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“It’s a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans,” President Barack Obama said in a statement after the Supreme Court’s January 2010 Citizens United decision, which held that corporations have a constitutional right to free speech.
Now, more than two and a half years later, it’s clear that Obama was wrong.
The Citizens United decision (and the subsequent SpeechNow.org decision from the U.S. Court of Appeals) did dramatically alter the campaign finance system, but it did not lead Exxon Mobil, JPMorgan Chase or Pfizer to spend tens of millions of dollars to elect its preferred candidates to the House and Senate.
Instead, a growing number of wealthy individuals have used the system to their advantage, investing hundreds of thousands of dollars or more into a single race — usually a primary — to try to select a nominee in a district or state where the nomination is tantamount to election. Ultimately, this development could change the nature of one of our parties.
Ideological and issue-oriented groups have for years found ways to spend large amounts of money during elections, through 527s, 501(c)(6) spending or traditional political action committees. Super PACs have only made it easier for them to raise unlimited amounts of money and to spend it using express advocacy for the election, or defeat, of a candidate.
In very rare instances in the past, individuals have spent their own money on independent expenditure campaigns — as Michael Goland did in a 1984 effort against then-Sen. Charles Percy (R-Ill.) and in 1986 to help re-elect then-Sen. Alan Cranston (D-Calif.), and as businessman Lane Grigsby did in television ads against Louisiana Democratic Rep. Don Cazayoux in 2008.
But this cycle is different. Stephen F. Austin State University student John Ramsey has pumped more than $800,000 into a super PAC, Liberty for All, that is running more than a half-
million dollars of television ads supporting the candidacy of Thomas Massie, one of the favorites in today’s GOP primary in Kentucky’s 4th district.
Ramsey, 21, certainly doesn’t fit the profile of the wealthy corporate titan that Obama and others warned about after the Citizens United decision.
Instead, he is a libertarian who also supports Texas Rep. Ron Paul’s bid for the Republican presidential nomination and inherited his money from his late grandfather, a banker.
In North Carolina, friends and family of former U.S. Attorney George Holding created the American Foundations Committee, a super PAC that spent $222,000 to advocate for Holding’s election and another $327,000 against Holding’s main opponent in the 13th district GOP primary, Wake County Commissioner Paul Coble. Holding defeated Coble in the primary earlier this month.
In Nebraska, wealthy businessman Joe Ricketts used his own resources to create Ending Spending Action Fund, a super PAC that ran ads supporting the candidacy of state Sen. Deb Fischer and attacking the initial frontrunner in the race, state Attorney General Jon Bruning, in this month’s GOP Senate primary.
In an April 25 Federal Election Commission report, Fischer, who won her party’s nomination, showed just $94,000 in the bank, so Ricketts’ spending, reported by the Omaha World-Herald as $200,000, was a considerable investment in the primary.
In California, as veteran California political reporter Bill Boyarsky wrote on May 4 in his LA Observed blog, wealthy businessman Marc Nathanson enlisted folks such as entrepreneur David Bohnett and real estate mogul Peter Lowy to give to the Committee to Elect an Effective Valley Congressman, a super PAC that is supporting Rep. Howard Berman against fellow Democratic Rep. Brad Sherman in the 30th district.
And last cycle, businessman Jerry Morgensen, who served as president, CEO and eventually chairman of Hensel Phelps Construction Co., a large Greeley, Colo.-based general contractor and construction company, sent hundreds of thousands of dollars to three different groups — Americans for Job Security, a 501(c)(6) nonprofit, and two corporations, Declaration Alliance and Campaign for Liberty — to fund ads supporting Ken Buck in Colorado’s GOP Senate primary.
“Were it not for Morgensen, Ken Buck would now be a county prosecutor that nobody ever heard of and Michael Bennet would be a former, unelected temporary United States Senator,” said Brad Todd of OnMessage Inc., who worked for Buck’s primary opponent, Jane Norton.
There are other examples, of course. Wealthy Las Vegas businessman
Sheldon Adelson bankrolled former Speaker Newt Gingrich’s presidential bid, and a few wealthy businessmen are funding an organization, the Campaign for Primary Accountability, that oddly is playing in both Democratic and Republican House primaries.
Politically interested, often ideologically motivated, wealthy individuals, not large, powerful corporations, have realized that the new campaign finance environment allows them to use their financial muscle to impact races, particularly through super PACs.
Most large corporations want to avoid the potential hassle of getting too deeply involved in partisan politics. They don’t want their stockholders, or their customers, to make an issue out of the political use of their corporate funds, so dumping millions directly into House and Senate races is about the last thing they want to do.
But individuals who own privately held companies or have accumulated wealth have fewer constraints on their political activities.
It is these people, not “big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington,” who are now jumping into primaries and general elections.
Primaries — particularly those where the nomination is extremely valuable — have become big targets, because these individuals, acting through super PACs, can dramatically change the outcome of a contest. Political insiders say the number of super PACs will likely explode in the next election cycle.
The danger for Republicans now, but possibly Democrats in the future, is that a small group of wealthy ideologues will use the new organizations to nominate and elect a large enough number of extreme Members.
The near-term danger for Republicans involves libertarians, who could redefine the GOP in a way that would cripple, or even fracture, the party.
Stuart Rothenberg is editor of the Rothenberg Political Report.