“SCOTUS Naive On Super PACs”: Insulated From The Machinations Of Political Campaigns And Campaign Finance Realities
When the Supreme Court paved the way for unlimited independent spending in elections with its Citizens United decision, the justices assumed a key protection to prevent corruption: The expenditures would be truly independent, so it would make it impossible for a candidate and a donor to engage in a quid pro quo. In theory, this makes sense. If there’s no coordination between the independent groups like super PACs and candidates — and coordination remains technically illegal — then donors will fund independent expenditures purely out of their own political beliefs and not in the expectation of getting anything in return.
In practice, however, this distinction completely breaks down because groups are often established to fund a single candidate, as opposed to a broad cause, and there are plenty of ways to communicate intentions or expectations without violating narrow coordination laws.
A new report from Public Citizens shows just how absurd it is to assume that outside groups are truly independent. Of all the major super PACs and 501(c) nonprofit groups that engaged in the 2012 election, about half backed a single candidate exclusively, effectively making themselves auxiliary organs of the candidate’s campaign, the report found. Generally, these groups were “founded, funded or managed by friends, family members, or recent campaign aides of the candidate they supported,” the report adds.
The most obvious examples are Priorities USA, the Obama super PAC founded by a former White House aide, and Restore Our Future, the Romney super PAC founded by the general counsel of Romney’s 2008 presidential campaign. These groups allowed wealthy donors who had already maxed out their donations to either candidate’s official committee to give unlimited additional funds to the auxiliary super PAC to support their candidates.
Meanwhile, another 30 percent of spending came from groups designed specifically to aid the parties. For instance, the Democratic-affiliated House Majority PAC acted as an auxiliary to the Democratic Congressional Campaign Committee. All of this is aboveboard.
In total, candidate-specific and party-allied groups accounted for more than 65 percent of all spending by outside groups in the 2012 elections, including seven of the top eight groups, according to the report. Among super PACs alone, that percentage climbs to 74.4 percent.
“The emergence of entities using unlimited contributions to aid candidates and parties with which they have close relationships threatens to gut the anticorruption policy underlying campaign finance laws, which the court claimed it did not intend to weaken,” Taylor Lincoln, the research director of Public Citizen’s Congress Watch, and his co-authors wrote.
In its Citizens United decision, the Court approvingly quoted from an earlier decision, Buckley v. Valeo, observing that in independent expenditures, “The absence of prearrangement and coordination of an expenditure with the candidate or his agent not only undermines the value of the expenditure to the candidate, but also alleviates the danger that expenditures will be given.”
Clearly, if independent expenditures de facto operate as direct contributions, the distinction is meaningless and the supposed protection of independence is destroyed. This was obvious to almost everyone before the decision — except for the justices, apparently. They are insulated from the machinations of political campaigns and campaign finance realities, which is usually a good thing, but it allowed them to base a major overhaul of the nation’s campaign finance laws on a flawed and naive understanding of the world.
None of this is particularly surprising to anyone even vaguely aware of the campaign finance dynamics of the 2012 cycle, but the report adds critical numbers and details.
By: Alex Seitz-Wald, Salon, March 5, 2013
Oh, Please: The Hypocrisy Of Gingrich And Romney
To use the adverbs of which he is so fond, it is magnificently, fundamentally, literally ironic that Newt Gingrich, the master of slasher political rhetoric, is busy mewling over those meanie attack ads being run against him.
And to employ Mitt Romney’s favorite piece of management-consultant speak, with regards to those terrible, horrible nasty outside groups, it’s a bit rich for the former Massachusetts governor to bemoan their existence and assert that there’s absolutely, positively nothing he could do to get them to stop.
How dumb do they think we are?
Gingrich has long been a leading advocate and practitioner of the full-throated political attack. His current ads may be all warm and Christmas cozy, with syrupy music in the background, but his lifelong modus operandi has been to demonize opponents, not simply differ with them.
In “Language: A Key Mechanism of Control,” a guide produced by Gingrich’s GOPAC political action committee, fellow Republicans are advised, “Sometimes we are hesitant to use contrast. . . . Remember that creating a difference helps you.” Among the Gingrich-suggested words: “radical,” “pathetic,” “sick,” “traitors,” “steal,” “corrupt” and “disgrace.”
Gingrich didn’t stop at hurling words — he launched a first salvo in the ethics wars that ended up consuming him when he filed a complaint against then-House Speaker Jim Wright, D-Tex.
He was also a pioneer in the use of outside groups to buttress his political prospects. See GOPAC, above, and the investigation that ended up with Gingrich agreeing to a reprimand and a $300,000 fine.
So forgive me if I have a hard time generating any sympathy for the now put-upon candidate when he whines about the onslaught of negative attack ads being run by outside groups supporting Romney and others.
“I object to negative smear campaigns,” asserted Gingrich, master of the negative smear campaign. Boo-hoo-hoo.
Not that Romney deserves any sympathy, either. The explosion of super PACs, Romney said on MSNBC the other day, has been “a disaster” that “has made a mockery of our political campaign season.”
Really? I don’t recall Romney having anything critical to say about the Supreme Court’s Citizens United ruling, which ushered in the era of super PACs permitted to make unlimited expenditures on behalf of favored candidates. In fact, Romney told the Portsmouth (N.H.) Herald’s editorial board last month of the justices’ ruling: “I think their decision was a correct decision. I support their decision. I wish we could find a way to get money out of politics. I haven’t found a way to do that.”
More to the point, if Romney believes that super PACs are such a problematic development, could he explain what, precisely, he was doing speaking at events sponsored by Restore Our Future, the super PAC run by former Romney aides and now responsible for the barrage of negative advertising against Gingrich.
“We really ought to let campaigns raise the money they need and just get rid of these super PACs,” Romney said on MSNBC’s “Morning Joe.” Well, showing up at their events is a rather odd way to achieve this.
Then there is Romney’s phony claim that he can’t say anything to disavow the super PAC advertising for fear of being sent to “the big house” — as in, “My goodness, if we coordinate in any way whatsoever, we go to the big house.”
Oh, please. It’s illegal for the Romney campaign to coordinate with the Romney-backing super PAC, but those rules are porous enough to have allowed, for example, Romney to speak at a Restore Our Future event.
But the question posed to Romney was merely whether he would call on the super PAC, as Gingrich had demanded, to stop the negative advertising. “I’m not allowed to communicate with a super PAC in any way, shape or form,” he claimed. But nothing — nada, zilch — would prevent Romney from disavowing the advertising or calling on the super PAC to cut it out. Which, of course, he won’t.
This may sound a bit harsh, but, really, these two candidates deserve each other.
By: Ruth Marcus, Opinion Writer, The Washington Post, December 22, 2011
Campaign Financing: Small House In Tampa Ground Zero For Mega Millions In Campaign Donations
A little over a year ago, no-party gubernatorial candidate Bud Chiles stood outside an off-white single-story building with a carefully manicured lawn in suburban Tampa and said, “This building behind me is ground zero for what’s wrong with Florida politics.”
The building’s address: 610 South Blvd., a designation found on the financial disclosure forms of countless political committees in Florida and all over the country. The unassuming building nestled in an unassuming neighborhood is a veritable political action committee mill, churning out millions of dollars and influencing elections all over the country.
The kicker: What is happening at 610 South Blvd. is completely legal.
Chiles — who eventually dropped out of the race and endorsed Democratic candidate Alex Sink — was echoing the thoughts of millions of Americans who feel that too much money goes into our country’s political system, and we know way too little about where it comes from.
610 South Blvd. provides insight into a commonly overlooked aspect of campaign financing: Because so few people understand the nuances of campaign money, politicians and activists have a limited number of places to turn to when starting a committee. That leads to a high concentration of candidates and committees at a few select addresses, none more infamous in Florida political circles than 610 South Blvd.
Nancy and Robert Watkins together run Robert Watkins and Co., the accounting firm located at 610. Thirty-nine political committees are currently registered under the address with the Federal Election Commission (FEC). The committees registered there have conservative leanings and ties exclusively to Republican politicians.
The organizations range from leadership PACs, 501(c)4s and 527s to campaign committee PACs and even a handful of Super PACs — a new and controversial type of PAC that allows groups to raise unlimited funds from corporations, individuals and unions. And these groups tend to bring in big money. In 2010, one of the Super PACs at 610 raised more than $4 million.
Watkins and Co. also has 19 state PAC clients filed with the Florida Division of Elections.
Nancy Watkins says her firm’s impressive number of clients exists because she has been in the business for more than 25 years. According to her, 610 South Blvd. is an “official address” for many groups “for a lot of reasons.” Mostly, she says, the firm provides a reliable and “durable mailing address” for all her clients.
Meredith McGehee — the policy director for The Campaign Legal Center, a nonpartisan, nonprofit organization that works in the area of campaign finance and elections — tells The Florida Independent there are no rules against multiple PACs sharing an address.
McGehee calls the FEC’s rules for what passes as coordination among these groups “ridiculous,” and says that even if groups follow FEC rules, their activities would probably not “pass a smell test for regular people.”
According to McGehee, as long as the groups do not coordinate with each other in a way that violates FEC laws, they can communicate, work together and share an address. She calls the FEC’s rules for what passes as coordination among these groups “ridiculous,” and says that even if groups follow FEC rules, their activities would probably not “pass a smell test for regular people.”
“The rules are so loose,” she says. “So there is a lot they can do. They can coordinate in common sense terms — just not legal terms.”
McGehee says these groups, for example, can share an office and “talk about general strategy” and still not violate FEC coordination rules.
Watkins says the fact that all her clients share her address “does not create a relationship between them.” She says everything done at her business is ethical, and that she does not talk to one client about another.
Federal policy-makers from all over the country turn to Watkins and Co. for their services. Former Sen. Mel Martinez and Reps. Katherine Harris, Rick Renzi and Pat Roberts are among those with ties to 610 South Blvd. In 2008, Mike Huckabee registered his Florida presidential campaign committee with the firm.
Most have created their own leadership PACs with the company. Leadership PACs are political action committees that “can be established by current and former members of Congress as well as other prominent political figures,” according to the Center for Responsive Politics.
The Center, a nonpartisan research group, explains that “leadership PACs are designed for two things: to make money and to make friends. In the rough and tumble political game, elected officials know that money and friends in high places are very important to winning elections and leadership positions.”
Watkins and Co., however, are not only providing leadership PAC services for folks in D.C. The firm also houses the paperwork for a number of state PACs, or committees of continuous existence, associated with GOP members of the Florida Legislature. Steve Precourt, Ellyn Bogdanoff, Jack Latvala, Miguel Diaz de la Portilla, Anitere Flores, Steve Crisafulli and Kevin Ambler, to name a few, all run campaign finance activity through 610 South Blvd.
Furthermore, these state PACs associated with Florida legislators have raked in a lot of money. In the year 2011 alone, these committees have brought in about $400,000. Latvala’s PAC has raised about $230,000 this year.
The office building also serves as the home for four Super PACs, controversial independent expenditure-only committees. Super PACs are a new kind of political action committee created in the wake of the federal court case SpeechNow.org v. Federal Election Commission, which loosened up previous campaign finance regulations.
According to the Center for Responsive Politics, Super PACs “may raise unlimited sums of money from corporations, unions, associations and individuals, then spend unlimited sums to overtly advocate for or against political candidates.” Thanks to new rules, Super PACs can receive unlimited amounts of money from a corporation’s treasuries (i.e. profits), something that was previously illegal.
Super PACs do have to report their donors to the FEC on a monthly or quarterly basis; unlike traditional PACs, they cannot contribute money directly to political candidates.
As of Oct. 18, the Center for Responsive Politics reports that 156 committees are registered as Super PACs and have already “reported total expenditures of $2,596,787 in the 2012 cycle.”
The Super PACs listed under 610 South Blvd. include a conservative committee called the Coalition to Protect American Values; the Ending Spending Fund, a group that ran attack ads in Nevada against Harry Reid; the We Love USA PAC, a Super PAC famous for saying Obama is a “socialist” who “detests America”; and Dick Morris’ Super PAC for America.
The Super PACs listed under 610 South Blvd. include a conservative committee called the Coalition to Protect American Values; the Ending Spending Fund, a group that ran attack ads in Nevada against Harry Reid; the We Love USA PAC, a Super PAC famous for saying Obama is a “socialist” who “detests America”; and Dick Morris’ Super PAC for America.
The firm is also contracted by more traditional PACs, such as the American Issues Project. The group is known for spending $3 million on ads during the 2008 election tying the former founder of the Weather Underground Bill Ayers to Barack Obama. Most recently, the group focused on attacking the president’s stimulus legislation in 2010.
Also at 610: Florida Working Families, a PAC funded primarily by Big Sugar, notorious for its significant political reach in Florida and all over the country. Working Families launched negative ads against Jim Davis, attacking him for missing a vote in support of Israel, and successfully attacked Mary Barley, an environmental activist who ran in the Democratic primary for agricultural commissioner in 2002.
Watkins and Co. also provides services to a PAC funded by developers, lobbyists, builder’s groups and the Florida Chamber of Commerce called Floridians for Smarter Growth. The group was among the political forces opposing last election’s Amendment 4, known as the “Hometown Democracy” amendment. According to Ballotpedia, the amendment “proposed requiring a taxpayer-funded referendum for all changes to local government comprehensive land-use plans.” Floridians for Smarter Growth launched a successful attack against the amendment and coined (.pdf) the phrase the “Vote on Everything Amendment.”
In total, about 50 different PACs get their financial assistance and guidance from Watkins and Co.
According to the IRS’ records of tax-exempt groups, there are also four 527s using the address. 527s are advocacy groups that electioneer, and spend millions on a variety of positions and issues. While they may not explicitly tell voters to cast their ballots for a specific candidate, they clearly affect the way voters see a candidate or issue.
Watkins and Co. also handles the finances for a handful of tax-exempt nonprofits, including 501(c)4 organization. New rules now allow these types of groups to spend the money they raise anonymously, because their “primary activity” is lobbying.
McGehee says these sorts of details “reveal how the system really works” in elections.
Most people, she says, have little to no participation in this part of the political process. “About .08 percent of the population will spend more that $200 in an election cycle,” McGehee says.
Echoing Watkins, McGehee says that only a select few have the campaign finance expertise that Nancy and Robert Watkins provide, which contributes to the high number of clients 610 South Blvd. works with.
According to McGehee, there is also “a desire among these groups to know what everyone else is doing.” She says that is why the firm works exclusively with conservative groups and GOP policy-makers. ”It is rare that someone is serving both sides,” McGehee says. “It’s not accidental.”
The high concentration of key players in campaign financing — whether it is contributors or accountants — has led to a situation in which the political process is dominated by very few people. McGehee says that people have noticed, even though new rules have done nothing to correct the situation.
“There has always been this populist strain, whether its the tea party or Occupy Wall Street,” McGehee says, “that knows — and is angry about — our political system being dominated by monied interests.”
By: Ashley Lopez, Florida Independent, Published in The Washington Independent, October 24, 2011
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