The 2012 election cycle is already one of the most expensive in history. Already, the London Telegraph is reporting $3 billion have been spent by both parties combined, and the post-convention advertising blitz for both parties is still a month away. What makes this number even more astonishing who has spent the lion’s share of this money: so-called “527 groups.”
“Most money goes to what are known in American campaign law parlance as “super PACs” (political action committees),” the article, by Phillip Sherwell, reads. “Groups nominally independent of any candidate which can solicit and spend unlimited sums from individual donors, as well as from corporations and unions, on highly partisan advertising.”
These nonprofit political groups and political action committees (PACs) fall, by virtue of a 2010 Supreme Court decision, outside the normal campaign finance laws. They are not subject to any restrictions on spending and while they must make their balance sheets available to the IRS, they are not required to disclose their donors. Such groups include GOPAC, a conservative PAC founded by former presidential candidate Newt Gingrich; and liberal PAC MoveON.org, financed mostly through the efforts of billionaire investor George Soros. However, there are thousands of these groups all across the country, and must walk a tightrope as far as message content is concerned. Swiftboat Veterans and MoveOn were both fined by the Federal Elections Commission in 2004 for attacking candidates instead of promoting their viewpoints, in violation of campaign law. Some were created for a season, such as Swiftboat Veterans for Truth, and others created to be a consistent thorn in candidates sides, such as the Progressive Majority.
One such group, which has been the big spender on Republican-oriented causes in this current cycle is called Restoring Our Future. OpenSecrets.org’s report on Restoring Our Future shows the PAC has spent over $40 million on the 2012 race. The largest single donor professional category for this group are donors working in the area of Securities and Investments, an industry which heavily favors low-tax policies advanced by Republicans. The PAC has focused its advertising efforts solely on the presidential campaign, with more than 75% of the expenditures used to run ads opposing the campaigns of Rick Santorum, Newt Gingrich and Barack Obama. Almost all the remaining amount spent has been on ads supporting nominee Mitt Romney, with major organizational donors including developer Perry Homes Co ($6 million), Adelson Drug Clinic and Las Vegas Sands ($5 million each), and Bain Capital itself ($3.25 million). Major individual donors include developer Bob Perry ($4 million total), executive Edward Conrad ($2 million), investors John Childs and John Kleinheinz ($1 million each), and executive Robert Mercer ($1 million).
On the other side of the aisle, the group Priorities Action USA, a group identified by OpenSecrets as a liberal PAC, leads the way in advertising for Democrat-oriented causes, with spending at $16 million in the current election cycle. While it spent less than half of what Restoring Our Future has spent, all of that spending has been used for advertising attacking Mitt Romney. The primary industry contributor to this PAC has been entertainment and contributions from retired individuals, both groups which heavily favor social programs advanced by Democratic candidates. Major organizational donors to the PAC include entertainment company Dreamworks ($2 million), Newsweb and SEIU ($1.5 million each), Mostyn Law Firm ($1 million), and Landmark Medical Management ($1 million). Major individual donors include Dreamworks founder Jeff Katzenberg ($2 million), former Qualcomm CEO Mark Jacobs ($2 million), actor Morgan Freeman ($1 millon), comedian Bill Maher ($1 million) and attorney Steven Mostyn ($1 million).
Whether either PAC’s advertising for or against will have an impact on voter opinion or turnout remains to be seen. Properly worded messages can have a profound impact on an election. In Florida, Marco Rubio’s 2010 Senate campaign was assisted, albeit indirectly, by 527 ads by Victory Trust. The ads, targeted against former governor Charlie Crist, cited numerous quotes calling Crist everything from a “backstabber” to an “opportunist.” While neither Democratic candidate Kendrick Meeks nor Rubio had anything to do with the ad, the message sent reinforced voter opinion of Crist’s decision to run as an independent as one of opportunity instead of political conviction. In the end, Rubio handily defeated Crist, and he remains a primary contender for a Vice Presidential offer from Romney. While it could be argued that Victory Trust’s ad was in violation of campaign law, the fact is that it aided Rubio’s election campaign.
The payoff for these groups is not just their candidate winning or their message being heard, it’s something far for valuable: influence. When Barack Obama won the White House in 2008, one of his largest contributors was General Electric whose CEO, Jeffrey Immelt, received unprecedented access to the President as an advisor on job creation. Strangely, the sword can cut both ways, as Immelt has also called the President “anti-business.”
Once the conventions are over with and the GOP Vice President is revealed, advertising by 527 groups is likely to multiply. The final number is still months away but with billions already spent, this particular cycle will go down as one the costliest of memory and will, no doubt, lead to the question “How much does it cost to buy a vote?”