New rules see US campaign funding skyrocket

Posted on March 4, 2012

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Campaign spending in this year’s US presidential election is set to be the highest ever thanks to a landmark decision by the Supreme Court in 2010, yet it looks likely to be matched by a corresponding rise in negative advertisements by candidates.

The decision by the United States Supreme Court in 2010 to remove the limits on political expenditures by corporations and unions during elections ended a 20-year ban on businesses using their own funds to pay for campaign advertisements.

As candidates from the opposition Republican Party battle it out for the right to challenge President Barack Obama in November, the law has been used to allow the creation of ostensibly independent political action committees (PACs) that campaign on behalf of them. These committees have overseen a huge increase in the use of negative attack adverts, which were relatively low at the large election. This has not only divided the Republican Party at a time when it should be projecting a united alternative to Obama, but also forced the president to redouble his campaign efforts and adopt the PAC model that he has publicly condemned.

Justices in favour of the decision, which passed by five votes to four, said at the time that the prohibition of direct contributions from companies and unions was a form of censorship, though dissenting judges felt that the ruling threatened the integrity of elected institutions. What is clear is that, with the first presidential election campaign since the law passed now well under way, candidates are taking advantage of the new rules in order to obtain greater financial muscle. Torrents of money, much of it anonymous, flooded into election battles across the country during mid-term elections shortly after the court decision. Now the Republican presidential hopefuls have gratefully adopted the new ruling, though the first job of the PACs is to direct their fire at those on their own side.

These PACs first came to prominence during the 2010 mid-terms, decried by the president and other Democrats as an effort by wealthy Republican donors and corporate interests to buy the elections. They are committees whose main purpose is to influence elections, using unlimited donations from corporations, unions or individuals, so long as the money is spent independently of the candidate’s campaign. The PACs have been out in force during the Republican primaries, with around two dozen corporations and individuals having donated $1 million or more to different committees. Harold Simmons, a Texas businessman, has donated more than $14 million to no fewer than three of the Republican hopefuls. Contributions have totalled more than $50 million, and the election proper has not even started yet.

The intensity of the campaigning, with more primaries approaching and the likely candidate no clearer, mean that the leading Republican candidates are increasingly dependent on the money spent on their behalf by the committees, according to a Federal Election Commission report. Mitt Romney, currently considered the frontrunner, spent close to $19 million in January alone, having only raised $6.5 million. One of his main rivals, Newt Gingrich, raised $5.6 million but spent close to $6 million. The PAC backing Romney, Restore Our Future, raised $6.6 million and spent close to $14 million, while Gingrich’s equivalent raised almost $11 million in funds. Indeed, it is only with the backing of the PAC that Gingrich had a presence at Super Tuesday, the day when the greatest number of states held their primaries, as the official campaign lacks resources. The PACs spent $11 billion in the ten voting states in the build-up to Super Tuesday. The money spent by the candidates and their PACs is already more than what was spent during the 2008 election.

The independence of these PACs has been called into question, however, as they have served as an ideal way for candidates to bypass donation limits to the campaign by donating to a supposedly distinct organisation. They also function as essentially part of the wider campaign, with Romney’s campaign and the Restore Our Future PAC using the same consulting company, while a handful of interconnected firms in the same office suite work for their the official campaign or the PAC. Regulation of the relationships between the campaigns and the committees has been largely ignored. Though rules on coordination prohibit spending “made in cooperation, consultation or concert with, or at the request or suggestion” of candidates, there is little evidence that this has been enforced.

The unlimited contributions from PACs are increasingly being used to pay for a string of negative advertisements as the Republican primary race enters the final strait. Kantar Media/Campaign Media Analysis Group data shows that PACs spent 72 per cent of their money on negative adverts, compared with 27 per cent for the campaigns. Restore Our Future, fighting Romney’s corner, once directed such adverts at Gingrich but have increasingly turned their fire on Rick Santorum of Pennsylvania, probably because they now view him as more of a threat. The Romney group has easily outspent its competitors, with the vast majority of their adverts negatives attacks on Santorum, though the $500,000 spent by a labour union in the critical state of Ohio on anti-Romney adverts meant he was outspent there. In 2008, just 6 per cent of the adverts during the Republican primaries were attacks on fellow Republicans, yet this time round the figure is more than 50 percent, according to an analysis of advertising trends. This primary campaign has been one of the most vicious election campaigns since the changes to the campaigning law in the wake of the Watergate scandal in the 1970s.

“Super PACs are left with no good choices,” said Brad Todd, a long serving Republican advertiser who worked for Romney and the party in 2008. “If they didn’t run comparison or contrast ads, they would have some very boring television.”

The Romney campaign and PAC have been at the forefront of this, spending two-thirds of their cash on negative ads. Gingrich and Winning Our Future have spent half of their funds on attacking other Republicans, while Santorum and the PACs backing him have spent a quarter of their funds on attack adverts. Of the 30,146 television adverts broadcast by Restore Our Future in the build-up to Super Tuesday, 29,642 were negative, according to trackers. In the two weeks immediately before the crucial primaries, the negative adverts ran 2,019 times to just 154 times for the positive ones. Much of the Romney PAC’s $14 million spend went on hammering Gingrich in the states of Iowa and Florida, while Gingrich’s PAC itself spent the majority of its funds on attack advertisements against Romney.

Though occasionally the candidates will take a shot at Obama, for the time being the nomination is the prize and Republicans are fighting themselves. They even launch attack adverts on each other for launching attack adverts, with a Restore Our Future advert calling Gingrich’s attacks “foolish, out of bounds and disgusting.” Though until recently attack adverts have been the domain of the PACs, as crunch time approaches the candidates themselves are indulging. A Santorum advert depicts Romney as Rambo; another candidate, Ron Paul, calls Santorum a “fake fiscal conservative”.

“The negative ads are not just more frequent – they also appear to be more vitriolic,” notes T.W Farnam in the Washington Post. “In 2008, one of the harshest ads Mitt Romney ran ahead of the Iowa caucuses criticised the immigrant position of John McCain, but only after calling him an honourable man. In 2012, such a nicety seems quaint.” Though some of the adverts classified as negative are legitimately comparative or critical, others are vindictive and trashy and serve only to irritate voters and decrease turnout, which has not increased from 2008 even though expectations were for an intense election as Republicans demonstrated their commitment to ousting Obama. Instead, they have turned their fire on themselves. “All of this invective is flowing in an election season when the Republicans had hoped to train their resources on beating President Obama,” writes Farnam. “Candidates typically save their sharpest attacks for the general election, largely sparing their fellow party members. But a wildly unpredictable nomination battle has upended that plan and dissolved the truce. It has happened largely because of the new rules governing campaign money.”

This proliferation of negative adverts seems to be doing little to help the Republican brand, and the candidates are likely only damaging each other in the build-up to the final run against Obama. Polls continue to point to low ratings for the Republican Party. “Obama’s advisers are looking on with glee as the Republicans bash one another,” wrote Farnam. “Romney in particular has been thrown off his strategy of attacking the president as he moves to take down other Republicans.” The Republican electorate has not responded well to the negativity of the campaign and the lack of focus on Obama. Dr Lee Miringoff, director of the Marist Institute for Public Opinion, believes that though there is still anti-Obama sentiment flowing, none of the Republican candidates have properly captured that energy. “It is unclear if the dislike of President Obama runs deep enough for a general election rally behind the eventual nominee,” writes Daniel Gaitan. “If not, it won’t matter. A fractured party is never good come election day.” The negative adverts seem to be doing little for the candidate who has used them the most, with a Gallup poll showing Romney trailing Santorum nationally by 36 per cent to 26 per cent.

Compounding the problems for the eventual nominee is the fact that due to the protracted and vicious nature of the race, the eventual winner will be playing catch-up when it comes to fighting Obama, whose team have steadily been rebuilding the coalition that campaigned so effectively for him in 2008. In Ohio four years ago, Obama had hundreds of staffers and a solid team in place well in advance of the March primary. This team then stayed in place and began preparing for the November election. The contrast is startling when one considers that this year Mitt Romney, for example, only had a team in place by the end of January and that team will then depart after the primary. The Republican footprint seems to be unable to match that of Obama, with that unlikely to change as Obama’s team can focus fully on November and are already putting local teams in place.

The Obama team also seems focused on a positive message, with members indicating that they will leave the negative adverts to the Republicans. “We don’t talk about negatives,” said Kim Kennedy, Obama’s neighbourhood team leader for Westerville. “We’re positive. We feel like we’re helping the president by helping our community. We never stopped supporting the president.” The 2008 election reached all-time lows in terms of negative adverts, with Obama in particular seeking a mainly positive message. It remains to be seen whether the Republicans will be able to change that policy this time round.

Yet one change in the Obama camp, probably caused by the energetic Republican adoption of PACs, is the move towards obtaining funding by the same means. The president told a gathering of Wall Street donors recently that the Democrats could not afford to stop accepting money from their own PACs, as it would mean running for re-election at a disadvantage. This is a u-turn from the Obama campaign, with the president vocally objecting to the ruling on campaign funding on numerous occasions. A fundraising drive is now well underway, with Obama recently attending a series of Wall Street fundraising events recently. Though he has not been able to match the success he had four years ago with donations from Wall Street, he has gone to nearly double the number of fundraisers former president George W. Bush had by this point in 2004 and raised $136 million so far, according to the Centre for Responsive Politics. Though his direct campaign fundraising is more than that of the Republicans, he lags behind in PAC fundraising. The committee backing him, Priority USA, had raised $4.2 million by January compared to the $36.8 million raised by Restore Our Future for backing Romney. With the percentage of total cash raised from small donations standing at 48 per cent last year, Obama has been unable to escape the feeling that he is likely to be unable to compete against a wealthy Republican PAC at election time. This has forced his hand. He has encouraged aides and cabinet members to help his PAC obtain donations, meaning that the vicious Republican fight, fought with immense sums of cash and attacks adverts, has at least affected Obama in one way.

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Posted in: Issues, Politics