The 'Show Me the Money' Campaign

By Bob Burnett

Six months before the Nov. 6 presidential election, Barack Obama leads Mitt Romney by three percentage points. The most common explanation for the closeness of a race that should be Obama’s to lose is the weak economy. Another explanation is the polarization of electorate: the right has solidified behind Romney but the left hasn’t embraced Obama with the same fervor. But money is the culprit; Republicans have spent more money to affect the final outcome.

It’s estimated that as much as $8 billion will be spent this election cycle. That compares with $3 billion in the 2010 election – a record for a mid-term election – and $5.3 billion in 2008. Most observers agree that the reason for the 50% increase is the 2010 Supreme Court Citizens United ruling that permitted unlimited political expenditures for independent groups – corporation and interest-group spending increased by 500% in the last mid-term election.

Political spending in 2012 will likely follow the pattern established in 2008; 87% of ads will be concentrated in 11 battleground states such as Colorado, Florida, Ohio and Pennsylvania. If you’re offended by the humongous amounts of money being spent on political campaigns, you’re not alone. A 2010 CBS News/New York Times poll found that 86% of respondents felt it was important to limit campaign spending. Nonetheless, Americans are trapped in the byzantine system. To prepare for the ad avalanche, it’s useful to examine where the money comes from.

The most authoritative source of information on political funding is “OpenSecrets.org.” There are four sources of funds for a presidential campaign: donations to a campaign, political Party, or political action committee, and independent expenditures. According to Open Secrets, as of March 31, Obama had raised $191,671,860 from direct donations compared to Romney’s $86,631,381.

The Democrats also led in party donations ($416,604,408 to the Democratic Party and $175,719,337 to the Democratic National Committee); Republicans reported $340,429,878 to their party and $141,415,033 to the Republican National Committee. Thus Obama has a $215 million lead over Romney and is well on his way to raising the $1 billion that his presidential campaign committee has set as its target.

While it would seem that the president has a safe fundraising lead over his Republican opponent, that doesn’t take into account contributions made to PACs and independent groups. As of May 1, political action committees have expended $114,147,398 and independent groups have spent $20,150,136. The problem for Obama (and Democratic candidates, in general) is that conservatives fund most of these organizations. Open Secrets reports that of the top-ten “Super PACS” (entities that “raise unlimited sums of money from corporations, unions, associations and individuals”), the top seven are conservative and the number one Super PAC, “Restore our Future” – a pro-Romney organization, has raised $53,549,228 – more than the other nine combined.

The Super PACs most often discussed are the Crossroads groups run by Karl Rove: American Crossroads and Crossroads GPS. Rove’s objective is to raise $300 million and, so far, he’s garnered more than $100 million. The bulk of this will be raised in Crossroads GPS, which was established as a 501(c)(4) “charitable” organization and, therefore, does not have to reveal its donors. (Recently, political commentator Cenk Uyghur reported that 90% of Crossroads’ funds come from 24 conservative donors.) A similar organization is “Americans for Prosperity” funded by the notorious Koch brothers.

The Washington Post reported that of the political ads run so far, 90% — $28.5 million – have been funded by 501(c)(4) entities that do not have to disclose their donors. That’s why, if you look at the list of top donors to outside political spending groups you won’t find the names of conservatives Charles and David Koch; we know they are spending millions to defeat Obama, but they are doing it behind the scenes.

To counter this tide, Obama formed his own Super Pac, Priorities USA, which has raised far less than have the conservative Super PACs, $8,995,171.

One might argue that the net effect will be that during the 2012 election Republicans will have the same amount of money to spend as Democrats. But a large amount of the Republican funds will not be identified as such; they’ll come from organizations like Crossroads GPS and Americans for Prosperity. These groups will continue to run stealth ads blaming Obama for the sputtering economy or high-energy prices or border violence or whatever. That’s why Obama thinks he needs to raise $1 billion; to counter the conservative Super PACs and their pernicious stealth attack ads.

One of the most famous quotes of the Vietnam War came after the battle of Ben Tre, when a US military officer said, “It became necessary to destroy the town to save it.” That’s the situation Obama and Democrats are in – including those of us who want to place commonsense limits on political expenditures. In 2012 it may be necessary to destroy the political process in order to save it.

Bob Burnett is a Berkeley, Calif., writer and a retired Silicon Valley executive. Email bobburnett@comcast.net.

From The Progressive Populist, June 15, 2012