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Leslie Wayne

Leslie Wayne is an adjunct journalism professor at Columbia University and New York University. She's a former award-winning business reporter at The New York Times where she covered Wall Street, politics, banking industry regulatory reform, municipal finance scandals and the aerospace and military industries. Wayne was selected as the inaugural Donald W. Reynolds visiting professor in Business Journalism at Arizona State University in 2010.

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Obama wins – that is if you’re counting the race’s ‘celebrity war’

There is the “ground war” in politics, where candidates campaign for grassroots support. Then there is the “air war,’’ which is measured by the number of television commercials a candidate has.

President Obama, Beyonce and Jay-Z

President Obama, Beyonce and Jay-Z mingle at an exclusive fundraiser the power couple threw in September.

There’s another dimension to campaign 2012. Let’s call it the “celebrity war.” Both President Barack Obama and Governor Mitt Romney have a following among the Hollywood glitterati Star power provides glamour to a political campaign. It helps bring in big donations and celebrities can provide the entertainment that can please crowds, and attract them, too.

Who wouldn’t want to hear “The Boss,” Bruce Springsteen? He’s appeared with former President Bill Clinton in October in rallies in Iowa and Ohio. In Charlottesville, Virginia, in the middle of a swing state, he let loose with a free “Get Out the Vote” concert as part of an Obama rally.

On his website, Springsteen, who has lent his voice to the plight of the working class, endorsed the president. This isn’t the first time that Mr. Springsteen has lifted his guitar on behalf of Obama. He also did so in the 2008 election.

And who can forget Clint Eastwood’s performance at the Republican National Convention where he lambasted Obama by talking to an empty chair. That became one of his more memorable performances. Eastwood, who held political office himself as the mayor of Carmel, California, has long been a Republican supporter. Country singer Trace Adkins and comedian and TV host Jeff Foxworthy, both of whom celebrate their rural roots, have also opened for Romney at campaign rallies.

GOP Convention Clint Eastwood

At the RNC 2012, mystery speaker Clint Eastwood staged a mock conversation with President Obama.

While both sides have been welcoming celebrities to their fold, when it comes to sheer star power, Obama and the Democrats have clearly outpaced Romney and the Republican ticket. Hollywood has long been a bastion of Democratic support, and this year is no different.

Open Secrets, the website that tracks campaign donations, recently began to gather data on celebrity donors and found that celebrities have donated just under $600,000 directly to the President’s re-election campaign, another $2.4 million to the Democratic National Committee and $2.5 million to Priorities USA, the superpac backing Obama.

By contrast, Romney has attracted only $16,000 from celebrities, according to Open Secrets, which had no information on celebrity donations to the Republican party or pro-Romney superpacs. In fact, of the top twelve celebrity donors identified by Open Secrets, only one Republican – Vince McMahon, the wrestling titan whose wife, Linda, is running for the U.S. Senate – makes the cut.

Strolling down the red carpet for Obamaare the glamour couple of pop music – Jay-Z and Beyonce. Beyonce crooned “At Last” at Obama’s request at his inauguration and Salon.com reports that the two have raised “millions” for Democrats. Actor Morgan Freeman recently narrated an Obama ad and has given $1 million to Democrats. Tom Hanks and Rita Wilson, another part of Hollywood royalty have given over $173,000 to Democrats in this election cycle. Fellow royal couple Steven Spielberg and Kate Capshaw have also written big six-figure checks, while Will Smith and Jada Pinkett Smith are also donors. | More: Celeb contributions to Obama, OpenSecrets.org

Alicia Keyes vote campaign

Fans turned out to see Alicia Keys, about to take the stage at a get-out-the-vote rally in Raleigh, NC.


Eva Longoria, of “Desperate Housewives” fame is a co-chair of the Obama campaign and has been part of the campaign’s outreach to Latinos. Further Hollywood glamor comes in the form of Leonardo Di Caprio and George Clooney, long a Democratic stalwart. Madonna, Nicki Minaj, Gwen Stefani and, yes, even Snooki, of Jersey Shore fame are in the Obama camp. So are Bill Gates, Will Ferrell, Samuel L. Jackson, James Taylor, Barbra Streisand, Quentin Tarantino, Ben Stiller, Scarlett Johansson and talk show host Bill Maher.

Mark Hamill, who played Luke Skywalker in “Star Wars,’’ is an Obama fan, likening Obama to Obi-Wan Kanobi, the Jedi warrior.

Prominent in the Romney camp is Jon Voight, longtime actor and conservative activist. Olympic skater Kristi Yamaguchi is another celebrity donor. From the world of sports also comes hockey legend Bobby Orr, baseball All-Star Alex Rodriguez and NFL quarterbacks Peyton Manning and John Elway. | More: Celeb contributions to Romney, OpenSecrets.org.

Romney, who has more of a following among businessmen than among actors, still has a few to his name. Actor Robert Duvall held a fund-raiser at his Virginia estate that raised over $800,000, according to Salon. And an eclectic group of rock musicians are in the Romney camp, including Kid Rock, Ted Nugent and Kiss frontman Gene Simmons.

If Obama can claim Spielberg, Romney has another mega-producer, Jerry Bruckheimer. Lindsay Lohan and Donald Trump can add a bit of odd-ball color to the more button-up Romney-Ryan ticket. Muscleman Chuck Norris, another Hollywood conservative, issued a “dire warning” in making his Romney endorsement that an Obama victory could lead to “1000 years of darkness.”

Perhaps that’s a bit of hype. But Hollywood has never been known for shrinking from excess.

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Campaign watch: Candidates who dig into their own pockets

money in pocket

Looking for a fresh campaign finance story? Track monies spent by self-funded candidates.

Much has been made about money going to candidates seeking public office this year. But what about money flowing in another direction – money coming from the candidates? Whether it is for local, state or federal office, a sizable number of very wealthy candidates are digging into their own pockets and funding their own campaigns.

Perhaps it is the combination of ego, wealth and a burning desire to hold public office, but well-heeled candidates are able to avoid the whole time-consuming and often humbling process of meeting with donors and asking for money. Instead, by writing a check to themselves, they are freed from these constraints and can get on with the business of campaigning. Self-funded candidates provide another angle for reporters interested in covering campaign finance to pursue.

Open Secrets, the website that maintains campaign finance data, estimates that federal office-seekers have, so far, spent $130 million of their own money to gain public office in 2012 elections. Of course, some of those candidates have since fallen by the wayside, eliminated in primary races in spite of their fat wallets. One of the most notable was Texas businessman and the state’s Lt. Governor, David Dewhurst, who has a net worth of $177 million. He put $11 million of his own money into his primary bid for to be his state’s Republican U.S. Senate nominee and lost to a Tea Party favorite.

On first glance, funding one’s own campaign should seem to be an ideal situation. Not only does it free wealthy candidates from having to beg for dollars, it also frees them from federal and state limits on the size of campaign donations. While campaign contributions from individuals to candidates, the political parties and political action committees are capped at several thousands of dollars, a rich candidate can pour unlimited amounts of money into his or her own race.

And they have. A study by The National Institute of Money in State Politics found that between the years 2000 and 2009, candidates for state offices alone donated a total of $925 million. It also found, that money doesn’t always breed success. The same report found that self-funded state-level candidates won only 11 percent of the time. The same low success rate was found by Open Secrets, when it looked at self-funded federal candidates in the 2010 mid-term elections. It found that less than one in five were victorious.

One reason offered for this poor showing is that when a candidate relies on self-funding, he misses out on all the small meetings with donors and voters that enable him to get his message out early, get useful feedback and practice developing campaign themes.
Perhaps the biggest deep pocketed loser – in terms of sheer numbers – was Meg Whitman, the chief executive of HP and former chief executive of EBay, who spent $140 million of her own money in 2010 on a failed effort to be elected Republican governor of California. That same year, Linda McMahon, a Republican and an executive at World Wrestling Entertainment, spent $50 of her own money and lost her U.S. Senate race. This year, McMahon is trying again, although has put in a more modest $8.8 million of her own money so far.

Mitt Romney

By Flickr user BU Interactive News

Other notable check-writers have been Republican Presidential nominee Mitt Romney, who put $44 million from his sizable net worth into his failed 2008 bid for his party’s nomination. This year, he’s letting others pay the bills and has given only $52,500 to his campaign so far. One self-funder who has been both a winner and a loser is Jon Corzine of New Jersey, a Democrat. He self-funded his 2005 bid to be governor of that state to the tune of $42 million and won. In 2009, he put in $27 million of his own money in a re-election bid that failed.

But the big winner – and the biggest check writer – of them all is billionaire Michael Bloomberg, New York’s three-time Republican mayor. He poured $74 million of his own money and narrowly won in 2001. He spent another $85 million and won in 2005, and upped the ante and paid $90 million to win again in 2009. That totals just under $250 million.

But, if you are a billionaire 16 times over, as Bloomberg is, writing checks like these – ones that add up to a quarter-billion dollars – will hardly put a dent in his lifestyle and allow him to hold onto a job that he loves.

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Campaign watch: Following fierce Congressional district fundraising

linda mcmahon

Linda McMahon

So much of the attention in campaign finance circles has been on the enormous sums being raised by the two Presidential candidates – a big-dollar arms race that is shattering all fundraising records, and leaving donors tapped out and exhausted as Election Day draws closer.

Yet that’s not the only financial battleground in campaign 2012. With control of both the Senate and the House up for grabs, equally fierce fundraising efforts are taking place in key Congressional districts. Back in 2008, it cost an average of $1 million to win a seat in the House and $6.5 million to gain a Senate seat.  Today, double-digit millions are pretty much the norm in hotly contested races, even in Congressional districts. This rush of money provides fresh angles – and a raft of colorful stories – for reporters to explore.

A sharp escalation in cost took place in 2010, when control of the House switched to the Republicans and Democrats were barely able to retain control of the Senate. In those mid-term elections, a total of $1.27 billion was raised by all Congressional candidates. That year also saw the first effects of the Citizens United decision, which was handed down by the Supreme Court in January 2010 and opened the doors to new sources of campaign cash. In short order, a variety of independent expenditure groups sprung up, providing new channels of fundraising, outside of the candidates and the parties.

Of course, those numbers will easily be overtaken this year. So far, Congressional incumbents alone have raised more than $546 million, with Republican office-holders raising $337 million to the Democrat’s $209 million. It is not surprising that incumbents are rolling in the dough. Not only are they skilled in the art of fundraising, but year after year, more than 90 percent of incumbents are re-elected.

With odds like that, for donors whose primary motivation is in gaining access to members of Congress, investing in a candidate is a wise strategy. It’s a well-known Washington formula: Incumbency leads to cash and the combination leads to victory.

This year, the heat created by political polarization has created a number of fascinating Congressional races, rich material for stories. There are probably as many good stories as there are fascinating races. One interesting personality is Linda McMahon, a Republican who is making her second attempt to win a Senate seat in Connecticut. Along with her husband Vince, McMahon is an executive at the WWF, World Wrestling Federation Entertainment, and is pouring her millions to get a ticket to Washington.

capitol

U.S. Capitol by Flickr user cliff1066

In 2008, she spent $50 million of her own money in an effort to capture a seat and failed.  Now, she’s going after the state’s other Senate seat. But the wise businesswoman that she is, this time, she’s cut back her investment. So far, she’s spent $13 million of her own money on her race – a lot of money by anyone’s standards, except, perhaps, for McMahon.

Another fascinating race is the Massachusetts match-up between Republican incumbent Scott Brown and Democratic challenger Elizabeth Warren. It’s a race both rich in politics as it is in cash. Right now, with $53 million raised by the two candidates, it is the most expensive race in the nation. In the money race, Warren is currently ahead, with $28 million raised to Brown’s $19 million.

For two of the smallest states, those are huge numbers. It means that voters will be blanketed with television ads, campaign literature, and phone calls in the final months of the race. Perhaps history will be re-written and Warren will unseat an incumbent and McMahon will find that her investment pays off. Those are just two of the many fundraising stories on the Congressional level. Just take a look, you’ll find scores of others.

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Campaign watch: The final push for big money gains

lobbyist

Photo by Dreasmstime

Now that the political conventions are over and Election Day is less than nine weeks away, the money race has gone from high gear to warp speed. In 2008, President Barack Obama broke all money-raising records. This year, however, he is playing catch up to the formidable Republican campaign finance juggernaut.

For voters in states considered safe for either candidate, say Oklahoma for Republicans and New York for Democrats, the evidence of this money will hardly be seen. But for those voters in toss up states, whether they are Iowa, Florida, Colorado or Ohio, the onslaught of television ads, telephone calls, pollsters and all sorts of electioneering is about to head into overdrive.

The conventions have traditionally marked the time when the Presidential race is officially underway and the heavy campaigning begins. On the Republican side, it means that Romney can now begin to spend some $185 million that he had been precluded from using under campaign finance rules until he was his party’s official nominee. On the Democratic side, previous efforts to steer clear of raising super PAC money on principle were brushed aside at the convention when Rahm Emanuel, the campaign’s honorary co-chair, stepped down to begin working for Priorities USA, a Democratic super PAC that had been badly trailing its Republican rivals.

For campaign finance reporters, the conventions closing presents a good time to step back and take a hard look at the amounts raised by the two sides – money that must be spent between now and November if it is to have any value. The scorecard shows Democrats trailing Republicans by $60 million. This includes money raised by the two candidates, the super PACs that support them and the Republican and Democratic national committees. Super PACs operate outside of the official campaign and allow donors to give more money to support a candidates than the limited amounts that they can give directly to candidates or party committees under campaign finance law.

Both sides have already raised more than a half a billion dollars each: A total of $587 million by Democrats and $524 by Republicans. But there the resemblance ends. Democrats have been sending heavily and are now left with $131 in cash-on-hand. By contrast, Republicans have spent far less, which has given them a war chest of $197 million.

New fund-raising data shows that the Obama campaign and various Democratic committees have outraised the Republicans for this first time in three months — $114 million in August for the Democrats compared to $111 million for Romney and Republican committees. The Republicans have raised triple digit millions over the last three months to support Romney, while the Democrats have been in the double digit million range on behalf of Obama.

Yet it would be too early for the Obama campaign to break out the champagne. Jim Messina, Obama’s campaign manager, issued a press release saying that in spite of this fund-raising uptick, Obama was still getting “thrashed” by Republican super PACs that operate outside the official campaigns.

outside spending

A graph outlining outside spending totals from Open Secrets.

He has a point: The two big Republicans super PACs, Restore Our Future and American Crossroads, have vowed to raise $500 million before the election is over. For months, the two super PAC have been beating the drums for Romney, efforts that have been credited with helping him win the GOP nomination and elevating his profile nationally. The lone Democratic super PAC, Priorities USA, has raised only $25 million to date, which is why Emanuel was brought on board. His task is to go after heavy hitters who can write six and seven-figure checks. As before, Obama has relied on a network of small donors. A total of 53 percent of his donors gave under $200, compared to 22 percent for the Romney campaign. So it is the big dollars that both sides are now targeting in the final weeks.

While the outcome of the Presidential race remains uncertain, one thing is already known – for better or worse. The clear winner in campaign 2012 is outside spending, with super PACS taking the lead.

Statistics compiled by the nonpartisan Center for Responsive Politics, which maintains campaign finance data, show that outside spending by super PACS, nonprofit groups and other non-party entities by the end of the conventions had already exceeded the amount spent in the entire 2008 Presidential race. The record $300 million spent by outside groups in 2008 was already shattered by the time the last confetti was swept from the convention floor.

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Campaign watch: Tracking the monies tied to conventions

democratic convention

Photo by Flickr user Kelly DeLay

Unless the Hurricane Isaac completely swamps the Republican national convention, the end of the summer is going to be marked by two Olympian events in the world of politics: The Democratic convention in Charlotte and the Republican convention in Tampa.

There was a time, decades ago, when these quadrennial events actually provided political drama and suspense. Delegates came to the conventions not knowing who the party’s Presidential nominee would be. Floor battles would ensue and, once the melee ended, a Presidential candidate would emerge. Over time, the conventions have evolved into gigantic political love-fests. The Presidential nominee has pretty much already been selected and the delegate vote is a mere formality.

As a result, the conventions have become a showcase for party unity and one giant, four-day, infomercial for the nation. For reporters covering campaign finance, the big story about the convention is the various ways that candidates, parties, corporations and cities can use the convention as a way to fatten their coffers, gain influence and unite the rich with the powerful.

For starters, civic-minded taxpayers are kicking in to help pay for these events. Remember the check off on your tax returns asking whether you wanted $3 of your tax return to go to the Presidential Election Fund? If you checked it yes, part of that money goes to pay for the convention.  As a result of post-Watergate campaign finance reforms, each party is given an equal amount – $18 million per party – to finance their convention. Each party’s convention committee may not spend more than that on the convention.

While most people would think $18 million might pay for a swell party, that’s just the beginning of the financial story of the conventions. Another $100 million comes in directly from Congress to pay for security, such things as metal detectors, security cameras and perimeter protection.

Like the Olympics, cities bargain hard to land conventions. With 30,000 delegates, media, fund-raisers and political insiders expected to show up, conventions are an economic boom. This comes in the form of spending for hotel rooms, restaurants, taxis, as well as all the recognition that comes from having a major international event in your home town. As a result, each city forms a host committee. These committees accept millions in donations to help fund promotional materials, salaries of convention workers, entertainment and any number of things that the $18 million in federal funds does not cover.

delegates

Delegates for the Democratic National Convention. Photo by Jaime Puente.

Sometimes corporations donate cash or services to the host committee out of civic pride, or just to get their corporate logo made visible to the world. In other cases, conventions provide another way for big-money interests to mingle with top politicians – fertile ground for reporters on the money-and-politics beat. Google, Wal-Mart, A.T.& T., Time Warner and Coca-Cola have all lined up to play a prominent role at one of the conventions, or both, according to the Washington Post.

The Wall Street Journal reports that Republicans raised $57 million for their 2008 convention – most of it from corporations — and say they want to raise that amount or more this year. In 2008, corporations donated about $40 million of the $60 million raised for the Denver convention. This year, Democrats say they can raise around $37 million without corporate money, and are relying on outside groups backed by corporations to make up the rest.

The website for the Democratic Host Committee in Charlotte offers prospective donors a chance to win a trip to the convention for as little as a $5 donation. It also boasts of a variety of events that include gospel brunches, a salsa flash mob, and a visit to the NASCAR Hall of Fame.

The Host Committee website in Tampa Bay for the Republicans even features an online store where T-shirts, mugs and key chains with the RNC logo can be purchased.

Behind this frivolity is some deadly serious campaign finance business. Donors show up in abundance to be feted at lavish parties. Corporations spend freely to have access to decision makers from Congress and the White House on down. For campaign finance reporters, the challenge is to getting behind the doors to see which donors and which corporations are playing a big role. At the 2000 Republican convention in Philadelphia, for instance, former House Speaker Tom Delay held court in a series of luxury train cars just outside the convention hall where he met with key donors and corporate chieftains.

The importance of this gathering of the political powerful is underscored by a recent online webinar from the public relations firm Fleishman Hilliard. It tells how clients can benefit from showing up in Charlotte or Tampa: “ As the 2012 presidential election approaches, this summer’s Democratic and Republican political conventions are expected to bring a bounty of the nation’s most influential leaders. The events are a powerful and rare opportunity for organizations to engage with leaders from government, business, NGOs and advocacy sectors.”

For reporters wanting to delve into money-and-politics stories, there is no greater “target rich” environment than the Tampa and Charlotte conventions.

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Campaign watch: Dinner with Clooney and other overseas fundraising tactics

george clooney

By Flickr user csztova

Who wouldn’t want to have dinner in Geneva with George Clooney?

Hard to imagine anything more glamorous. And that is what the Obama campaign is hoping will be a draw for Americans living overseas with cash to spare. The upcoming event, sponsored by “Americans Abroad for Obama” is looking for an entry price of $20,000 per person, $30,000 per couple.

There are roughly six million American citizens living abroad in 160 different countries. As a group, they would be the 17th most populous state and, with numbers like that, they are increasingly becoming a target by the Presidential contenders looking for financial support. Republican Mitt Romney’s recent visit to London, Israel and Poland was part political – to burnish his foreign policy credentials – and part financial. Fund-raisers were held in London and Jerusalem, with the Israel visit adding a quick $1 million to the Romney effort. For reporters covering campaign finance, it’s also time to look abroad.

Overseas fund-raising traces its roots to Rudy Giuliani, the former New York mayor who held a London fund-raiser in 2007. When other politicians saw that new wellspring of campaign cash, they quickly followed. In 2008, John McCain held a fund-raiser at Spencer House, the St. James Place home that was built (from 1756 to 1766) by the first Earl Spencer, an ancestor of Diana, the late Princess of Wales. The house is described as “one of the most ambitious aristocratic town houses ever built in London.” In other words, the perfect place to encourage donors to write big checks.

London also saw Michelle Obama as the main attraction at a London landmark – the appropriately named Landmark London Hotel. At the 2007 event, Democratic bundlers who brought in donations of $23,000 or more were invited to a private reception with the future First Lady. This was followed in 2008 by a Notting Hill gathering organized by Elisabeth Murdoch, the daughter of Rupert Murdoch, on behalf of the Obama campaign. Those invited included such high-profile American expats as Gwyneth Paltrow.

Overseas events are popular ways of making American expats feel connected to the political campaign. Even more, expats often tend to be high wage earners, working in finance or for multi-national corporations, just the kind of voters who have money to donate.

It appears these expats are not shy about opening their wallets. In the 2010 presidential race, nearly $7 million was raised by Americans abroad – $5.4 million for Democrats and $1.5 million for Republicans. Figures compiled by Sarah Starkweather of the University of Liverpool show a steady increase in overseas donations, with the largest amount coming from Americans in Europe. By contrast, in the 2004 Presidential election, both parties raised less than $1 million combined from overseas donors.

obama london

By Flickr user Charles McCain

Through May 2012, Democrats raised $3.1 million abroad compared to $1.3 million for Republicans, according to the Boston Globe. That, however, was before Romney’s latest haul.

Federal law allows only U.S. citizens and green card holders to contribute to political campaigns. Foreign nationals who are Democratic or Republican sympathizers cannot participate in these events, nor offer their time and services. That would be considered an “in-kind” campaign contribution and is prohibited. Generally, many of the invitations to these events request that American passports be shown at the door.

No candidate wants to be accused of accepting foreign money, especially in light of the “Chinese money” scandal that erupted a decade ago, resulting in civil penalties and a lot of headaches for the Democratic National Committee.

There are pitfalls, however, as Romney learned. One of the co-hosts of his London event was scheduled to be Robert Diamond, who was forced to step down as chief executive of Barclay’s bank after the bank settle charges it had manipulated a key interest rate. Diamond also stepped down from hosting the Romney event.

Still, where there is money, politicians will follow. Two of Romney’s sons have held fund-raisers in Hong Kong. Nine of Obama’s top bundlers are American expats – as a group, they have raised $2 million. And the Obama campaign has sent surrogates to fund-raisers in Shanghai, Paris and London. For instance, in early July, Obama sent former Navy secretary Richard Danzig to host a $750 ticket fund-raiser in Paris.

Mr. Danzig may be a draw. But when it comes to serious fund-raising, there is nothing like the star power of George Clooney.

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Campaign watch: Tracking the super-weathly donors

sheldon adelson

Sheldon Adelson, chief executive of Las Vegas Sands Corporation, is just one of the wealthy donors in the 2012 election. Photo by Wikimedia Common's user Bectrigger

When one thinks of who wields behind-the-scenes power during a political campaign, it would be easy to pick out an influential party leader, pollster, fund-raiser or strategist.

Not this year.  One of the most important people in Campaign 2012 may well be a casino magnate, Sheldon Adelson, who has vowed to spend up to $100 million of his $25 billion fortune to defeat President Barack Obama and make sure that Republicans get elected from the top of the ticket to the bottom.

For reporters covering the Presidential and other races this year, one line of reporting is not just focusing on the candidates themselves but on a new crop of super-wealthy donors who are playing an increasingly important in the wake of the Citizens United decision that has opened the floodgates to a flow of  unlimited money into the campaigns. All across the country, super donors are being identified and written about.

Heading the list is Adelson, chief executive of Las Vegas Sands Corporation, which gets the bulk of its earnings from casino operations in Singapore and Macao. With more money than most people can dream of and a burning desire to oust Democrats, Adelson is turning into one of the hidden – or increasingly not-so-hidden – power brokers of this campaign.  Adelson is best-known for his pro-Israel policies, from a vantage point to the right of the conservative lobbying group American Israel Public Affairs Committee, and is supporting candidates who share his views on that topic and on conservative issues in general.

Already, Adelson has spent $20 million to prop up the Presidential hopes of Newt Gingrich in the Republican primary. His money went to a Gingrich super-pac that aired a series of attack ads on Mitt Romney in the Iowa caucuses than many say lead to Romney’s second-place showing. While no fan of Romney, Adelson has turned his attention to the Romney campaign and to making sure that money flows from his checkbook to the pro-Romney super-pac, Restore Our Future, and other conservative campaign committees.  Mr. Romney and his top aides have also met with Adelson at his Las Vegas office to discuss Adeleson’s political views.

In prior years, Adelson might not have had the opportunity to hold such sway.  But the 2010 Citizens United decision now allows issue groups to spend unlimited amounts advocating the support or defeat of candidates. That, in turn, gave rise to super-pacs and the ability of Adelson and others like him to play a bigger role than ever.

election spending

Stop by OpenSecrets.org to learn more details about outside spending in the 2012 election.

Adelson’s political spending has reached $60 million on is growing. This includes the $20 million on Gingrich, $10 million to the  pro-Romney super-pac and another $10 million to one headed by Republican operative Karl Rove, along with $10 million to an effort headed by the conservative Koch brothers and another $10 million on a super-pac focusing on Republican Congressional candidates.

Adelson may be the biggest, but he is just one of the many sugar daddies who are worth watching this year.  It turns out that nine of the top ten individual donors are wealthy individuals supporting Republican candidates: businessmen from Texas, hedge fund managers on Wall Street, and energy company executives.

Statistics kept by Open Secrets.org, a nonprofit that tracks money in politics, show that the only Democrat ranked in the top 10 of super donors is Jeffrey Katzenberg, the Hollywood mogul and head of Dreamworks, who gave $2 million to the pro-Obama super-pac Priorities USA Action.   So far,  the pro-Romney super-pac  has raised $61 million, compared to $14 million raised by the pro-Obama super pac.

There are many reasons for this imbalance between Democratic and Republican super donors. On the most basic level, there have been strong historical ties between wealthy individuals and the Republican party.  Even more, Democrats, including President Obama, had earlier denounced the growth of these super-pacs.  Many wealthy Democrats see super-pacs as an unwelcome additional to the political scene and are steering clear.  That’s hardly the case with Adelson, and a wealthy crew of like-minded super donors with plenty of money to spend.

 

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Political campaign committees, non-profit entities: What’s the difference?

What is a nonprofit entity and what is a campaign committee?

That question is now being put to the Federal Election Commission by Democrats who are taking aim at Karl Rove’s Crossroads GPS, a nonprofit entity which aims to raise $300 million or so to attack President Barack Obama and other Democrats.

Karl Rove

Karl Rove. Photo by Flickr user JD_WMWM

Crossroads may act and sound exactly like a political campaign committee to Democratic ears. But, it has been organized as a tax-exempt social welfare group — a 501(c)4. Under Internal Revenue Service requirements, this means it must not be organized for the “primary purpose” of engaging in political activities but as a charitable organization for the public’s benefit. The increasing use of nonprofits is one of the many ways that large sums of money are entering the Presidential race in the wake of the Citizens United decision, that opened the doors to large contributions from deep-pocketed donors.

As a 501(c)4 organization, Crossroads GPS is not required to disclose its donors, unlike campaign committees, whose donors must be disclosed to the F.E.C, and kept in a publicly-available data base. Even the so-called Super Pacs, which are getting all the attention this campaign season, have some limited disclosure requirements.

Now Mr. Rove’s efforts are being attacked on two fronts: There are signs that the I.R.S. is taking a harder look at groups like Crossroads GPS. And, President Obama’s lawyers have sent a letter to the F.E.C. saying that Crossroads GPS is not a “social welfare” group but a “political committee” and subject to federal reporting requirements.

Already, Republicans have begun to close ranks and are trying to head off the I.R.S. Republican Sen. Orrin Hatch and Senator Minority Leader Mitch McConnell have begun to push back in speeches. In a letter to the I.R.S., Mr. McConnell has called the agency the “speech police” for questions it has raised after a number of Tea-Party related groups have applied for 501(c)4 status.

CrossroadsGPS 502(c)4

The website of the pro-Republican group Crossroads GPS is full of ads and links to social media.

Just last week, the lawyer for the Obama campaign took the Democrat’s complaint to the F.E.C. In filing the complaint, Obama campaign attorney, Robert Bauer, also wrote to a courtesy letter to Mr. Rove saying it was “obvious to all” that Crossroads is really a political committee.

In his complaint to the F.E.C., Mr. Bauer said that “Under the pretense of charitable activities, Crossroads has tried to shield its donors – wealthy individuals, and corporations who may be pursuing special interest agendas.”

SuperPacs may have gotten all the attention in this election cycle. But a joint investigation http://www.iwatchnews.org/2012/06/18/9147/nonprofits-outspent-super-pacs-2010-trend-may-continue by the Center for Responsive Politics and the Center for Public Integrity shows that when it comes to money, 501(c)4s are not to be ignored.

In the 2010 midterm races, 501(c)4s outspent SuperPacs by a 3 to 2 margin, and that trend may well continue in the current presidential race. The investigation found that the nonprofits spent roughly $95 million in 2010, compared to $65 million for SuperPacs.

Conservative groups 501 ( c) 4s vastly outspent liberal ones – rack up $78 million for the conservatives and $16 million for the ones on the left.

For reporters covering campaign finance, the issues are clear: Not all the action is with SuperPacs. Given the secrecy surrounding 501( c)4s – they do not have to report donors nor their spending – both sides will be fighting hard. Hard, by Mr. Rove and Republicans, to keep Crossroads GPS as it is. Hard by the Democrats to pry open its books.

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Campaign watch: The impact of the Presidential Election Campaign Fund

voting ballot

Many voters elect to contribute $3 to the Presidential Election Campaign Fund. Photo by iStock.

What candidate would want to turn down $90 million in free cash to fund a race for the White House?

Yet that is exactly what both President Barack Obama and the presumptive challenger, Mitt Romney are expected to do this election year. The money would have come courtesy of civic-spirited American taxpayers who check off the box at the top of their income tax form directing the U.S. government to put $3 on their behalf into the Presidential Election Campaign Fund.

Never heard of it? My guess is that most voters have not. Yet, until the 2008 election, it was a major source of funds for every Presidential candidate. The Presidential Election Campaign Fund was established in 1976, after the Watergate scandals, to try to reduce the influence of money in politics.

The fund worked like this: Each major party candidate (and some minor candidates as well) were eligible to get equal amounts of public money for their Presidential primary and general election bids. In accepting the money, they had to agree to stop fundraising directly for their campaign. They also had to agree to spending limits and requirements that the money be spent throughout the United States and not just in battleground states. 

And every four years, candidates did just that. Large sums of money flowed into political party committees that could advocate for Democratic and Republican candidates. That’s the money – soft dollars, 527s, party fund-raising committees – that got all the attention. Little known was that once the two party nominees took the federal funds, money coming directly into their campaigns had to stop.

For decades, the ability of a Presidential candidate to qualify for public funds was considered a sign of strength. Now it is considered a sign of weakness.

The big break with this tradition came in 2008, when Obama became the first candidate to forgo the matching funds, and he did so for both his primary and general election races. Obama’s record-breaking fund-raising – he raised more than $750 million over all – dwarfed whatever he was going to take in public funds. By contrast, challenger John McCain, accepted public funds for his general election bid, and was outspent by the Obama campaign four-to-one. (McCain, however, did turn down the funds for his primary race.)

In their 2008 presidential primary bids, Democrats John Edwards and Joe Biden accepted the public funds. In 2004, both President George W. Bush and Sen. John Kerry, took the public money in the general election.
This year, a pot of $90 million is available to Obama and Romney. Neither shows any inclination to take it.

In this year’s financial arms race, both campaigns and their allies are on track to shatter all previous fund-raising record. The Center for Responsive Politics, which tracks money in politics, estimates a record $6 billion will be raised for races up and down the ticket. Obama alone is boasting that his campaign will account for $1 billion of that. Romney’s camp is saying pretty much the same.

Fred Wertheimer, founder of Democracy 21, which advocates for campaign finance reform, has long argued that the Presidential Election Campaign Fund has not kept up with the times. He said the public fund is a good way to reduce a candidate’s dependence on special interest money. The irony is that the only way to make public funding attractive again is to greatly increase the amount of money in the pot.