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Shadow groups have spent nearly a quarter billion dollars on 2010 election: analysis

By John Byrne
Wednesday, October 27, 2010 12:50 EDT
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Karl Rove’s American Crossroads has drawn a lot of attention for its high-profile fundraising and lavish spending on congressional races. But Rove’s group, it turns out, isn’t the only one at the plate. A detailed analysis of campaign spending by cloak-and-dagger “shadow groups” — who are able to shift vast sums of money into campaign advertising and affect the outcome of competitive races — show that the groups collectively have spent nearly a quarter of a billion dollars in the 2010 cycle.

Money has already ruled the roost in American politics for years. But a recent Supreme Court decision, Citizens United, cleared the way for independent special interests groups to raise unlimited amounts of cash from companies, unions and individuals to run ads expressly supporting or opposing federal candidates for office.

So far this year, according to an ABC News report Wednesday, more than 230 independent groups have shelled out at least $227 million in 2010 federal election spending.

“We’re talking about a new kind of spending,” Taylor Lincoln of Public Citizen, told ABC News for a story Wednesday. “There are probably a lot of corporate spenders out there that, for fear for their reputation and a sense of what was right and the law of the land, didn’t want to play that game. Now they don’t have to fear any kind of legal retribution. That’s a big deal.”

ABC’s Avni Patel cites, for example, the First Amendment Alliance, a shadowy group funded “largely by oil and gas interests:”

The First Amendment Alliance, funded largely by oil and gas interests, is one of the groups ramping up fundraising and spending this election cycle. In 2008, the group spent $120,000 on radio ads, and raised most of its money from three donors, according to filings.

This year, the Alliance has raised $1.4 million, with at least $1.1 million of those receipts coming from the oil and gas interests, according to an ABC News analysis of the group’s filings to the IRS. More than a third of the industry cash has come directly from businesses, while the remaining contributions have come from individual contributions from industry executives and investors… In previous election cycles, the corporations had been constrained in making independent expenditures on ads that expressly advocated one candidate over another.

In the past month, the Alliance has spent $1.2 million on television ads aimed at defeating Democratic Senate candidates in Colorado, Kentucky, Nevada, and West Virginia, according to Federal Election Commission data available via Sunlightfoundation.com.

Most of the money, Patel notes, is being spent to oppose Democratic candidates.

“At the top of the group’s list of targets is incumbent Democratic Senator Michael Bennet of Colorado, who is fighting to keep the seat he was appointed to when Interior Secretary Ken Salazar joined the Obama administration,” Patel notes. “The group has spent $262,000 in ads opposing Bennet, and another $131,000 on ads supporting his challenger, Ken Buck, according to FEC data available via Sunlightfoundation.com.”

Democratic supporters have their shadow groups too. Las Vegas resorts and labor unions are pouring in huge swaths of cash to groups aiming at preserving the tenure of Senate Majority Leader Harry Reid (D-NV).

Patriot Majority, which is Democratic oriented, has spent $1.6 million in favor of Reid’s campaign, outspending even the Nevada Democratic Party. But they’re being dramatically outspent by Karl Rove’s American Crossroads and Crossroads GPS.

“The Patriot Majority ads have been competing with some $3 million in ad-spending targeting Reid from conservative-leaning groups, American Crossroads and Crossroads GPS,” Patel writes “The two organizations, which share a Washington, D.C. office and the same consultants, have spent nearly $30 million on races around the country, according to data available at Sunlightfoundation.com. While American Crossroads publicly discloses its wealthy donors, Crossroads GPS does not.”

Factcheck.org provides some background about American Crossroads, where Rove and two former RNC chairmen (Ed Gillespie and Mike Duncan) serve as advisors and directors:

Organized as a 527 committee under the IRS tax code, American Crossroads can collect unlimited contributions, including from corporations. Bradley Wayne Hughes, founder and chairman of Public Storage, and Trevor Rees-Jones, founder of Chief Oil and Gas, are among the group’s biggest donors. Both men have contributed more than $1 million, according to IRS records here and here. Public Storage is the largest self-storage company in the nation and one of the top contributors to the RNC, giving more than $500,000 in 2002. Chief Oil and Gas is a privately held gas company based in Dallas. …

In July, the group filed a statement of organization with the Federal Election Commission and is now filing reports with the FEC, instead of the IRS, Collegio says. The FEC reports provide information on contributors, as did the IRS reports.

American Crossroads and its affiliate — Crossroads GPS, a spinoff created in June — reportedly plan to raise $52 million by November. Crossroads GPS was formed as a 501(c)(4), a nonprofit that does not have to disclose its donors.

As much as $2 billion will be spent during this election cycle, The Washington Post reported earlier this week, which amounts to $4 million for every contested seat in Congress this year.

“House and Senate candidates have already shattered fundraising records for a midterm election and are on their way to surpassing $2 billion in spending for the first time, according to new campaign finance data,” the Post’s Dan Eggen wrote Tuesday.

“The frantic fundraising by candidates has largely been overshadowed in recent weeks by a tide of spending by outside interest groups, most of it targeting vulnerable Democrats,” Eggen continued. “Such groups could spend $400 million or more by Nov. 2.”

 
 
 
 
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