation to “Obama billionaire” Warren Buffett to join a campaign fundraising event via conference call; her attendance at a “luxurious fundraiser” with Democratic Senator Elizabeth Warren of Massachusetts at the home of a controversial Kentucky businessman, and her alleged “sweetheart deal” to rent a campaign bus at less than market value.

“By his actions, he is recognizing that money in politics is a powerful issue to win elections,” said David Donnelly, president of Every Voice, an advocacy group with an affiliated super PAC that promotes political money limits.

Democrats have rejected these attacks and hammered on unrestricted secret GOP spending, as they did in 2010, with a special focus this time on the billionaire industrialists Charles and David Koch. In the previous midterm, voters collectively shrugged and handed the House majority to Republicans. In this election, polls suggest voters have trouble even identifying the Koch brothers.

But Republicans are now leveling their own assaults on billionaires, special interests and lobbyists. In addition to Sullivan, Republican House candidates Mark Greenberg, who’s challenging incumbent Elizabeth Esty in Connecticut’s 5th District, and Evan Jenkins, running against Rep. Nick J. Rahall II in West Virginia’s 3rd District, have called on their Democratic opponents to sign a “people’s pledge” to discourage outside spending. Not surprisingly, given the success of Democratic super PACs in these midterms, Esty, Rahall and other Democrats presented with such pledges have largely declined.

Republicans have leveled their attacks in fundraising appeals, ads and during debates. In North Carolina, Republican Thom Tillis charged in target=”_blank”>an ad that Senate Democrat Kay Hagan missed an Armed Services Committee hearing “while ISIS grew” because “she prioritized a cocktail party to benefit her campaign.”

In Iowa’s Senate contest, Republican Joni Ernst accused Democratic Rep. Bruce Braley of “being supported by [a] California billionaire extreme environmentalist who opposes the Keystone pipeline,” a reference to billionaire environmentalist Tom Steyer and his multi-million dollar super PAC, NextGen Climate Action.

The Republican-friendly super PAC American Crossroads also attacked Braley over Steyer’s high-dollar backing. In one target=”_blank”>Crossroads ad, spiced up with images of hundred-dollar bills, a narrator intones: “Bruce Braley; he’s on the side of billionaire special interests, not Iowa workers.”

Republican House hopeful Richard Tisei charged in a recent debate that 6th district incumbent Democrat Seth Moulton has “raised more money in New York City on Wall Street than he has in the congressional district.” In New York’s 18th district, Republican Nan Hayworth, who is seeking to recapture her House seat from Democrat Sean Patrick Maloney, charged that biomass executive Jim Taylor has “lined the congressman’s pockets” with at least $100,000 in bundled contributions.

Even GOP Sen. Ted Cruz, the conservative Texan who’s railed against campaign finance limits almost as vigorously as McConnell, recently proposed in his list of GOP priorities for 2015 “a lifetime ban on members of Congress becoming lobbyists” as one way to “stop the Washington corruption.”

Similarly, Republican National Committee Chairman Reince Priebus suggested in this month in his “Principles for American Renewal” that “bureaucrats, lobbyists and out-of-touch politicians need to get out of the way, and give American workers and businesses the freedom to create jobs.”

“They know that the role of money in politics is part and parcel of why Washington isn’t working,” said Donnelly, of the GOP messaging. Donnelly’s Every Voice super PAC, and another even better-funded super PAC dubbed MayDay PAC, are spending their own unrestricted money to back candidates that support campaign restrictions, helping move the issue front and center.

It’s an open question whether attacks on big money will resonate with voters in the end. The only Republican so far to make the issue central to his campaign — Senate hopeful Jim Rubens, in New Hampshire — lost his primary bid to former Massachusetts Sen. Scott Brown, despite backing from MayDay PAC, which remains more than $1 million shy of its $12 million fundraising goal.

With few exceptions, Republicans remain as staunchly opposed as ever to campaign finance limits. Still, Republicans are developing an appetite for big money as a campaign issue. As Tillis put it in a recent fundraising appeal: “It looks like money may be the deciding factor in this campaign, just as the pundits predicted.”

Roll Call Election Map: Race Ratings for Every Seat

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October 14, 2014

FEC Rulemakings Roil Agency, Critics | Rules of the Game

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(Bill Clark/CQ Roll Call File Photo)

Is the Federal Election Commission a dysfunctional agency deaf to voters fed up with loophole-riddled campaign finance rules? Or is it a newly revived organization making unprecedented moves to invite a wide-ranging public debate over its regulations?

The answer may be both. In a fit of productivity on Oct. 9, the FEC managed to outrage its critics, thrill political party leaders, send election lawyers scrambling and break out once again into public bickering. It was an abrupt departure from the months and even years of partisan deadlock that have rendered the FEC incapable of settling even the most routine enforcement disputes. Full story

September 30, 2014

Who Really Speaks for Veterans? | Rules of the Game

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VoteVets.org, led by Chairman Jon Soltz, has set out to spend some $7 million to help Democrats in midterm elections (CQ Roll Call File Photo).

Veterans organizations with overtly partisan messages and agendas have spent millions promoting candidates in tight Senate races in this election cycle, prompting criticism from veterans and established vet groups on both sides of the aisle.

Concerned Veterans for America, a conservative advocacy group with ties to the billionaire industrialists Charles and David Koch, has spent more than $2 million blasting Democratic Senate candidates, Center for Responsive Politics data show, largely for failing to fix problems at the Department of Veterans Affairs. The veterans group has both stoked and capitalized on outrage over the VA scandal involving long wait times for medical care and the agency’s cover-up of those delays.

On the liberal side, the progressive group VoteVets.org has set out to spend some $7 million to help Democrats in the midterms, according to its organizers. The VoteVets political action committee has delivered more than $1 million to candidates both in direct donations and in bundled contributions since its founding in 2006.

The explosion in veteran-focused campaign spending alarms some veterans and longtime vets organizations. Membership-focused veterans associations, such as the American Legion, have long enjoyed special tax protections coupled with strict limits on their political activities. Some vets associated with the “old guard” worry politics will swallow the best interests of veterans.

“Most mainstream veterans groups are required to be nonpartisan, and it concerns me that we do have groups on both extremes that are very partisan in their approach and very calculating in what they want to accomplish,” said Joe Violante, national legislative director of Disabled American Veterans, established in 1920 and congressionally chartered in 1932.

Violante voiced particular concern over attacks by Concerned Veterans for America against the VA. The conservative group has challenged VA funding increases and supports partially privatizing veterans’ health care. Such steps could make fewer veterans eligible for more limited services, Violante warned.

Concerned Veterans of America is run by and champions veterans, countered Dan Caldwell, the group’s issues and campaign manager, a veteran himself. The group fills a void in the veterans’ community, he said, by advocating VA changes, deficit reduction and national security. Caldwell acknowledged the VA scandal “changed the whole dynamic of our organization,” but denied that the group’s high-dollar attacks on such Democrats as North Carolina incumbent Kay Hagan and Bruce Braley in Iowa for failing to help veterans are political.

“These ads we consider issue advocacy,” Caldwell said. “They are based out of our VA reform efforts. We are not just a fly-by-night 501(c)(4) trying to use the VA scandal as an election-year issue. We have a long history on these issues. We have a real agenda on VA reform.”

But Concerned Veterans for America’s frequent attacks on the Affordable Care Act align it squarely with other Koch-affiliated groups. Freedom Partners Chamber of Commerce, a trade association at the heart of the Koch donor network, gave $5.2 million to Concerned Veterans for America, 2012 tax records show.

Freedom Partners also purchased extensive airtime in Iowa and North Carolina earlier this summer, according to the Sunlight Foundation — valuable spots that were eventually used by Concerned Veterans for America. Caldwell said his group paid for the spots, and Freedom Partners had simply canceled its reservations, which freed up ad space.

VoteVets Chairman Jon Soltz rejected any comparison between Concerned Veterans for America and his organization, which claims 450,000 members and was founded in 2006.

“I’m hesitant to say they’re anywhere equivalent to what we’ve built over eight years,” Soltz said. But VoteVets.org has also taken heat for its campaign advertising, recently drawing public criticism from a prominent Kentucky veteran over an ad assailing Senate Minority Leader Mitch McConnell for failing to back a bill that would have boosted VA funding by $21 billion. The ad was part of a $600,000 ad campaign against McConnell by VoteVets, which operates both a PAC and a social welfare arm known as VoteVets Action Fund.

McConnell “has been a vocal advocate about the urgent need for reform at the VA and was instrumental in helping ensure Senate passage of the important bipartisan veterans bill that was signed into law last month,” declared Karl Kaelin, vice chairman of a Kentucky committee of the Veterans of Foreign Wars, in a statement released by the McConnell campaign.

McConnell’s camp also dismissed VoteVets as a front “funded by environmental activists.” The VoteVets Action Fund has received more than $6 million in grants from a long list of environmental, labor and other progressive groups since 2010, according to the CRP. The group has also doled out grants to such Democrat-friendly allies as the American Bridge 21st Century Foundation and America Votes, an umbrella group for progressive activists, according to IRS records.

“We’re progressive, period,” acknowledged Soltz. “There are a lot of veterans out there who don’t feel veterans organizations represent them.”

Veterans’ issues have always resonated powerfully with voters, and that is particularly true in this election. The number of veteran-themed ads, by both outside organizations and candidates themselves, hit 34,000 nationwide as of the end of August, according to Kantar Media Ad Intelligence.

“Veterans are great messengers, because they don’t look political,” said Soltz. “And these are mom-and-apple pie issues: taking care of our veterans.”

But as veterans’ organizations become increasingly politicized, their credibility may be at risk.

 Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

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September 18, 2014

McDonnell Appeal Begs Question: What Is Corruption?

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McDonnell is appealing his conviction of 11 counts of bribery, conspiracy and extortion. (Bill Clark/CQ Roll Call File Photo)

As Bob McDonnell’s lawyers gear up to appeal the former Virginia Governor’s conviction on 11 counts of bribery, conspiracy and extortion, federal prosecutors, legal experts and elected officials around the country are all watching closely.

The McDonnell case hinges on a question that goes to the heart of the national campaign finance debate, namely: What is corruption? Must it involve out-and-out bribery — the deliberate exchange of money or favors for official acts? Or can corruption take the form of ingratiation, influence and distortions of public policy?

McDonnell’s lawyers argued during his dramatic public trial that businessman Jonnie Williams Sr. received nothing beyond routine courtesies in exchange for his $177,000 in gifts and loans to the McDonnells. Some experts argue that McDonnell has strong grounds for an appeal, and that his indictment effectively criminalizes politics and constituent service.

But a Virginia jury lost no time indicting McDonnell on 11 criminal counts and his wife, Maureen, on nine, after hearing descriptions of the designer clothes, $6,500 engraved Rolex watch, lakeside vacation, free golf outings, wedding catering and a low-interest loan that the McDonnells received from Williams. Particularly damning was an email McDonnell sent to an aide to discuss Anatabloc, the dietary supplement Williams sought to promote, just six minutes after McDonnell spoke with Williams about a $50,000 loan.

McDonnell’s official appeal must wait until his sentencing in January. The appeals process is likely to drag on for months as it wends through the courts — possibly reaching as high as the Supreme Court. Though the McDonnells were indicted under ethics and not campaign finance laws, the question of what constitutes corruption cuts across both sets of rules. And the Supreme Court has defined campaign finance corruption increasingly narrowly.

In April, McCutcheon v. Federal Election Commission struck the aggregate campaign contribution limits, a court plurality concluded that election laws may only target ‘quid pro quo’ corruption in the form of official acts exchanged for money.

But in a strongly-worded dissent, Justice Stephen Breyer and three other justices objected that McCutcheon flies in the face of previous court rulings, including the high court’s 2002 McConnell v. FEC ruling. That ruling, which upheld the soft money ban enacted with the McCain-Feingold law, concluded that Congress had an interest in preventing more than “simple cash-for-votes corruption,” wrote Breyer. He quoted that 2002 ruling as follows:

“Just as troubling to a functioning democracy as classic quid pro quo corruption is the danger that officeholders will decide issues not on the merits or the desires of their constituencies, but according to the wishes of those who have made large financial contributions valued by the officeholder.”

Indeed, many on Capitol Hill – mostly Democrats but some Republicans, too – complain that the pressure to constantly raise money has contributed to partisanship, gridlock and a sense of disconnect from average constituents.

“It is a very rare exception where there is a quid pro quo – a donation for an action,” Sen. Christopher S. Murphy, D-Conn., recently told CQ Roll Call. “But when you are spending a lot of time with people who believe a certain set of things, it’s hard not to be influenced by that viewpoint.”

Colorado Democrat Michael Bennet sounded a similar note during debate last week on the constitutional amendment that he introduced with Sen. Tom Udall, D-N.M. Turned back on a procedural vote, the amendment would have authorized Congress and the states to limit political spending, contrary to prior Supreme Court rulings.

“The court imagined a world where people with bags of money are wandering around Capitol Hill and only then could you regulate it, trying to get people to do something for them,” Bennet said on the Senate floor. “Ninety-nine percent [of] what happens around here is people trying to keep you from doing something, trying to keep things the same. Trying to keep the incumbent interests embedded in our tax code, in our regulatory code, in our statute book. The Supreme Court was silent completely on that corruption, and I would argue that is at the core of our dysfunction as a Congress.”

Republicans denounced the proposed amendment as a violation of the First Amendment, and as an election year ploy by Democrats, who have railed against large, unrestricted contributions throughout the midterm.

Such anti-big money attacks have failed to resonate much in the past, partly because voters tend to regard both parties as equally reliant on special interests. But there are signs that voters are beginning to pay attention. Advocates of the constitutional amendment delivered thousands of petitions to Capitol Hill and staged events at congressional offices around the country last week.

Virginia voters, too, are taking notice. State legislators may or may not toughen up Virginia’s historically lax ethics rules in response to the McDonnell indictments. (Virginia also imposes no limits on campaign contributions.)

But the scandal has reportedly sent a chill through the legislature, prompting state officials to think twice before taking the lavish gifts that had become routine to doing business in the Old Dominion. Judges and prosecutors will continue to haggle over what constitutes corruption. But jurors — and voters — have a tendency to know it when they see it.

Roll Call Election Map: Race Ratings for Every Seat

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September 8, 2014

Constitutional Amendment Debate Roils ACLU | Rules of the Game

The emotional debate over free speech versus free political spending, which erupted onto the Senate floor this week, exposes a deep rift on Capitol Hill and at the nation’s leading civil rights group, the American Civil Liberties Union.

“There is a very, very significant divide within the ACLU on this,” said New York University law professor Burt Neuborne, one of six prominent former ACLU officials who wrote to members of the Senate Judiciary Committee on Sept. 4 to publicly denounce the national ACLU’s campaign finance position. The letter was released as the Senate prepared to take up a resolution authored by New Mexico Democrat Tom Udall to amend the Constitution to permit political spending limits, something the Supreme Court has ruled violates the First Amendment.

“While, as present and former leaders at the ACLU, we take no position in this letter on whether a constitutional amendment is the most appropriate way to pursue campaign finance reform, we believe that the current leadership of the national ACLU has endorsed a deeply contested and incorrect reading of the First Amendment as a rigid deregulatory straitjacket that threatens the integrity of American democracy,” read the letter, which was signed by Neuborne, the ACLU’s former national legal director, and by its former executive director, Aryeh Neier, and its onetime general counsel, Norman Dorsen, among others.

In an interview with CQ Roll Call, Neuborne said he spearheaded the letter in response both to a June ACLU letter to the Judiciary panel strongly opposing a constitutional amendment, and to conservative leaders’ tendency to invoke the ACLU in denouncing the amendment. Full story

July 22, 2014

GOP Struggles With Fundraising for Women’s Initiatives | Rules of the Game

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Capito raised more than her opponent in the race for Senate in West Virginia. (Bill Clark/CQ Roll Call File Photo)

It’s been a promising year for Republican women who have set out to fix their party’s “woman problem,” but not good enough for their bank accounts.

Republicans launched a new crop of super PACs, recruitment programs and messaging campaigns to boost the GOP’s female candidates and win over women who vote. The latest such effort, an unrestricted super PAC unveiled in June by former Hewlett-Packard CEO Carly Fiorina, cleared $1 million in its first four weeks.

“We cannot permit liberal orthodoxy to marginalize women or suppress their enthusiasm for our candidates,” declared Fiorina, chairwoman of the American Conservative Union Foundation, in the mission statement for her new Unlocking Potential Project. The Unlocking Potential PAC’s top donors last month were Marmik Oil Co. President Michael Murphy and his wife, Arkansas designer Sydney Murphy, who each gave $500,000. Full story

July 16, 2014

Reforms May Fade, but Voter Anger Won’t | Rules of the Game

Opponents of big money in politics celebrated some small victories lately: A constitutional amendment to curb campaign spending cleared a key Senate committee and was introduced in the House. And a new “super PAC to end all super PACs” raised $5 million in a matter of weeks.

At first glance, such long-shot causes look inevitably doomed to fail. No one really expects two-thirds of Congress and three-quarters of the states to amend the Constitution in an area as disputed as campaign financing. And numerous super PACs bent on banning unrestricted money have come and gone in recent years, most of them now terminated.

But the latest campaign finance push, however impractical or constitutionally suspect, has tapped a well of voter anger that politicians ignore at their peril. Public disgust with Congress, which according to Gallup now enjoys a record-low 7 percent approval rating, may not impact this fall’s midterm elections. But as erstwhile House Majority Leader Eric Cantor discovered in his stunning loss in Virginia’s GOP primary, voter wrath over big money can exact a political price. Cantor’s primary opponent, tea party Republican Dave Brat, had made the majority leader’s cozy Wall Street and special interest ties a central campaign theme. Brat is now trumpeting the $400,000 he’s raised from small donors as evidence that he’s running a “campaign of the people.”

“People think you can’t win on the basis of this issue, and we want to say, ‘Actually, you can,’ ” said Lawrence Lessig, a Harvard Law School professor who on May 1 founded the Mayday PAC, a crowdfunded super PAC that will back congressional candidates committed to campaign finance changes. “And we want to do it in a way that surprises Washington, inside the Beltway.”

Lessig has already surprised himself and others by pulling in $1 million in the PAC’s first 13 days, then another $5 million by July 4. In an interview with CQ Roll Call, Lessig said he developed his own open source software to raise the money, since the popular Kickstarter crowdfunding tool lacked a platform for political donations. Mayday PAC has now raised $7.7 million of an anticipated $12 million once matching funds from large donors roll in, probably by the end of this month.

If Lessig hits his $12 million target, Mayday PAC will be among the top five highest-grossing super PACs in this midterm. The American Crossroads super PAC organized by GOP operative Karl Rove, for example, raised just $11 million through June 30 of this year, Federal Election Commission records show. Granted, the conservative super PAC’s social welfare affiliate, known as Crossroads GPS, appears to be raising and spending the largest share of the operation’s money in this election.

Still, Lessig’s anticipated $12 million haul is all the more noteworthy given how many super PACs formed with the aim of ending super PACs have fallen flat in recent years. A whole slew of do-gooder super PACs, many of them inspired by comedian Stephen Colbert’s super PAC contests and spoofs, sprung up in 2012. But virtually all of them, from Citizens Against Super PACs to No Dirty Money Elections, raised virtually no money and closed up shop within a year.

An exception is Friends of Democracy, a super PAC headed by David Donnelly, executive director of the Public Campaign Action Fund. That PAC raised and spent about $2.5 million in the 2012 elections, and managed to oust eight of the nine candidates it targeted for defeat. In this cycle, Friends of Democracy had raised $2.5 million through the second quarter, and will announce by the end of this month a new slate of state and federal candidates.

“There’s a tremendous amount of interest in it, and we’re very excited about the work that Mayday PAC and Larry Lessig are doing,” Donnelly said, noting the two PACs do not compete for donors and will coordinate their efforts. “There’s clearly an appetite for expanding this type of work.”

Lessig has generated media buzz and checks thanks in part to his public persona and promotional savvy. An author, progressive organizer and advocate of Internet deregulation, Lessig’s won backing from such Silicon Valley heavyweights as Apple co-founder Steve Wozniak and PayPal co-founder Peter Thiel. His crowdfunding model — donors were told they would get their money back if the PAC didn’t meet its targets in time — went viral to draw in 53,000 contributors.

The constitutional amendment push has also fueled surprising popular support. The amendment proposed by New Mexico Democrat Tom Udall in the Senate and introduced this week in the House by Rep. John B. Larson, D-Conn., flies in the face of more than one landmark Supreme Court ruling. Republicans deride it as a blatant First Amendment violation.

Some campaign finance experts cast the uphill amendment drive as an ill-advised distraction from more pragmatic changes. Lessig’s Mayday PAC, for one, is focused not on amending the Constitution but on such changes as matching small-dollar donations with public funding. Yet proposals to amend the Constitution are now backed by 16 states and 550 municipalities.

“People are really angry about what’s happening in our democracy,” said Margrete Strand, executive vice president of Public Citizen. The push for an amendment is something that average voters can “understand” and “grab onto,” she added.

To be sure, voters are notoriously fickle when it comes to campaign financing. Gallup’s latest polls on the topic found that half of voters support government funding of elections, and 79 percent support limiting campaign receipts and spending. But Democrats’ perennial assaults on big money have repeatedly failed to help them at the polls.

Lessig has set out to prove the issue can fire up voters as well as donors, and Mayday PAC will announce a slate of at least five federal candidates on July 21. Whatever the merits and demerits of various campaign finance schemes, voters will ultimately have the last word.

“The only way to prove this is to do it,” said Lessig. “We can have all sorts of polling and science and focus groups. But the thing that counts in Washington is victory.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

July 8, 2014

New FCC Disclosures Reveal Underground Election | Rules of the Game

A trove of new public records recently opened up by the Federal Communications Commission sheds light on the ways undisclosed political ads are creating an underground midterm election that’s increasingly hidden from view.

It’s already well known that unreported political spending is rising, thanks in part to Supreme Court rulings that have nullified campaign finance limits on several fronts. As of April 30, undisclosed political spending was three times higher than at the same point in 2012, according to the Center for Responsive Politics.

But new FCC records, which on July 1 vastly expanded the number of TV stations that must post their political ad files online, offer concrete metrics to document what the Sunlight Foundation’s Kathy Kiely calls the nation’s “gross political product.”

“It really has demonstrated how incessant the advertising is, and how much ‘off-the-radar’ political advertising has been spent,” said Kiely, Sunlight’s managing editor.

The Sunlight Foundation played a lead role in urging the FCC to require full online disclosure of political ad buys. Long required on paper, the political ad files were first made available online in 2012 by the four major broadcast affiliates in the nation’s top 50 markets, about 230 stations. Now 2,000 stations are filing disclosures online, virtually a tenfold increase.

With the help of a new tracking tool, researchers at Sunlight and other investigative outfits have started poring over the disclosures. These show for the first time just how much political air time is being bought by organizations that don’t report their activities to the Federal Election Commission — typically tax-exempt social welfare and trade groups that need not reveal their donors.

Among Sunlight’s findings: In the North Carolina Senate contest between incumbent Democrat Kay Hagan and her GOP challenger Thom Tillis, 65 percent of the ads supporting Tillis or attacking Hagan were not reported to the FEC. That’s because the ads, aired on WBTV Channel 3 in the state’s most costly media market, consisted of “issue” messages that didn’t directly advocate for a candidate’s election or defeat.

“Here is one station in one race,” said Kiely. “And if that is indicative, it’s telling us that almost all the early money spent so far is outside money, and that the FEC — the agency set up to create campaign accountability after Watergate — is not seeing half the money that is going into the political system.”

It’s a measure of the trend toward underground political spending that the Crossroads operation launched by GOP strategist Karl Rove is heavily lopsided in this cycle toward its non-disclosing tax-exempt arm. The group’s American Crossroads super PAC and its social welfare arm, known as Crossroads GPS, have together spent and reserved air time for about $23 million worth of political ads over the summer and into the fall, according to news reports and to sources familiar with the organization.

But less than a third of that — $6.5 million — is being spent by American Crossroads, which reports its activities to the FEC. The majority, some $17.3 million, is being spent by Crossroads GPS, which is exempt from disclosure rules.

It’s all legal, because Crossroads GPS and other politically active tax-exempt groups are airing “issue” messages that ostensibly constitute advocacy, not election activity. But such ads can be awfully hard to tell from campaign ads.

One North Carolina spot by Concerned Veterans for America, a social welfare group heavily funded by the billionaire industrialists Charles and David Koch, spotlighted the scandal involving health care delays at the Department of Veterans Affairs. (Hagan has said she supports a bill to address the delays.)

The ad featured an ominous soundtrack, unflattering black-and-white images of Hagan and of President Barack Obama, and a voice-over intoning that Obama “won’t hold the VA accountable,” and that Hagan “can, but she’s done nothing, putting her loyalty to her party and the president ahead of America’s veterans.”

Advocates of the First Amendment argue that such ads are a form of constitutionally protected public education, and the donors behind them have a right to remain anonymous. Outspoken Republicans on Capitol Hill opposed the FCC’s move toward greater disclosure and regard the push for transparency as a move to silence political adversaries and tread on free speech.

But Kiely says the disclosures offer valuable information about the increasingly obscure world of election spending: “I think we know a little bit more about what we didn’t know. There are still too many obstacles between voters and the information they need to make informed decisions at the polls. But this is progress.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

June 24, 2014

Mississippi Runoff Takes Financial Toll on GOP (Video)

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In the Mississippi runoff, McDaniel, above, is seeking the GOP nod over Cochran. (Tom Williams/CQ Roll Call File Photo)

Mississippi’s bruising GOP Senate primary, which voters will decide Tuesday in a runoff (get live results here!), has come at great cost — more than $17 million — to Republicans.

More than 30 Republican-friendly outside groups, from Club for Growth Action to the U.S. Chamber of Commerce, have lavished in excess of $11.3 million on the race, according to the Center for Responsive Politics. That’s almost twice the $6.1 million spent by Sen. Thad Cochran and his tea party challenger, state Sen. Chris McDaniel.

Liberal groups have essentially sat out the Mississippi primary, rated a Safe Republican contest by the Rothenberg Political Report/Roll Call. As of early May, conservative groups had spent three times more attacking one another in primaries around the country than they had against Democratic candidates, according to an analysis by the Center for Public Integrity.

Full story

June 10, 2014

Campaign Finance Hearings Showcase Extremes | Rules of the Game

As Senate Democrats gear up for their third in a series of public hearings on the state of campaign finance, Capitol Hill can expect another made-for-TV performance that’s long on political theatrics and short on policy.

If last week’s Senate Judiciary Committee hearing is any indication, lawmakers and witnesses testifying Wednesday at the Judiciary Subcommittee on the Constitution, Civil Rights and Human Rights will put on quite a show.

At last week’s hearing, which focused as this week’s will on whether Congress should amend the Constitution to permit tighter campaign spending limits, Senate Majority Leader Harry Reid, D-Nev., predictably assailed the billionaire industrialists Charles and David Koch for what he called their “phony organizations.”

Sen. Ted Cruz, R-Texas, countered in ringing tones that the proposed amendment “would give Congress the power to ban books and to ban movies.” He promptly posted his public comments to YouTube in a video titled “Sen. Cruz speaks in opposition to repealing the First Amendment” that has more than 26,000 views.

Sen. Charles E. Schumer, D-N.Y., deplored Cruz’s “overheated rhetoric” and “hyperbole,” but the Texas senator and possible 2016 GOP presidential contender will only have a bigger megaphone this week. He’s the ranking Republican on the subcommittee that’s holding Wednesday’s hearing.

And as Senate Majority Leader Mitch McConnell noted in his rare joint appearance with Reid before the full Judiciary Committee last week, Democrats know full well that a constitutional amendment — which would require approval by two-thirds of both chambers of Congress and three-quarters of state legislatures — is dead on arrival.

“This is a political exercise, and that’s all it is,” McConnell told the Judiciary panel. “The goal here is to stir up one party’s political base so they’ll show up in November, and it’s to do it by complaining loudly about certain Americans exercising their free speech and associational rights, while being perfectly happy that other Americans, those who agree with the sponsors of this amendment, are doing the same thing.”

Indeed, Democrats are as much to blame as Republicans for the triumph of symbolism over substance in the increasingly polarized campaign finance debate. Both sides have staked out positions on either extreme in the long-running dispute over how to balance anti-corruption limits with First Amendment rights.

Having once endorsed full disclosure and even their own constitutional amendment — albeit one more limited than what Democrats now propose — Republicans have mounted a court challenge to one of the few remaining rules left in place, namely the cap on contributions to the political parties. GOP leaders and their conservative allies off Capitol Hill have also launched an aggressive campaign to discredit both the IRS and the Federal Election Commission, and to equate political disclosure with harassment and intimidation.

Democrats, for their part, have embraced an amendment that would dramatically reorder the campaign finance system and raises legitimate constitutional questions. On the surface, the amendment proposed by Sens. Tom Udall, D-N.M., and Michael Bennet, D-Colo., looks simple enough: It would authorize Congress and the states to limit contributions to candidates — something existing campaign finance laws already do.

But the amendment would also empower Congress to limit “the amount of funds that may be spent by, in support of, or in opposition to such candidates.” This flies in the face of the Supreme Court’s landmark 1976 Buckley v. Valeo ruling, which concluded that caps on campaign contributions are constitutional, but that limits on candidate political spending violate the First Amendment.

Lost in the grandstanding by lawmakers on both sides of the aisle is the opportunity to find middle ground on any number of common-sense campaign finance changes that would require no constitutional tinkering.

These include settling tough questions about how aggressively tax-exempt groups may engage in advocacy before they stray into political territory, an area that’s confounded the IRS and where the agency could clearly use some congressional guidance. Congress could also tackle whether the dysfunctional FEC should be overhauled or replaced with a new type of agency that might actually enforce the rules. Or members could work together to free up the state and national political parties to more effectively compete with unregulated outside groups.

Of course, no one expects either Republicans or Democrats to seriously tackle any of these issues. As Election Day approaches, the tit-for-tat over campaign spending versus free speech will only become more politicized. So far, at least, voters aren’t paying much attention. But if and when they ever do, Congress will have two choices: take action on meaningful fixes, or risk paying a political price.

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

May 6, 2014

Did Soft Money Ban Kill Political Parties? | Rules of the Game

The Supreme Court’s recent ruling to overturn limits on aggregate campaign contributions has revived a long-running debate over the demise of the nation’s political parties, and what could bring them back to life.

In McCutcheon v. Federal Election Commission, the high court may have done the parties a favor by eliminating the $123,200 cap on what individuals may give to candidates and parties as a group in one election cycle. Parties are now free to solicit much larger checks through so-called joint fundraising committees, a type of collective account that divvies up money between parties and candidates.

Watchdogs warn that such joint campaign funds will effectively bring back the unlimited soft money contributions to the parties that Congress banned in 2002, legislation best known as the McCain-Feingold law after its Senate authors. But conservatives hail the McCutcheon ruling as the first step toward repairing the damage that they say was done by that ban.

That law “has succeeded in profoundly altering the state of American politics by severely weakening American political parties to the benefit of outside spending groups who may raise and spend unlimited funds in connection with federal elections,” testified election lawyers Neil Reiff, a Democrat, and Donald McGahn, a Republican, before the Senate Rules and Administration Committee last week.

Reiff, the former deputy general counsel at the Democratic National Committee, and McGahn, a former FEC chairman, aren’t the only McCain-Feingold critics to vent their frustration with the soft money ban in recent weeks. If only Congress hadn’t outlawed soft money, the ban’s detractors imply, a host of political ills would never have come to pass.

It’s easy to see why party organizers and advocates of campaign finance deregulation chafe at the current regime. After all, if unrestricted super PACs and non-disclosing tax-exempt groups can spend millions in elections with no limits, why can’t the parties? A wave of commentary has enumerated the parties’ salutary role promoting robust competition, and moderating partisan polarization by appealing to the voters in the center.

But the parties’ demise goes way beyond McCain-Feingold. And eliminating the cap on “base” contributions to candidates and parties, which many conservatives now endorse, would not necessarily strengthen the parties. While the McCain-Feingold law put $591 million in soft money that the parties had raised in 2002 out of reach, they quickly made up for that loss. In the 2004 elections, the parties collected more in “hard” money subject to contribution limits — $1.5 billion — than they had in hard and soft money combined ($1.1 billion) before the ban took effect.

Outside spending did increase — the so-called 527 groups came that came into vogue following the ban boosted their receipts to $424 million, an increase of some $273 million, according to the Campaign Finance Institute. But the big non-party spending jump didn’t come until after the 2010 Citizens United v. FEC ruling to deregulate independent campaign spending. In 2012, the first presidential race to follow that ruling, outside spending topped $1 billion.

If the parties had really spent their unrestricted money on get-out-the-vote activities and party building before the McCain-Feingold law took effect, soft money nostalgia might be more compelling. But a parade of former and current elected officials who defended that ban in court testified that the money was spent not on grass-roots activity or state and local elections, but on high-dollar ads; in 2000, 92 percent of those ads did not even identify the parties.

The former members of Congress testified that they “were expected to raise significant amounts of money for their party committees, were given incentives to do so, and could face sanctions if they did not.” They also detailed how party officials relied on lawmakers to net big donors and described “an inseverable link between the national political parties, their congressional fundraising committees and federal candidates.”

That real-world account contrasts sharply with the Supreme Court’s conclusion in McCutcheon that the parties act as a “buffer” that protects lawmakers from the corrupting influence of large contributions. Soft money gave the parties plenty of money to spend on ads, but it also gave them a black eye in the form of foreign money scandals, White House coffees and Lincoln Bedroom sleepovers.

Unrestricted money would strengthen the parties’ bottom line, but it may arguably weaken them institutionally in the long run. Parties succeed over time on the strength of their ideas, and on their ability to appeal to a broad base of voters, reflected materially in the support of small donors.

Notes former FEC chairman Trevor Potter, who heads the Campaign Legal Center and the political activity law practice at Caplin & Drysdale: “A couple of people writing big checks leaves you a hollowed-out party structure.”

Eliza Newlin Carney is a senior staff writer covering political money and election law for CQ Roll Call.

April 2, 2014

Will McCutcheon Ruling Boost Political Parties?

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Priebus voiced his excitement on the ruling Wednesday. (Bill Clark/CQ Roll Call File Photo)

Republican National Committee Chairman Reince Priebus could hardly contain his glee during a conference call with reporters shortly after the Supreme Court ruled to strike the aggregate limit on campaign contributions.

“We are excited about the outcome of this case,” exulted Priebus, noting that the RNC bankrolled the constitutional challenge brought by businessman Shaun McCutcheon from beginning to end. In McCutcheon v. FEC, the court ruled 5-4 to overturn the overall limit on what an individual may donate collectively to parties, candidates and PACs in one election cycle, which was capped at $123,200 total.

The ruling “allows us to go to our donors and say: Look instead of being able to give to only nine Senate candidates, you can now give to the 14 that are most in play,” Priebus told reporters. “And you can give to the Senate committee, the congressional committee and the RNC, and you can max out to all three.”

Priebus wasn’t the only party official rejoicing in the wake of the high court’s Wednesday ruling. One Democratic campaign committee operative confided that he was “happy as a pig in shit.” While advocates of campaign finance limits on and off Capitol Hill assailed the ruling as an invitation to corruption and campaign finance abuses, party officials welcomed the decision. Full story

Supreme Court Rejects Aggregate Contribution Limits

scotus 078 100813 445x296 Supreme Court Rejects Aggregate Contribution Limits

Campaign finance reform advocate Fred Wertheimer speaks at the Supreme Court after McCutcheon v. Federal Election Commission arguments last year. (Bill Clark/CQ Roll Call)

Updated, 11:45 a.m. | In a long-awaited ruling in the case known as McCutcheon v. Federal Election Commission, the Supreme Court today struck the aggregate limit on campaign contributions as an unconstitutional infringement on free speech.

Significantly, the high court left in place the base limit on how much individuals and political action committees may give to candidates and political parties. But today’s ruling makes a challenge to that direct contribution limit, which stands at $2,600 per election for an individual, all but inevitable in the near future.

What the court overturned today was the overall limit on the amount that one individual may give to candidates, parties and PACs in a two-year election cycle, a cap that now stands at $123,000. Republican businessman Shaun McCutcheon had challenged the aggregate limit on the grounds that giving the same amount to a larger number of candidates would not invite corruption. Full story

April 1, 2014

Christie’s Contractors: Backers Barred From Donating Found Loophole

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(Bill Clark/CQ Roll Call File Photo)

New Jersey Gov. Chris Christie may manage to put the George Washington Bridge scandal behind him, but even if he does, his ethics troubles won’t be over.

Christie’s complicated relationship with campaign contributors and state contractors, in particular, will draw scrutiny as he continues to mull a 2016 presidential bid. Christie’s donors have a history of gravitating to secretive and little-regulated political groups to promote the GOP governor and his agenda.

These include tax-exempt organizations that spent millions on Christie’s gubernatorial election and re-election campaigns, and that operate outside the disclosure rules. Political activity by nonprofits has become commonplace these days, and Christie’s opponents run their own non-disclosing tax exempt groups.

But Christie’s big backers, who have bankrolled several pro-Christie operations, stand out because many of them are state contractors otherwise barred from contributing to his campaign. New Jersey “pay-to-play” laws, considered the strictest in the nation, bar large state contractors, utilities and financial services firms that manage state pension funds from donating to state candidates.

Yet a long list of New Jersey contractors and pension fund managers have given generously to groups that either back or are closely linked with Christie. Such contributions have repeatedly raised questions as to whether Christie supporters are skirting the state’s pay-to-play laws — a suggestion that the state Treasury Department, which enforces those statutes, has rejected.

Full story

March 25, 2014

Democrats’ Anti-Koch Attacks Have a Familiar Ring

There is an oddly familiar ring to Democrats’ escalating attacks on the conservative billionaire Koch brothers.

In 2010, then-White House adviser David Axelrod decried the undisclosed, unrestricted money bankrolling outside conservative groups as “a threat to our democracy.” This year, Senate Majority Leader Harry Reid has been blasting the Kochs as “un-American” and accusing them of “trying to buy America.”

The comparison bodes poorly for Democrats now dumping millions into their campaign to demonize the Kochs in what appears to be a central piece of their midterm elections strategy. In 2010, unrestricted conservative outside groups funded by industrialists Charles and David Koch helped knock House Democrats out of power in a historic GOP upset. This time around, the Koch-funded Americans for Prosperity has already spent some $27 million attacking Democrats, focusing squarely on the party’s most vulnerable Senate incumbents.

But it’s unclear how much Democrats have learned from the last midterms. Yes, Democrats have established their own network of unrestricted super PACs, casting off any pretense of taking the political-money high road. This election’s top-spending super PAC so far is the pro-Democrat Senate Majority PAC, according to the Center for Responsive Politics, and liberal super PACs have spent almost double that of their conservative counterparts.

The anti-Koch attacks are now the subject of a $3 million Senate Majority PAC ad campaign — essentially a retread of liberal assaults on big money in 2010. In those elections, the first to follow the Supreme Court’s ruling in early 2010 to lift all limits on independent political spending, Democratic National Committee spokesman Brad Woodhouse bemoaned the “growing and pernicious effects of secret, special interest money being used to determine the outcome of our elections.”

This time, the Democrats’ attacks on big money are being leveled more personally at the Kochs and their Koch Industries Inc. conglomerate. The Democratic Senatorial Campaign Committee portrays Republicans as “addicted to Koch.” A Web ad by American Bridge 21st Century, the Democratic super PAC and tracking organization, calls the Koch agenda “bad for the middle class.”

Officials for Koch Industries have criticized the attacks as an intimidation campaign designed to deflect attention from Democrats’ own agenda. Organizers for Americans for Prosperity, a social welfare group that operates outside the disclosure rules, maintain that their objective is to repeal the Affordable Care Act.

But the group’s ads hammer on vulnerable Democrats in states such as Arkansas, Louisiana and North Carolina, and they are expanding into campaign-style organizing, door-knocking and voter mobilization. Some speculate that the anti-Koch attacks leveled by Reid and his allies are a distress signal to liberal donors.

Democrats say their complaints against the Kochs are rooted in their policy differences with Republicans. The anti-Koch campaign hammers on populist themes such as economic equity and entitlements for seniors, and portrays Republicans as the party of moneyed interests.

As American Bridge spokeswoman Gwen Rocco put it: “The real reason the Kochs have already spent tens of millions on attacks this cycle is to undermine voters’ confidence in government and drive their conservative agenda that enriches the wealthiest Americans at the expense of the middle and working class.”

In Arkansas, where GOP Rep. Tom Cotton is challenging incumbent Democratic Sen. Mark Pryor, Pryor campaign officials estimate that Americans for Prosperity has spent $2.2 million on ads opposing the senator. Total outside spending against Pryor tops $5 million. Pryor accuses Cotton of being in the pocket of wealthy interests and argues that the representative’s votes against the farm bill and the Violence Against Women Act, for example, put him and the conservative groups that back him out of step with Arkansas voters.

“Obviously the outside money from these Republican groups is going to be large, and it’s likely that we will be outspent on TV,” Arkansas Democratic Party spokesman Patrick Burgwinkle said. “But what’s important for us is getting the message across that Congressman Cotton and these outside groups are just too reckless for Arkansas.”

In North Carolina, Democratic Sen. Kay Hagan has launched a digital media campaign showing her GOP opponent, state House Speaker Thom Tillis, as aligned with the Kochs’ “bad-for-the-middle-class” policies. Americans for Prosperity has spent $8.3 million on ads opposing Hagan, according to numbers released by Hagan’s campaign.

Republicans dismiss the anti-Koch attacks as a sign of Democratic desperation. In 2010, voters largely ignored Democrats’ assaults on secret, unrestricted campaign money and delivered the House to Republicans in a 68-seat sweep. Democrats’ recent anti-Koch assaults are more rooted in substantive differences with Republicans on issues such as Medicare and the minimum wage. Still, it remains to be seen whether their campaign against moneyed interests will resonate any better with voters in the 2014 midterm elections than it did four years ago.

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