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.
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.
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.
These nonprofit groups defend the ability to maintain their donors' anonymity because, they argue, that anonymity protects the right to free speech and association. The groups point to recent history in which state governments and others have used donor rolls to harass or intimidate, for instance, civil rights activists and unpopular political movements like the Socialist Workers Party. More recently, activists in California used campaign donation rolls to locate and harass supporters of an anti-gay marriage ballot initiative. What's more, donor transparency might not be all it's cracked up to be in the political process. University of Oregon political scientist Gerald Berk told a colloquium of campaign finance experts at the U.S. Capitol last week that voters might ultimately be turned off by knowing the origins of all campaign messages. "Maybe disclosure is bad because it makes voters cynical," he said.
Vote for or against. Historically, the largest share of outside campaign communications in an election cycle has been made up of independent expenditures, which can include spending on mailings, phone banks, and canvassing, in addition to radio and television ads.
A recent independent expenditure ad in Pennsylvania rapped Democratic Rep. Jason Altmire, for example, for supporting Nancy Pelosi, telling voters in no uncertain terms: "It's time to vote Altmire out." That ad was paid for by Americans for Job Security, which has already spent a total of $4.4 million on such communications this cycle in races around the country, according to federal election data.
Independent expenditures by such groups have jumped dramatically. Consider this: In the 2006 midterms, party committees accounted for 83 percent of all independent expenditures, while the remaining 17 percent came from nonaligned groups. This midterm, 59 percent of all outside spending on independent expenditures has come from those nonaligned groups, while only 41 percent has come from party committees, according to Federal Election Commission data crunched by the Sunlight Foundation, a pro-transparency group.
Even independent expenditures have limits. Many of the groups at issue in the current election, called 501(c)4s and 501(c)6s for the section of the tax code under which they are organized, are prohibited from devoting more than half their total expenditures on such "political activities." But these outside groups are allowed to spend unlimited amounts on other activities including "electioneering communications," also known as "issue ads" which do not count as political activities. Issue ads, despite their benign description, are highly political, most often attacking or applauding a politician's stance on a topic in ways that, to voters, make them nearly indistinguishable from standard political ads.
In Iowa, for example, a group called the American Future Fund took aim at Democratic Rep. Bruce Braley for his support of the planned construction of an Islamic community center and mosque in lower Manhattan. "It's like the Japanese building at Pearl Harbor," the ad says, urging voters to call Braley and "tell him what you think." What the ads are not allowed to do is explicitly call for Braley's defeat or his opponent's election.
While these "issue ads" are ostensibly nonpolitical, they can be as potent as any regular political attack ad. In Ohio, for instance, an electioneering TV ad recently ran that criticized Republican gubernatorial candidate John Kasich for the time he spent as a manager at the now-defunct investment bank Lehman Brothers. "Ask John Kasich how he got rich on Wall Street," urges the ad, which was paid for by the American Federation of State, County, and Municipal Employees.
A U.S. News analysis of campaign finance data shows that one of the most visible contributors to this election's high price tag is the increase in spending on these electioneering communications. Even now, with only days of campaigning left until Election Day, the $74.4 million spent thus far on such communication in the 2010 election cycle represents a more than fivefold increase over the $13.7 million spent in 2006.
Yet given the current tax law, it makes good financial sense, campaign finance experts say, for these groups to continue to advocate for a particular policy position, rather than throw in their lot with a particular candidate. "As long as you're still engaged in issue advocacy, you're not making the expenditure that might [violate nonprofit] status," says Allison Hayward, the vice president of policy at the Center for Competitive Politics.
In 2006, electioneering communications constituted around 5 percent of all outside spending on communications, but in 2010 they account for around 17 percent. This makes 2010 campaign ledgers (and the public airwaves) look more like a presidential election year than a midterm election. In 2004 and 2008, electioneering ads accounted for around 20 percent of all campaign communication spending.
This year's electioneering communication spending patterns over time also look more like that of 2004 and 2008 than that of the 2006 midterm election. This year, as in 2004 and 2008, these ads have been a constant presence, with a relentless stream of ads since April (though there has been an uptick as November approaches). In 2006, the FEC recorded only 12 electioneering communications prior to September 1. This year, there were 87.
The U.S. Chamber of Commerce is a major reason that electioneering communication spending is up this year. Of the $74.4 million spent thus far on electioneering communications, $32 million—nearly 43 percent—has been spent by the chamber, according to the FEC. The overwhelming majority of those ads either backed conservative or Republican candidates or attacked Democrats.
Just getting warmed up. In the end, though, November is only a trial run for the bigger prize: the 2012 presidential elections. Just as the Obama administration leveraged its own database of supporters to aid in the passage of healthcare and banking reform legislation—a novel mobilization for a candidate already elected—so too will the groups that now dominate the midterms continue to push their issues. Several were also important players in the healthcare debate, for example. Given the potency of these groups and their advertising, political experts note, the era of the endless campaign is well under way.