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Who Needs “Poor People”: Records Show How Wealthy Shape Presidential Race

Groups known as “Super PACs” raised more than $42 million to back Republican U.S. presidential contenders in 2011, according to campaign filings that show how new donation rules are allowing a relatively few wealthy Americans to shape the race.

The reports filed with the Federal Election Commission (FEC) late on Tuesday offer a vivid picture of the impact of a 2010 U.S. Supreme Court decision that allows unlimited donations to political action committees (PACs), groups that are legally separate from the candidates they support.

The reports showed why the Super PAC supporting Republican frontrunner Mitt Romney, called Restore Our Future, has been such a force in the campaign – largely by running attack ads against Newt Gingrich, Romney’s top Republican rival.

Restore Our Future hauled in $30 million in 2011, and had nearly $24 million in the bank at the end of the year.

The group spent a big chunk of that during the past month in Florida, where its ad barrage against Gingrich was widely credited with helping Romney to victory in Tuesday’s primary. Florida was the latest contest in the state-by-state battle to pick a Republican nominee to challenge Democratic President Barack Obama in the November 6 election.

The pro-Romney group’s bankroll dwarfed the PACs supporting other Republican contenders, as well as the group that backs Obama. Priorities USA, the pro-Obama group, raised $4.2 million last year and had $1.5 million in the bank on December 31.

The funding disparity between the groups suggests the PAC supporting Romney could help the former Massachusetts governor overcome the Obama campaign’s formidable fund-raising advantage if the two meet in November’s general election. Contributions to candidates’ campaigns are limited to $2,500 per donor.

Obama’s organization continued its dominance in the race for cash among candidates’ campaigns, raising $130 million for the year. That topped the Romney campaign’s $57 million, which led the Republican presidential field.

Tuesday’s filings also revealed the growing warchests that independent Republican groups are building with the presidential and congressional races in mind.

American Crossroads and its affiliated group, Crossroads GPS, raised a total of $51 million in 2011.


Super PACs were forged from the 2010 Supreme Court ruling that erased longstanding limits on corporate and union money in federal elections as an unconstitutional restriction of free speech.

The ruling unleashed a flood of money into a political system coming off the most expensive presidential election in U.S. history in 2008, when candidates spent more than $1 billion. It also opened the door for wealthy individuals to prop up candidates by writing a check.

“Super PACs have fundamentally changed the way campaigns are run, and it’s had a huge effect on the race,” former Michigan Republican Party chairman Saul Anuzis said. “If you can find one donor who is willing to play in a big way, it can have an unbelievable impact.”

For the first time, the FEC reports revealed many of the wealthy donors behind the Super PACs.

Harold Simmons, a billionaire Dallas banker and chairman of Contran Corp, gave American Crossroads $5 million and Gingrich’s group $500,000. Contran gave another $2 million to the Crossroads group.

Peter Thiel, billionaire co-founder of the payment service PayPal, gave the Super PAC backing Texas congressman Ron Paul $900,000. Foster Freiss, a billionaire investor from Wyoming, founded the Red, White and Blue Fund that backs former U.S. Senator Rick Santorum and donated $331,000.

The reports did not include the donations by billionaire casino owner Sheldon Adelson and his wife, Miriam, who poured a combined $10 million – $5 million each – into the pro-Gingrich group in January, after the period covered in Tuesday’s reports.

One of Adelson’s step-daughters gave Gingrich’s group $500,000 in 2011, and another gave $250,000, the reports showed.

The first check from the Adelsons came as Gingrich headed into a critical showdown with Romney in South Carolina. It helped pay for a movie and ads criticizing Romney’s work as head of the private equity firm Bain Capital – an issue that helped propel Gingrich to a big South Carolina upset victory.

By last weekend, the pro-Gingrich PAC had spent a total of $8.5 million – much of it, it appears, from the Adelson family.


“Super PACs are allowing a relative handful of super-rich people to have a disproportionate and magnified influence on elections,” said Fred Wertheimer, president of Democracy 21, a watchdog group dedicated to reducing the influence of money in politics.

Super PACs and other outside groups spent about $42 million on the presidential race through the end of January, according to independent expenditure reports filed with the FEC. Romney’s group has spend more than $17 million, compared with $8.5 million for Gingrich.

The filings also shed light on the scrambling by supporters of former House of Representatives speaker Gingrich in recent weeks.

Gingrich’s allies at Winning our Future raised just $2.1 million in 2011. But like Romney’s Super PAC, it raised and spent millions more in January. Much of that money went toward attack ads in South Carolina and Florida.

The flood of money drowned Gingrich in negative ads in Florida, where Romney’s Super PAC outspent Gingrich’s group by nearly 3-to-1 and aired ads questioning his conservative credentials, record in Congress and temperament as a leader.

Romney won Florida easily on Tuesday, beating Gingrich by about 15 percentage points to take a big step toward winning the Republican nomination.

“If you look at it in the simplest way, the role of the Super PACs has been to prop up candidates who in the past would have been forced out of the race because they ran out of resources,” said Anthony Corrado, a campaign finance specialist at Colby College in Maine.

The pro-Romney Super PAC fired back in Florida with a withering barrage of attacks on Gingrich as a Washington insider who peddled his influence to make $1.6 million from mortgage giant Freddie Mac.

Those attacks, and two strong debate performances by Romney, halted Gingrich’s momentum and fueled Romney’s runaway win in Florida on Tuesday.


The only restriction on Super PACs is that they are not allowed to coordinate their actions with the candidates they back. Romney has cited the restriction repeatedly when he has been asked to tell his Super PAC to pull down controversial ads.

In reality, however, most of the Super PACS are run by former staffers for the candidates who know what works for the campaigns without being told.

“I’ve known Newt for 12 years. I can dance with the campaign without coordinating with the campaign,” said Rick Tyler, a longtime Gingrich staff member who now runs the pro-Gingrich Winning Our Future group.

“I’m carefully watching what he’s saying in the public record,” he said. “It’s not hard for me to follow.”

Gingrich has been the target of more than $16 million in negative ads, while $5 million has been spent to hammer Romney, the FEC reports said.

The $57 million raised by the Romney campaign led the Republican candidates in the money chase in 2011. Gingrich raised nearly $13 million and Texas Governor Rick Perry, who has dropped out of the race, raised nearly $20 million.

By: John Whitesides, Reuters, February 1, 2012

February 3, 2012 - Posted by | Campaign Financing | , , , , , , , ,

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