Outside Spending Makes 2010 Elections Look Like Presidential Races

Groups flush with coin and agendas are flooding voters with a plethora of ads.

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The satirical publication The Onion, known for its keen sense of the American zeitgeist, ran an article this month entitled "American People Hire High-Powered Lobbyist to Push Interests in Congress." The story lampooned that "unlike R. J. Reynolds, Pfizer, or Bank of America, the U.S. populace lacks the access to public officials required to further its legislative goals."

The article passed quickly among the wonks who study the minutia of campaign finance, sometimes eliciting more sighs than chuckles. "There's a sense that politics, and elections in particular, are in the hands of fewer and fewer wealthy individuals," says David Donnelly, a campaign finance expert at the Public Campaign Action Fund, which advocates for campaign finance reform and greater transparency in election funding. "This election is proving that to be the case."

The midterm campaigns are shaping up to be radically different from past contests in three important ways. First, there is vastly more money being raised and spent. All told, election finance experts put the price tag for the November contest this year at $3.7 billion, an increase of more than 30 percent over the cost of the last midterm elections in 2006. Since a paltry 0.6 percent of the adult population contributes money to political campaigns, it means that those who do pay have their voices disproportionately amplified, experts say, which explains why the Onion article resonated so well.

[See photos from the campaign trail.]

Money spent on communicating with voters, such as for radio, television, and Internet advertising, makes up a significant portion of that overall spending figure. And the amount spent by outside groups, which are separate and distinct from candidates, has received particular attention this year. However, overall spending on communications by such groups is actually lagging behind 2006 levels. As of October 28, $456 million had been spent, down from almost $518 million at the same point four years ago. But critical changes in where that money comes from and how it is spent have cast these expenditures in a new light.

Another important departure from past election practices is that new rules have made it increasingly difficult to trace which companies, unions, groups, and individuals are funding which election efforts. In its Citizens United v. Federal Election Commission decision in 2010, the Supreme Court ruled that corporations and labor unions could directly spend funds from their treasuries for campaign purposes, opening a new and potentially unlimited flow of cash into the political process. Before that decision, corporations and unions could not spend money directly advocating for or against candidates' elections. This spending is collectively known as "independent expenditures," and can include a wide variety of communication strategies, such as mailings, advertisements, and canvassers. The first groups to extensively leverage the new funding rules post-Citizens United were labor groups targeting Sen. Blanche Lincoln in the Arkansas Democratic primary earlier this year. In May, for example, a PAC affiliated with the Service Employees International Union spent on phone banks and Internet advertising promoting Lincoln's primary opponent, Arkansas Lt. Gov. Bill Halter. Likewise, Working America, an organization associated with the AFL-CIO, purchased radio advertisements and sent out mailings promoting Halter and opposing Lincoln.

[See political cartoons about the Democrats.]

Liberals, especially, warned of a post-Citizens United flood of corporate money. But it is hard to measure the extent to which these fears have been borne out, as the most influential groups have channeled their funding through tax-exempt nonprofits that by law are not required to disclose their donors.

The third change is in the level of involvement these outside groups have had in the elections. Tracing how money works its way along the campaign trail is not easy. Increasingly, it comes from groups that keep some or all of their donors' identities secret, like the U.S. Chamber of Commerce, which this month alone has spent $24.2 million on the election. The Chamber of Commerce is a 501(c)6 tax-exempt organization under the tax code. Americans for Tax Reform, another conservative activist group, has laid out $3 million in October. And perhaps the most-mentioned in the media, Karl Rove's Crossroads GPS, has spent $13.7 million. Indeed, the largest such groups back conservative, business-friendly causes like lower taxes and less government regulation.