By KENNETH P. VOGEL – – – –
Big-money outside groups have spent more than $143 million in the presidential race in the six months since any of them were required to reveal their donors, according to a POLITICO analysis of campaign and advertising records.
The origins of some of that cash will never be revealed, while the rest of it won’t become known until midnight on Jan. 31 ― meaning that voters won’t know who funded the majority of the ads in the presidential race until just hours before Iowa voters head to their state’s pivotal caucuses.
The opacity is emblematic of the new political reality in which presidential candidates’ allies are spending an increasing amount of cash in ways that push the bounds of campaign finance rules rendered rickety by recent federal court decisions, regulatory inaction and congressional neglect.
Through Monday, super PACs and other big-money outside groups had spent nearly four times as much on ads in the presidential race as the candidates’ own campaigns, which had spent $42 million since the beginning of July, POLITICO’s analysis found.
And supporters of Hillary Clinton, Marco Rubio, Ted Cruz and Jeb Bush, among other candidates, have pioneered new ways for their campaigns to work with those outside groups that test key assumptions set forth in the Supreme Court decision that paved the way for super PACs and other big-money groups.
The decision, Citizens United vs. Federal Election Commission ― whose sixth anniversary is next week ― cleared the way for corporations and unions to spend unlimited sums on campaign ads. The new spending wouldn’t lead to corruption because it would be independent from candidates and transparent to voters, Justice Anthony Kennedy wrote in the majority opinion.
But Ann Ravel, a member of the Federal Election Commission, said it’s become increasingly clear that the justices “did not understand what the implications were going to be of what they did.”
Much of the blame for the current state of affairs also lies with her own commission, she added. It has gridlocked over efforts to enact new rules after Citizens United and to enforce existing ones requiring groups that air political ads to disclose their donors and barring certain types of coordination between candidates and unlimited-money outside groups, including super PACs, which were created by a lower court decision soon after Citizens United.
Coordination and disclosure “are the two issues that are the most frustrating, because the court was very clear about it and the law is very clear about it, but it’s clear that this is not the reality in the 2016 election,” she said. “Every day, we learn more and more about how super PACs and other outside groups are working extremely closely with federal candidates.”
Every major presidential hopeful has at least one big-money outfit dedicated to electing him or her ― with the notable exceptions of Republican front-runner Donald Trump and the surprisingly strong Democratic dark horse Bernie Sanders. The two candidates’ anti-establishment campaigns are finding enthusiastic audiences for their condemnations of the new system, while Ted Cruz is playing both sides, blasting Republican megadonors for skewing the presidential primary, while assiduously courting those who can write huge checks to the outside groups supporting him.
Ten outside groups supporting the Texas senator’s campaign for the GOP nomination have reported spending a combined $3.8 million on advertising supporting him between the beginning of July and Monday, according to FEC records.
That pales in comparison with the $61 million that FEC records show has been spent on advertising-related costs by Right to Rise USA, a super PAC supporting former Florida Gov. Bush. He appeared at multiple fundraisers for the group before declaring his candidacy and has attended at least one Right to Rise event since he officially entered the race. The super PAC is run by Mike Murphy, a close Bush ally and political strategist.
Bush, as well as Ohio Gov. John Kasich and former Hewlett-Packard CEO Carly Fiorina all appeared in video footage shot by the super PACs supporting their respective campaigns for the GOP presidential nomination. Their lawyers have said their appearances did not violate the coordination ban, and that the video can be used in television ads boosting their campaigns because it was shot before they officially declared their candidacies and became subject to the coordination ban.
But the super PAC relationships persisted after the campaign kicked off. The leading pro-Fiorina super PAC actually stages rallies for her, with the candidate appearing as a “special guest,” while her official campaign facilitates the wink-and-nod act by posting her schedule online in advance of appearances so the PAC can plan accordingly.
Among the most aggressive interpretations of the coordination rules is the work of Clinton and her big-money allies. They have pioneered a relationship in which a super PAC called Correct the Record provides research and communications assistance directly to the former secretary of state’s campaign for the Democratic presidential nomination.
In addition to paying Correct the Record more than $280,000 for research through July, the Clinton campaign also coordinates its media talking points and messaging with the super PAC, which was created by Clinton antagonist-turned-enforcer David Brock. Correct the Record argues that this relationship is permissible because the coordination ban applies only to paid television and radio advertisements known as “public communication(s)” and not to communications with the news media or those with the public made through emails or the Internet, which since 2006 mostly have been exempt from FEC regulation. When the group launched in May, it declared it “will not be engaged in paid media and thus will be allowed to coordinate with campaigns and Party Committees.”
That is a “misunderstanding of the law,” charged Paul S. Ryan, an executive at the Campaign Legal Center, a group fighting to stem the flow of big money into politics. It intends to file a complaint with the FEC alleging that Correct the Record is violating a broader coordination prohibition in an adjacent section of the law, which defines coordination as “expenditures made by any person in cooperation, consultation, or concert, with, or at the request or suggestion of, a candidate, his authorized political committees, or their agents.”
Pointing out that Correct the Record ― like many of the other 2016 super PACs ― was created expressly to support a presidential campaign, Ryan argued in an email that “every penny it spends is arguably/potentially an illegal coordinated expenditure.”
But Ryan’s outfit and other election watchdog groups have not found an immediately receptive audience among regulators at the FEC, the Internal Revenue Service and Justice Department for more than a dozen complaints they’ve filed to date alleging that various presidential candidates and their big-money allies have flouted different campaign finance or tax rules.
In a letter to the Justice Department, Ryan’s group and another government watchdog called for an investigation into a nonprofit group formed by Marco Rubio’s allies called Conservative Solutions Project. The group has spent $9.5 million on ads touting the Florida senator, according to records compiled by a nonpartisan media tracking and competitive analysis company called The Tracking Firm.
But it is registered under a section of the tax code ― 501(c)(4) ― that allows it to entirely shield its donors’ identities. That section is intended for groups that pursue a social welfare mission and the complaint from Ryan’s group alleges the use of it by Rubio’s allies “presents an especially clear-cut and egregious example of flaunting of the tax code.”
And the groups have complained that Bush and other White House hopefuls flouted the spirit of the FEC’s candidacy rules by delaying their official entries into the race, allowing them and their strategists to continue coordinating with big money allies.
The six-member FEC has repeatedly deadlocked on enforcement decisions, with members nominated by Democrats supporting tougher enforcement and those nominated by Republicans opposing it. But even when the commission agrees to proceed, its cases often drag on for years. An investigation into a pro-Mitt Romney super PAC for paying to air one of the Romney campaign’s ads in 2012 yielded a $50,000 fine ― four years later.
If anything, regulators have gone the opposite way, quietly expanding avenues for candidates to work with super PACs and declining to enact new rules that address the new reality, while gridlocking on efforts to enforce existing rules on disclosure, coordination and other subjects.
Meanwhile, efforts to pass new laws to tighten disclosure after Citizens United have repeatedly failed in a divided Congress where the Republican majority largely opposes campaign finance regulations and last year even blocked funding for the IRS to proceed with a rule-making to update its regulations for 501(c)(4) groups.
Supreme Court Justice Antonin Scalia in a 2012 public appearance said “if the system seems crazy to you, don’t blame it on the court.” He explained that he and his fellow justices are responsible only for determining the constitutionality of laws and regulations. It’s the responsibility of politicians to change public policy, he said. And, if voters don’t like the policies, it’s their responsibility to elect new politicians to write better ones, he said, adding they also have the power to do something about the waves of super PAC ads flooding into their living rooms.
“People are not stupid. If they don’t like it, they’ll shut it off,” said Scalia.
Kennedy was slightly more introspective during an October appearance at Harvard Law School, his alma mater. He acknowledged that things didn’t turn out exactly as he envisioned when he predicted that the Internet would allow for “rapid and informative” online disclosure of the sources of the new unlimited political ad spending legalized by Citizens United.
“This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages,” he wrote in the decision, allowing the public “to hold corporations and elected officials accountable for their positions and supporters.”
At Harvard, though, Kennedy conceded “that’s not working the way it should” nearly six years after the decision.