• How outside money was poured into governors' races

    By Paul Abowd and Andrea Fuller, The Center for Public Integrity

    Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

    The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Democrats won seven of the 11 contests, but the GOP managed to pick up one seat in North Carolina, long held by Democrats.

    The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

    Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the latest Federal Election Commission reports, Adelson is the top donor to super PACs in 2012, doling out more than $93 million along with his family.

    Conservative billionaire David Koch — who has not made any contributions to super PACs — was the organization’s third-highest donor, writing two checks totaling $2 million. Koch is co-owner of the second-largest privately held company in America, Koch Industries, an energy conglomerate.

    Seven of the RGA’s top 10 donors are corporate executives who gave at least $1 million. Two of them, Paul Singer and Kenneth Griffin, are hedge fund managers.

    Six of the Democratic Governors Association's top donors were unions. The American Federation of State County and Municipal Employees topped the DGA donors list, giving about $1.3 million. The Service Employees International Union gave about $1.1 million, while the American Federation of Teachers gave at least $772,000.

    Top corporate donors to the DGA included pharmaceutical giants Pfizer, which gave almost $700,000, and AstraZeneca, which contributed nearly $600,000. The companies also gave comparable sums to the RGA. The DGA also got corporate support from health insurer United Healthcare Services Inc., and AT&T.

    The DGA raised nearly $50 million, the organization's "strongest fundraising year ever," according to spokeswoman Kate Hansen. 

    'Enormous impact on state elections'
    The DGA and RGA have devised national strategies for collecting unlimited funds from unions, corporations, and wealthy individuals, and funneling the money into state races. Both have used networks of state-based PACs to maneuver around various state limits on campaign giving.

    “They’ve had an enormous impact on state elections across the nation,” said Ciara Torres-Spelliscy, an election law expert at Stetson Law School. “In many states they were consistently a top spender.”

    The circuitous methods used by both organizations to inject corporate and union cash into state races and mask the identity of its donors have raised legal questions, prompted lawsuits, and tested the capacity of state election boards to enforce limits on outside spending.

    Both organizations have told the Center for Public Integrity that they fully comply with campaign finance laws, and that they report their donors and spending to the IRS.

    The RGA set up a federal super PAC called RGA Right Direction, and fed it with $9.8 million in contributions. The super PAC — another type of organization that can accept unlimited donations from individuals and corporations — then made a large contribution to Indiana Republican candidate Mike Pence, and bought ads in tight state races in Montana, Washington, New Hampshire, and West Virginia.

    Super PACs are normally used to spend money on federal campaigns. By passing the funds through the super PAC, which reported its sole donor as the RGA, the association effectively shielded the identities of the donors who paid for ads in the state races.

    In North Carolina, the RGA spent millions of dollars, directly from corporate treasuries to win in a state long led by Democratic governors. The unlimited contributions from dozens of corporations across the country went toward ads supporting Republican candidate Pat McCrory, who won convincingly over Democratic Lt. Gov. Walter Dalton.

    The DGA, too, used a network of state-affiliated PACs, to fund ad campaigns in battleground states like Montana and North Carolina. It was the primary funder of a PAC called North Carolina Citizens for Progress, which purchased ads attacking McCrory.

    While America’s wealthiest corporate executives tend to prefer the RGA, and unions give almost exclusively to the DGA, some donors played both sides this election.

    Agricultural giant Monsanto, credit card company Visa and health insurance company Humana were large donors to both the RGA and DGA — each giving about $100,000 to both groups.

    Despite the Republicans' win-loss record, RGA spokesman Michael Schrimpf called 2012 "a successful year by any standard" with Republicans now in control of governorships in 30 states. Most of those gains, however, came in 2010. The North Carolina win and the failed effort to recall Scott Walker, Wisconsin's Republican governor, in June, were high points for the GOP this year.

    In addition, in five states targeted by the RGA where it lost, the Democrats held advantages unrelated to fundraising. 

    Missouri and West Virginia featured Democratic incumbents. Three other states — Montana, Washington and New Hampshire — had open seats where a Democrat had previously been in power.

    The two organizations will put their fundraising powers to the test again in 2013, when Virginia and New Jersey choose their next governors.

    Michael Beckel contributed to this report.

    The Center for Public Integrity is a non-profit independent investigative news outlet.  For more of its stories go to publicintegrity.org

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  • Obama: Consider amending constitution to undo court ruling on political spending

    By Michael O'Brien, NBC News

     

    TAMPA, Fla. -- President Barack Obama suggested he would support beginning an effort to amend the U.S. Constitution to undo a Supreme Court decision that gave way to the rise of so-called "Super PACs."

    In a chat on the social media website Reddit, the president told readers that he would back an amendment to counteract the impact of the court's ruling in Citizens United v. FEC, a 2010 decision that did away with limits on corporate and labor spending in elections.

    "Over the longer term, I think we need to seriously consider mobilizing a constitutional amendment process to overturn Citizens United (assuming the Supreme Court doesn't revisit it)," the president wrote. "Even if the amendment process falls short, it can shine a spotlight of the super PAC phenomenon and help apply pressure for change."

    The president said he still supports the Disclose Act, which would force greater transparency from outside spending groups in disclosing their sources of funding. Obama also emphasized his support for banning lobbyists from the practice of "bundling," or raising large sums of contribution from a group of donors.

    The 2012 campaign has seen an unprecedented influx of political spending due to the rise of super PACs, which are able to raise and spend unlimited sums on electioneering. Many of those groups also have twin nonprofit arms, which are able to raise and spend millions on "issue advocacy" without having to disclose its funding source.

    Both Obama and his Republican opponent, Mitt Romney, have super PACs spending on their behalf this cycle. Obama reluctantly endorsed his, Priorities USA Action, after having initially opposed the groups;

  • Top CEOs donate to Romney over Obama by 4-1 margin

    By Michael O'Brien and Katherine Faulders, NBC News

     

    The chief executives of America’s top corporations have thrown their financial support to Mitt Romney over President Obama by more than a 4-1 margin, according to a review of federal records conducted by NBC News.

    The presumptive Republican nominee’s presidential campaign has received almost $322,000 in direct donations from the CEOs of the companies listed on the annual “Fortune 500” list of the biggest U.S. companies.

    Charles Dharapak / AP

    Republican presidential candidate Mitt Romney delivers a specch in Jerusalem July 29.

    By comparison, the Obama campaign has raked in $75,500 in contributions this election cycle from CEOs of the companies included on the list, according to records through the second quarter of 2012 on file with the Federal Election Commission.

    While the sums are but a drop in the bucket relative to the hundreds of millions of dollars raised by both campaigns, they paint a picture of where the upper echelons of corporate America’s sympathies might lie at this point in the campaign. Overall, the Obama campaign has raised about $300 million in total, and the Romney campaign has collected roughly $153 million.

    Federal records indicate that 147 CEOs have made some level of contribution directly to either the Obama or Romney campaign. Eighteen of those individuals contributed to Obama; 129 gave to the Romney campaign. Many of the CEOs – though not all of them – donated the maximum $5,000 to their candidate of choice, hewing to laws limiting contributions to $2,500 each for the primary and general election campaigns.

    "People who support Mitt Romney do so because they support his pro-growth, pro-jobs agenda for the country," Romney spokeswoman Amanda Henneberg said. A spokesman for the Obama campaign declined to comment for this story.

     

    These donations only paint a small part of a broader portrait of how the business community has sized up the election. Some of these donors have contributed thousands more to joint fundraising committees for either Obama or Romney, which funnel donations to the respective national party infrastructures and to state parties. These funds weren’t included in NBC’s tally because they aren’t directly under the control of either presidential candidate, and conceivably could be used for other candidates, like Senate races.

    Romney’s advantage with these CEOs isn’t surprising. This same group of 500, not all of whom were CEOs of their respective companies in 2008, also favored Republican presidential nominee John McCain over Obama that year by a nearly 2-1 margin, $205,800 to $93,300. Fewer of the CEOs on the 2012 Fortune 500 gave in 2008; 112 total donated, 31 of whom gave to Obama and 81 of whom gave to McCain.

    While Republican presidential candidates have traditionally raised more money from corporate America than Democratic ones, some business leaders have complained about the federal health-care law and Dodd-Frank financial regulatory reform pushed by the Obama administration. What’s more, Romney is a familiar figure to many in the business community and has stressed his business background at Bain Capital as one of his chief credentials in his current White House bid.

    To that end, some of Obama’s 2008 CEO donors have, so far, declined to cut a check for him this cycle. But a sizable chunk of McCain’s 2008 chief executive donors haven’t given to Romney, either.

    There are some executives who switched sides, too. Three of them – Massachusetts Mutual's Roger W. Crandall, Norfolk Southern's Charles W. Moorman IV and Baxter International's Robert L. Parkinson Jr. – switched from supporting Obama in 2008 to Romney in 2012.

    One CEO, Paul E. Jacobs of Qualcomm, supported McCain in 2008 but has donated only to Obama in 2012.

    While the two presidential campaigns have received almost $400,000 in direct support from the CEOs, it’s likely that corporate involvement in the presidential election is even more extensive. In addition to donating the maximum to Romney or Obama, some of the CEOs have contributed additional thousands to victory committees, which distribute additional funds to the national parties and several state party organizations.

    The ascendancy of super PACs – which can accept unlimited contributions – in the time since the 2008 election opens the door to greater corporate involvement, too.

    For instance, Las Vegas Sands CEO Sheldon Adelson checks in at No. 278 on the Fortune 500 list, though existing FEC records reflect no direct contributions to the Romney campaign this cycle through June.

    That isn’t to say that he hasn’t impacted the 2012 election. Adelson singlehandedly contributed $5 million to the pro-Romney super PAC Restore Our Future (this after investing even more in a super PAC supporting Newt Gingrich during the Republican primaries). Adelson has suggested he’s willing to spend as much as $100 million to defeat Obama this fall.

    Many super PACs have also established twin, nonprofit groups as so-called “social welfare organizations” that, under existing federal law, can spend and receive millions on advocacy work, as long as they don’t directly support or oppose a candidate. There’s no way to know how much these groups – like Crossroads GPS, the 501(c)(4) arm of the conservative American Crossroads super PAC or the pro-Obama Priorities USA – have received from these CEOs or other corporate titans. Additionally, a corporation itself can give directly to these groups.

  • McCain sees new effort to reform campaign finance

    Former presidential hopeful John McCain talks about the impact private donations have on the presidential campaign.

    By Michael O'Brien

     

    Arizona Sen. John McCain predicted a renewed effort of reform the nation's campaign finance laws as an outgrowth of the unrestrained influx of donations in this year's presidential campaign. 

    The Supreme Court's 2010 decision in the Citizens United case, which struck down many of the restrictions on political spending and spurred the advent of so-called "super PACs," was one of the worst in modern history, McCain said. 

    "I think there will be scandals as associated with the worst decision of the Supreme Court in the 21st Century — uninformed, arrogant, naive," McCain said on NBC's "Meet the Press."

    "The fact is that the system is broken," he later added. "I predict to you that there will be scandals, and I predict to you that there will be reform again."

    McCain has long been an advocate of campaign finance reform; a landmark 2002 campaign finance law bearing his name was the subject of the legal challenge that led to the Citizens United ruling. 

    That decision did away with many of the limits on the magnitude of political contributions, fueling an inflation in the cost of campaigns, particularly on the federal level. Super PACs like American Crossroads, Restore our Future and Priorities USA Action have been able to spend tens of millions of dollars already on the campaign. They're able to cull their support from a handful of wealthy donors, the size of whose report is sometimes clouded by twin nonprofit groups associated with super PACs, which don't have to disclose their donors. 

    One of the largest such donors has been Sheldon Adelson, the casino magnate who gave over $10 million to a super PAC in the primary that supported Newt Gingrich for president. Adelson's since pledged at least $10 million to the pro-Romney super PAC, Restore Our Future. 

    McCain fretted earlier this week that Adelson's contributions would be tantamount to "foreign money" entering the campaign, since Adelson's fortune is built in part by revenues from overseas casinos. 

    McCain said on Sunday that he's worried about Adelson's influence, but no more so than the influence of organized labor spending or other donors' impact on the campaign.

    "Not any more than other people who will give lots of money; not any more than the trade unions, the labor unions have. The whole system's broken, and there's a wash. I don't pick out Mr. Adelson any more than I pick out Mr. Trumka," he said, referring to the AFL-CIO's president.

  • In Calif. redistricting experiment, how much better off will Democrats be?

    By Tom Curry, msnbc.com National Affairs Writer

    In two weeks, California voters will take part in an intriguing electoral experiment –and while House Democrats are likely to emerge better off from it, the question is how much better off? Will they see a net gain of two or three House seats? Or perhaps a five, six, or seven seat score?

    When Californians cast their ballots in the June 5 primary, they’ll be in new congressional districts drawn not by political insiders, as was done in the past (and as is still done in most states), but by a citizen panel.

    Map of California's redrawn congressional districts.

    For decades, House members and their allies in the state legislature used gerrymandering to protect incumbents of both parties. That changed when voters adopted citizen redistricting in 2008.

    As governor, Republican Arnold Schwarzenegger “pushed redistricting reform for the purpose of creating competitive seats” and “Republicans had dreamed that the whole state would become competitive as a result of this process,” said Bruce Cain, professor of political science at the University of California, Berkeley, and an expert on redistricting in the state.

    Three other ingredients are being added to that redistricting experiment: the retirement of seven incumbents (four Republicans and three Democrats) from the California delegation, a 28 percent increase in the state’s Latino population since 2000 (although the increase in actual Latino voters doesn’t necessarily match the increase in the overall Latino population), and a new top-two balloting system under which only the leading vote-getters in each congressional primary advance to the November ballot.

    Decision 2012 and the myth of the 'Catholic vote'

    Only one seat in California changed hands in the last ten years, but according to the latest ratings from the non-partisan Cook Political Report, there are now four Democratic and five GOP House incumbents in competitive districts. At this same point after redistricting in 2001, Cook rated only two California House races as competitive.

    “The redistricting definitely favored the Democrats and nobody who has analyzed it thinks differently,” said Cain. “It would be shocking if the Democrats don’t pick up some congressional seats,” he said, but added, “I’d be surprised if the Democrats do better than (a net gain of) four or five.”

    “California has been a fairly stable market for congressional races over last decade,” said Dan Conston, the communications director for the Congressional Leadership Fund, a Republican Super PAC that had more than $5 million in cash as of April 15 to spend on House races.

    “Under the new maps, the entire field has been shaken up and California will now be one of the key battlegrounds for control of the House for the next decade,” he said.

    Roll Call's Nathan Gonzales and Cook Political Report's David Wasserman talk about redistricting and whether Democrats can win back the House.

    Conston added, “When you consider the national battlefields, it is clear that if we perform well in California, it is very difficult for Democrats to have any shot of reclaiming the majority.”

    Thanks to the Citizens United decision in the U.S. Supreme Court, and other federal court rulings, mega-donors in California and elsewhere can give unlimited money to Super PACs (both Democratic and Republican) bypassing donation caps to candidates or party committees.

    Conston said that the number of newly competitive seats in California has “piqued donor interest. That is why we set up a separate fund within the Congressional Leadership Fund where all resources raised go to our California efforts.”

    Among the Democrats at whom Republican groups will be aiming their ads are Rep. Lois Capps and Rep. John Garamendi, both of whom will now be competing on less Democratic-leaning turf than their present districts.

    Leaders of the Democratic Super PAC, which works on House races, are also making California their focus.

    In its fund raising pitch to donors, the House Majority PAC said, “Democrats have the opportunity to go from a 34-19 majority in California to a 41-12 majority – a net gain of seven seats, nearly a third of what we need to retake the majority in the U.S. House of Representatives ... This may well be a once-in-a-generation opportunity.”

    But without a competitive presidential or Senate race in California, there will be no pull for Democratic voters from the top of the ticket. “This is particularly important in the Hispanic community – the presidential election will not be focused on communicating with these voters in California,” the fund-raising pitch said.

    All the more enticing for Democratic mega-donors to give to the House Majority PAC, which had nearly $1.7 million in cash on hand as of March 31.

    Like its Republican rival, it too has a California-specific fund and appeals to home-state pride in its pitch: “For a long time, California donors have dutifully contributed to Democratic efforts and that money has been spent everywhere but California. In 2012, California donors have the opportunity to fund critically important races right here in the Golden State.”

    First Thoughts: Obama unloads on Romney

    Initially, some Democrats – including President Barack Obama – denounced Super PACs and non-profit groups called 501c4s, which were given a new birth of fundraising freedom under the Citizens United decision.

    But “I don’t hear that (objection) as much (from Democratic donors) anymore,” said Ali Lapp, executive director of the House Majority PAC. “More and more, there are a lot of Democratic donors out there that totally understand that if we try to fight this fight with one hand tied behind our back, the country is not going to get any better.”

    Lapp said, “The way I think about, there are nine competitive seats in California ... Of those nine, I think we will win five or six – if we’re really lucky, seven. If we won only two, it would not be a happy day; we would have had a horrible election if we won only two of those nine.”

    One place where House Majority PAC had been spending money in recent weeks is in the new 26th Congressional District in Ventura County, where four Democrats and one Republican, state Sen. Tony Strickland, are running. So far, Strickland has outraised all other contenders by a wide margin.

    Also on the June 5 ballot is a former-Republican-turned-independent, county supervisor Linda Parks, who won a glowing endorsement from The Los Angeles Times which sees her as exactly the type of centrist pragmatist that reformers had hoped citizen-driven redistricting would promote.

    If Parks and Strickland are the top two finishers on June 5, Democrats will start the November campaign already one seat behind.

    “This is a lean-Democratic district that in November has a better chance of going for a Democrat than for a Republican,” said Lapp.

    “But because of the dynamics of the top-two primary system where you have an independent with very high name ID and you have a bunch of Democrats on the ballot, there was a very real chance we could be squandering this opportunity if we didn’t get involved and make sure that voters knew who Julia Brownley is, what she stands for, and that she is the leading Democrat in the race.”

    But that race is only one of the places where the House Majority PAC is likely to invest money.  “On June 6, we’ll see what the match-ups are and – knock on wood – we’ll get the strong candidates we’re expecting to get from all these districts,” Lapp said.

  • Million dollar donors fuel Super PACs

    Idaho businessman Frank Vandersloot, a "super donor" who contributed $1 million to Mitt Romney's Super PAC. speaks out about his contribution: "We want somebody that understands business" in the White House. National Investigative correspondent Michael Isikoff reports.

    More on recent FEC reports on campaign contributions: