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Context of 'January - November 2004: Two Billionaire Donors Dominate Democratic Contributions during Election Campaign'

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A number of political action committees, or PACs (see 1944, February 7, 1972, 1975, and November 28, 1984), created by “independent” organizations inform the Federal Election Commission (FEC) that they will not disclose the names of donors or amounts of funds raised, because they are not expressly advocating for or against any individual candidate. These PACs become known as “527 groups,” based on Section 527 of the federal tax code. Congress soon passes a disclosure mandate forcing PACs to reveal their donors and information about their fundraising and expenditures (see June 30, 2000). By 2005, many PACs begin registering themselves as 501(c)4 “advocacy nonprofit” organizations. Under the law, such groups can only conduct certain “political advocacy” activities, but in return do not have to disclose their contributors or information about their financing. [National Public Radio, 2012]

Entity Tags: US Congress, Federal Election Commission

Timeline Tags: Civil Liberties

Sam Wyly.Sam Wyly. [Source: Forbes]A group called “Republicans for Clean Air” begins running ads attacking Republican presidential candidate John McCain in New York. The ads accuse McCain of voting against alternative energy sources. At the same time, ads paid for by the campaign of Republican presidential candidate George W. Bush accuse McCain of labeling breast cancer programs as wasteful. Governor George Pataki (R-NY) accuses McCain of voting “anti-New York” in the Senate, while Representative John Sweeney (R-NY) says McCain was wrong to vote for raising heating oil taxes, a major issue in cold-weather states such as New York. [Salon, 3/2/2000] The group also runs ads in primary states claiming that Bush, as Texas governor, passed laws intended to reduce air pollution in Texas by over a quarter-million tons a year. The evidence does not support the claim; what few anti-pollution laws have taken effect in Texas were written mostly by Democratic state legislators and signed into law, often reluctantly, by Bush.
RFCA Consists of Two Texas Billionaires - An investigation by the New York Times soon proves that “Republicans for Clean Air” (RFCA) is funded by Dallas billionaire Sam Wyly, a Bush supporter, who has contributed $2.5 million to the group. Wyly and his brother Charles Wyly, also a RFCA contributor, are the co-founders of Sterling Software in Dallas. They are also owners, founders, or executives in firms that own Bonanza Steakhouse, the “Michael’s” chain of arts and craft stores, the hedge fund Maverick Capital, and more. Both are heavy Bush campaign donors, having donated over $210,000 to the Bush gubernatorial campaigns. They are apparently the only two members of the RFCA. Craig McDonald of Texans for Public Justice says of Sam Wyly: “He’s one of the elite. He’s one of the movers and shakers. He’s very big money in the state.” McCain’s campaign accuses the Bush campaign of being responsible for the advertising, and says the Bush campaign is trying to evade campaign finance laws (see February 7, 1972 and May 11, 1992). The McCain campaign complains that the Bush campaign is using unethical and possibly illegal campaign tactics to “steal” the primary election by saturating New York, California, and Ohio with anti-McCain ads just days before the primary elections in those critical states. “There is no question in our campaign’s mind that the ads are being sponsored, coordinated, and managed by the George Bush for President campaign,” says McCain’s campaign manager Rick Davis. “I think it’s incumbent on the Bush campaign to prove somehow that they are not involved in this incredible act.” Davis has no direct evidence for his claim, but cites what the Times calls “a tangle of personal, business, and political relationships between Mr. Wyly and his family and the Bush campaign to suggest that their interests were so close as to be indistinguishable.” One of those relationships cited by Davis is the fact that RFCA uses the same public relations firm, Multi Media Services Corporation, as Pataki, who chairs the Bush campaign in New York and who appears in Bush campaign ads. Bush himself denies any connection with RFCA, and says: “There is no coordination.… I had no idea the ad was going to run.” Wyly also disclaims any coordination with the Bush campaign. He says he laughed during the production of the commercials, and mused over how “surprised” the Bush campaign would be to see them on the airwaves. McCain uses the ads to draw attention to one of his favorite campaign themes, campaign finance reform. On a recent morning talk show, McCain said: “I think maybe the Bush campaign is out of money and somebody’s putting in $2 million to try to hijack the campaign here in New York. Nobody knows where it came from. [When McCain filmed the interview, Wyly’s identity had not been revealed.] We’ll probably find out, but probably too late. This is why campaign finance reform is so important.” [New York Times, 3/3/2000; New York Times, 3/4/2000; New York Times, 3/5/2000; San Jose Mercury News, 3/6/2000; Scott E. Thomas and Danny Lee McDonald, 4/2002; New York Times, 8/23/2010] The press soon learns that Charles Wyly is an official member of the Bush presidential campaign, as a “Pioneer” donor, and has contributed the maximum amount under the law. [New York Times, 3/4/2000] It also learns that RFCA’s stated address is a post office box in Virginia belonging to Lydia Meuret, a consultant who runs a political action committee headed by Representative Henry Bonilla (R-TX), a Bush ally. Meuret denies any connection between RFCA and Bonilla or Bonilla’s PAC, but admits she is a consultant to both. [New York Times, 3/3/2000]
'527' Group Operates in Campaign Finance Law 'Gray Areas' - RFCA is a “527” group (see 2000 - 2005); such groups operate in a “gray area” of campaign law, as the monies they use are not contributed directly to a candidate or a political party. However, they are banned from coordinating their efforts with candidate campaigns. Their ads must not make direct appeals to voters in support of, or opposition to, a particular candidate. If they comply with this portion of the law, the donors behind the ads, and the amounts they contribute, do not have to be identified. The law does not even require the groups to declare their existence, as was the case for a time with RFCA. The Times reports, “While some of the groups behind issue advertising are vague about their membership, Mr. Wyly’s effort was a rare instance in which commercials were aired without any hint of their origin.” Fred Wertheimer of Democracy 21, a group advocating campaign finance reform, says of so-called “issue” ads such as these: “The secrecy aspects of this are taking campaign finance problems to yet another new and dangerous level. What we’re seeing here is the use of unlimited, undisclosed money to influence a federal election, and that’s totally at odds with the whole notion of campaign finance disclosure.” [New York Times, 3/3/2000; San Jose Mercury News, 3/6/2000; New York Times, 3/29/2000; New York Times, 8/23/2010] Progressive columnist Molly Ivins calls the RFCA ads examples of “sham issue” advertisements. [San Jose Mercury News, 3/6/2000]
Bush Claims RFCA Ads Not Helpful - After Bush secures the nomination over McCain, he tells a reporter, “I don’t think these [Republicans for Clean Air] ads are particularly helpful to me.” But Slate reporter Chris Suellentrop writes: “Of course they were helpful. Otherwise Bush would have called the group and told them to call off the dogs.” [Slate, 8/25/2000]
Wyly Brothers Will Fund 2004 'Swift Boat' Campaign, Later Charged with Securities Fraud, Insider Trading - A month after the ads air, Sam Wyly says he will no longer involve himself in politics. Wyly, who says he is a staunch environmentalist, says he admires Bush’s Democratic challenger, Vice President Al Gore (whom Wyly has called a regulation-happy environmentalist, and whom Wyly has considered attacking with television ads). Of his foray into the presidential campaign, Wyly says: “I learned from it. Many of you are aware of my recent foray into presidential politics. It is to be my last.” In 2004, the Wyly brothers will be two of the primary donors behind the “Swift Boat” campaign that will slander and impugn the character and military service of presidential candidate John Kerry (D-MA). In 2010, the Wyly brothers will be charged with securities fraud and insider trading that netted them at least $581 million in illegal gains, according to the Securities and Exchange Commission. [New York Times, 4/5/2000; New York Times, 8/23/2010]

Entity Tags: George W. Bush presidential campaign 2000, Charles Wyly, Sam Wyly, George E. Pataki, Fred Wertheimer, George W. Bush, Chris Suellentrop, Rick Davis, Albert Arnold (“Al”) Gore, Jr., New York Times, John McCain, John Kerry, John E. Sweeney, John McCain presidential campaign 2000, Henry Bonilla, Lydia Meuret, Molly Ivins, Republicans for Clean Air

Timeline Tags: 2000 Elections, Civil Liberties

The Senate approves bipartisan legislation, the so-called “Stealth PAC” bill, that requires secretive tax-exempt organizations that raise and spend money on political activities to reveal their donors and expenditures. The so-called “527” organizations have flourished because until now, Section 527 of the Internal Revenue Code has protected both their nonprofit status and their right to keep their donors and funding information secret (see 2000 - 2005). President Clinton will sign the bill into law. It is the first major legislative change in American campaign finance law in two decades (see January 8, 1980). Under the new law, Section 527 organizations raising over $25,000 a year must comply with federal campaign law, file tax returns, disclose the identities of anyone contributing over $200, and report expenditures in excess of $500. That information will be reported to the IRS every three months during an election year, and the information will be posted on the Internet. The bill takes effect as soon as Clinton signs it into law.
Passed Despite Republican Opposition - The House passed the bill on a 385-39 vote; only six Senate Republicans vote against the bill. Senate and House Republican leaders have blocked the bill for months. Clinton says, “Passage of this bill proves that public interest can triumph over special interests,” and urges Congress to pass a more comprehensive overhaul of campaign finance law. Senator Russ Feingold (D-WI) says, “I’m not pretending we don’t have other loopholes to close, but those groups that have found this an easy, painless way to go on the attack are now going to have to scramble to figure out different ways.” Some ways that groups will avoid the requirements of the new law are to reorganize themselves as for-profit organizations—thus losing their tax exemptions—or trying to reorganize as other types of nonprofits. Many expect donors to rush big contributions to these 527 groups before the new law takes effect. Mike Castle (R-DE), a House Republican who supports the bill, says, “I am sure that the phones are ringing over on K Street right now about how to get money into the 527s before they are eliminated.” Senator Mitch McConnell (R-KY), who helped Senate Republicans block the bill and who voted no on its passage, now calls it a “relatively benign bill,” downplaying his stiff opposition to the bill and to campaign finance regulation in general. McConnell advised Republicans up for re-election in November 2000 to vote yes for the bill “to insulate them against absurd charges that they are in favor of secret campaign contributions or Chinese money or Mafia money.” McConnell explains that he voted against the bill because it infringes on freedom of speech (see December 15, 1986). Governor George W. Bush (R-TX), the GOP’s presidential candidate, issues a statement supporting the bill: “As I have previously stated, I believe these third-party groups should have to disclose who is funding their ads. As the only candidate to fully disclose contributors on a daily basis, I have always been a strong believer in sunshine and full disclosure.” Bush defeated Republican challenger John McCain (R-AZ) in part because of the efforts of Republicans for Clean Air, a 527 group headed by Bush financier Sam Wyly and which spent $2.5 million attacking McCain’s environmental record (see March 2000 and After). McCain helped push the current bill through the Senate, and says: “This bill will not solve what is wrong with our campaign finance system. But it will give the public information regarding one especially pernicious weapon used in modern campaigns.”
527s Used by Both Parties - Both Democrats and Republicans have created and used 527 groups, which are free from federal oversight as long as they do not advocate for or against a specific candidate. The organizations use donations for polling, advertising, telephone banks, and direct-mail appeals, but are not subject to federal filing or reporting rules as long as they do not advocate the election or defeat of a specific candidate. Some groups, such as the Republican Majority Issues Committee, a 527 organization aligned with House Majority Leader Tom DeLay (R-TX), intend to continue functioning as usual even after the bill is signed into law, while they examine their legal options. The committee head, Karl Gallant, says his organization will “continue on our core mission to give conservative voters a voice in the upcoming elections.” The Republican Majority Issues Committee is considered DeLay’s personal PAC, or political action committee; it is expected to funnel as much as $25 million into closely contested races between now and Election Day. Gallant says the organization will comply with the new law, but complains, “We are deeply concerned that Congress has placed the regulation of free speech in the hands of the tax collectors.” He then says: “We’re not going anywhere. You will have RMIC to amuse and delight you throughout the election cycle.” The Sierra Club’s own 527 organization, the Environmental Voter Education Campaign, says it will also comply “eagerly” with the new law, and will spend some $8 million supporting candidates who match the Sierra Club’s pro-environmental stance. “We will eagerly comply with the new law as soon as it takes effect,” says the Sierra Club’s Dan Weiss. “But it’s important to note that while we strongly support the passage of this reform, 527 money is just the tip of the soft-money iceberg. Real reform would mean banning all soft-money contributions to political parties.” Another 527 group affected by the new law is Citizens for Better Medicare, which has already spent $30 million supporting Republican candidates who oppose a government-run prescription drug benefit. Spokesman Dan Zielinski says the group may change or abandon its 527 status in light of the new law. “The coalition is not going away,” he says. “We will comply with whatever legal requirements are necessary. We’ll do whatever the lawyers say we have to do.” A much smaller 527, the Peace Voter Fund, a remnant of the peace movement of the 1970s and 80s, says it intends to engage in voter education and issue advocacy in about a dozen Congressional races. Executive director Van Gosse says the group will follow the new law and continue as before: “Disclosure of donors is not a major issue for us. So we’ll just say to donors in the future that they will be subject to federal disclosure requirements. It’s no biggie.” [New York Times, 6/30/2000; OMB Watch, 4/1/2002; Huffington Post, 9/28/2010]

Entity Tags: Karl Gallant, John McCain, Environmental Voter Education Campaign, Dan Zielinski, Dan Weiss, Citizens for Better Medicare, Van Gosse, US Senate, William Jefferson (“Bill”) Clinton, George W. Bush, Republican Majority Issues Committee, Republicans for Clean Air, Peace Voter Fund, Mike Castle, Mitch McConnell, Tom DeLay, Sierra Club, Sam Wyly, Russell D. Feingold

Timeline Tags: Civil Liberties

Peter Lewis of Progressive Insurance.Peter Lewis of Progressive Insurance. [Source: Forbes]Billionaire George Soros, a frequent contributor to Democratic and liberal causes, gives $23.7 million to a number of “527s,” politically active groups that operate independently of particular campaigns or candidates (see 2000 - 2005, March 2000 and After, and June 30, 2000). Peter Lewis, the CEO of Progressive Insurance, gives almost that much, with donations totaling $23.247 million. Their donations include:
bullet $16 million (Lewis) and $12,050,000 (Soros) to the Joint Victory Campaign 2004, an “umbrella” fundraising entity that distributes funds to two other major groups, America Coming Together (ACT) and The Media Fund.
bullet $7,500,000 (Soros) and $2,995,000 (Lewis) to America Coming Together.
bullet $2,500,000 (Soros) and $2,500,000 (Lewis) to MoveOn.org.
bullet $650,000 (Lewis) and $325,000 (Soros) to the Young Democrats of America.
bullet $485,000 (Lewis) to the Marijuana Policy Project.
bullet $325,000 (Soros) to Democrats 2000.
bullet $300,000 (Soros) to the Real Economy Group.
bullet $300,000 (Soros) to the Campaign for America’s Future.
bullet $250,000 (Soros) and $250,000 (Lewis) to Democracy for America.
bullet $250,000 (Soros) to Safer Together 04.
bullet $117,220 (Lewis) to Stonewall Democrats United.
bullet $100,000 (Lewis) to the Gay and Lesbian Victory Fund.
bullet $100,000 (Lewis) to the Sierra Club.
bullet $50,000 (Lewis) to PunkVoter.Inc. [Center for Responsive Politics, 2012; Discover the Secrets, 2012; Center for Responsive Politics, 6/11/2012; Center for Responsive Politics, 6/11/2012]

Entity Tags: George Soros, America Coming Together, Young Democrats of America, Democrats 2000, Democracy for America, Gay and Lesbian Victory Fund, Campaign for America’s Future, Stonewall Democrats United, The Media Fund, MoveOn (.org), Marijuana Policy Project, Sierra Club, Peter Lewis, Safer Together 04, PunkVoter.Inc., Joint Victory Campaign, Real Economy Group

Timeline Tags: Civil Liberties, 2004 Elections

The Wall Street Journal’s Stephen Moore interviews reclusive billionaire Charles Koch, the head of the Koch Brothers oil empire. Among the items of interest in the interview is Koch’s admission that he, along with his brother David (see 1977-Present, 1979-1980, 1981-2010, 1984 and After, and Late 2004), coordinates the funding of the conservative infrastructure of some of the most influential front groups, political campaigns, think tanks, media outlets, and other such efforts through a semiannual meeting with wealthy conservative donors. (Moore himself receives Koch funding for his work, according to a Think Progress report published four years later. In return, Moore is quite laudatory in the interview, writing that Koch is a “creative forward-thinking… professorial CEO” who “is immersed in the ideas of liberty and free markets.”) Koch tells Moore that his basic goal is to strengthen what he calls the “culture of prosperity” by eliminating “90 percent” of all laws and government regulations. Moore writes of the twice-yearly conference: “Mr. Koch’s latest crusade to spread the ideas of liberty has been his sponsorship of a twice-yearly conference that gathers together many of the most successful American entrepreneurs, from T. Boone Pickens to former Circuit City CEO Rick Sharp. The objective is to encourage these captains of industry to help fund free-market groups devoted to protecting the fragile infrastructure of liberty. That task seems especially critical given that so many of the global superrich, like George Soros and Warren Buffett, finance institutions that undermine the very system of capitalism that made their success possible (see January - November 2004). Isn’t this just the usual rich liberal guilt, I ask. ‘No,’ he says, ‘I think they simply haven’t been sufficiently exposed to the ideas of liberty.’” [Wall Street Journal, 5/6/2006; Think Progress, 10/20/2010]

Entity Tags: Think Progress (.org), Charles Koch, Wall Street Journal, David Koch, Stephen Moore

Timeline Tags: Civil Liberties

Billionaire investor and philanthropist George Soros says he plans to invest over $1 billion in clean energy technology. Soros is well known for his donations to liberal and progressive causes (see January - November 2004 and February 2007), but has not been prominent in the field of clean energy until now. The online magazine GigaOm reports that Soros’s decision is “another proof point that cleantech has emerged during the recession as one of the few sectors worth investing in.” Clean energy technology, propelled by investments by venture fund manager Vinod Khosla (see September 1, 2009), was the leading investment category in the US in the third quarter of 2009. Soros tells a conference audience in Copenhagen, “I will look for profitable opportunities, but I will also insist that the investments make a real contribution to solving the problem of climate change.” He also intends to start a watchdog group called the Climate Policy Initiative that will, he says, “protect the public interest against special interests.” [GigaOm, 10/12/2009]

Entity Tags: GigaOm, Vinod Khosla, George Soros

Timeline Tags: US Solar Industry

The Tea Party Patriots (TPP—see August 24, 2010), one of the most influential of national “umbrella” tea party organizations, announces the receipt of a $1 million donation for get-out-the-vote (GOTV) efforts. The TPP refuses to disclose the name of the donor. Two thousand eight hundred local tea party groups are eligible for money from the grant, and the TPP says it will distribute all of the monies by October 4. TPP’s Mark Meckler says: “This particular fund is intended to be applied for and spent by the [November midterm] election. The people who get the grants are required to spend them by election day.” TPP policy advisor Ernie Istook, a former Republican congressman, calls the donation “fertilizer for the grassroots.” Istook continues: “If you have a lawn, you water it, you tend to it, you weed it. That’s what’s happening here. And it is unique. I can’t think of anything quite like it happening before.” The TPP has said it will not endorse particular candidates for office, unlike another “umbrella” tea party organization, Tea Party Express and that group’s affiliated PAC. TPP official Jenny Beth Martin says the money is not to be used to endorse or attack individual candidates. Instead, she says: “What we’re doing is what our 2,800 local groups on the ground have been asking us to do. We’re not taking advantage of a loophole. What we’re making sure is that we support the local organizers on the ground.” Meckler adds, “We want to make sure people are out there voting for fiscal responsibility.” However, as the elections approach, tea party groups begin speculating where exactly the money is going. The TPP consistently refuses to disclose what groups receive money, or how much is disbursed. Dee Park of the Moore Tea Citizens in Moore County, North Carolina, is one who wonders about the money. “We wrote what we thought was a terrific proposal, but they didn’t fund it,” she says. No one from the TPP has contacted Park to inform her that her proposal was turned down. Appeals from other tea party groups asking for information about the money disbursement have been ignored—though the TPP regularly sends out appeals for more donations. Rhode Island tea party organizer Marina Peterson is in a similar position to Park; she submits a proposal for five groups in her area, but never hears anything from the TPP. Asked by a reporter if she knows who is receiving grants, she replies, “Wouldn’t we all like to know?” She says she was concerned from the outset about the anonymous nature of the donation, telling the reporter: “How do we know we want to take that money if we don’t know who the person is? What if it was [liberal billionaire] George Soros?” (see January - November 2004) Peterson says that every political organization, including the TPP and local tea parties, should be upfront and transparent about their funding. She recalls asking Meckler via email about the grant, and says that “[h]e went completely on the defensive when I asked him about it.” Meckler later tells Peterson that the TPP would not release information about the grant recipients to “shield” them from any controversy associated with the donation. Two groups do admit to receiving donations. The Chico Tea Party in California received $5,000, which it says it is spending on buying advertising on highway billboards. And the Nevada County, California, Tea Party Patriots received $10,000, which it says it is spending on billboards and newspaper ads. The Nevada County organization is headed by Stan Meckler, Mark Meckler’s father. The Chico organization says 12 groups in California have received money, though it does not disclose their names. Arizona tea partiers say they have used grant money to buy radio and billboard ads, but refuse to disclose amounts. And the TPP’s Florida coordinator Everett Wilkinson says his South Florida Tea Party received funding, but refuses to disclose an amount. Reporter Stephanie Mencimer writes: “This scuffle over the secret donation is symbolic of the internal conflict within the tea party movement. There are tea party activists who believe the movement’s rhetoric about transparency and accountability. But the movement also includes leaders and others who are willing to engage in and tolerate the funny-money games of business-as-usual politics. With the elections likely to enhance the political clout of the tea party movement, this tension between principles and practices is likely to intensify. After all, can tea partiers really claim they are ‘we the people’ when they are being subsidized by secret millionaires and guided by leaders who refuse to be accountable to those very people?” [Slate, 9/21/2010; Mother Jones, 11/1/2010] The donation is later shown to come from Republican financier Raymon F. Thompson, a former CEO who has provided Meckler and Martin with a luxurious private jet which they are using to fly around the country (see October 28, 2010).

Entity Tags: George Soros, Everett Wilkinson, Dee Park, Chico Tea Party, Stephanie Mencimer, Stan Meckler, Tea Party Patriots, Ernest Istook, Mark Meckler, Marina Peterson, Jenny Beth Martin, South Florida Tea Party, Raymon F. Thompson, Nevada County, California Tea Party Patriots

Timeline Tags: Civil Liberties

Sheldon Adelson, the owner of casinos in Nevada and Southeast Asia, says he may contribute up to $100 million to the presidential campaign of Newt Gingrich (R-GA). Adelson has already given some $11 million to Gingrich’s campaign, bolstering Gingrich’s otherwise-floundering efforts to become the Republican presidential nominee (see December 19, 2011, January 6, 2012, and January 23, 2012). He mocks the idea that he is trying to personally buy the presidential election for Gingrich, saying of his detractors: “Those people are either jealous or professional critics.… They like to trash other people. It’s unfair that I’ve been treated unfair—but it doesn’t stop me. I might give $10 million or $100 million to Gingrich.” Adelson, one of the world’s richest people, is well able to afford the largesse: according to Forbes magazine, Adelson’s $11 million gift to Gingrich only amounts to 0.044 percent of his fortune. But Adelson says he does not believe in the wealthy trying to influence US politics. “I’m against very wealthy people attempting to or influencing elections,” he says. “But as long as it’s doable I’m going to do it. Because I know that guys like [George] Soros (see January - November 2004) have been doing it for years, if not decades. And they stay below the radar by creating a network of corporations to funnel their money. I have my own philosophy and I’m not ashamed of it. I gave the money because there is no other legal way to do it. I don’t want to go through 10 different corporations to hide my name. I’m proud of what I do and I’m not looking to escape recognition.” Adelson, whose net worth has increased more than any other American’s during the Obama administration, says he wants to see President Obama removed from office for economic reasons. “What scares me is the continuation of the socialist-style economy we’ve been experiencing for almost four years,” he says. “That scares me because the redistribution of wealth is the path to more socialism, and to more of the government controlling people’s lives. What scares me is the lack of accountability that people would prefer to experience, just let the government take care of everything and I’ll go fish or I won’t work, etc.… US domestic politics is very important to me because I see that the things that made this country great are now being relegated into duplicating that which is making other countries less great.… I’m afraid of the trend where more and more people have the tendency to want to be given instead of wanting to give. People are less willing to share. There are fewer philanthropists being grown and there are greater expectations of the government. I believe that people will come to their senses and not extend the current administration’s quest to socialize this country. It won’t be a socialist democracy because it won’t be a democracy.” He refuses to say whether he would support another Republican candidate if Gingrich fails to secure the nomination, though he admits: “The likelihood is that I’m going to be supportive of whoever the candidate is. I just haven’t decided that yet and will wait to see what happens.” Adelson, whose Gingrich donations went mostly for negative ad campaigns against fellow Republican Mitt Romney (see December 19, 2011), adds: “I don’t believe in negative campaigning. I believe in saying that my opponents are very good people and I’m confident a lot of them would do a good job, but I would do a better job, and here’s why. Money is fungible, but you can’t take my money out of the total money you have and use it for negative campaigning.” Adelson denies that his money went towards the negative campaign ads that helped Gingrich win over Romney in South Carolina, saying: “That’s what everybody says, but that doesn’t mean it’s true. Most of what’s been written about me in this is untrue.” [Forbes, 2/21/2012]

Entity Tags: Obama administration, George Soros, Newt Gingrich, Willard Mitt Romney, Sheldon Adelson

Timeline Tags: Civil Liberties, 2012 Elections

Author and political science professor Richard Hasen provides data showing that the Supreme Court’s 2010 Citizens United decision (see January 21, 2010) is directly responsible for a huge rise in corporate “outside” spending on behalf of political campaigns. Recent arguments in defense of the decision have said that “super PACs,” the “independent” political entities that take corporate, labor union, and individual donations for the purpose of making television ads in support of, or opposition to, a particular candidate or party (see March 26, 2010, June 23, 2011, November 23, 2011, January 4, 2012, January 4, 2012, and February 20, 2012) were not created by the Court’s decision, and therefore Citizens United cannot be held responsible for the enormous surge in spending since the decision was rendered. The arguments equate older “527” organizations (see 2000 - 2005, March 2000 and After, and June 30, 2000) and the enormous donations made on their behalf (see January - November 2004) with the activities of super PACs after the Citizens United decision. “The purpose of the drumbeat appears to be to insulate the Supreme Court from further criticism of the Frankenstein’s monster they’ve created,” Hasen writes. He shows that the two types of organizations—527s and super PACs—are quite different. “It is true that before Citizens United people could spend unlimited sums on independent advertising directly supporting or opposing candidates,” Hasen explains. “But that money had to be spent by the individual directly. It could not be given to a political action committee, which had an individual contribution cap of $5,000 and could not take corporate or union funding. In many cases, wealthy individuals did not want to spend their own money on advertising, which would say, ‘Paid for by Sheldon Adelson’ or ‘Paid for by George Soros,’ so fewer of these ads were made. The only way to avoid having your name plastered across every ad was to give to the 527s, which claimed they could take unlimited money from individuals (including, sometimes, corporate and labor union money) on grounds that they were not PACs under the FEC’s definition of PACs. These organizations were somewhat successful, but a legal cloud always hung over them.” After Citizens United, courts and the Federal Election Commission ruled that super PACs could collect unlimited sums from corporations, unions, and individuals for unlimited independent spending. Hasen writes: “The theory was that, per Citizens United, if independent spending cannot corrupt, then contributions to fund independent spending cannot corrupt either. (I am quite critical of this theory about corruption, but that’s besides the point here.) So what was once of questionable legality before the court’s decision was fully blessed after Citizens United.” Using data from the Center for Responsive Politics and its OpenSecrets (.org) Web site, Hasen compares spending during presidential election years.
bullet 1992: Wealthy individuals, organizations, and corporations are allowed to spend unlimited sums (see January 30, 1976). Outside spending in that campaign, up through early March 1992, was about $1.5 million.
bullet 2000: The law remains essentially unchanged. By March 2000, outside spending was around $2.6 million.
bullet 2004: With the advent of “527” groups, by March 2004, outside spending rose to $14 million.
bullet 2008: Under similar conditions as 2004, by March 2008, outside spending rose to $37.5 million.
bullet 2012: In the first presidential campaign year after the Citizens United decision, spending as of early March 2012 is over $88 million.
2012 outside spending is at 234 percent of 2008 spending, and 628 percent of 2004 outside spending. Hasen writes, “If this was not caused by Citizens United, we have a mighty big coincidence on our hands.” Hasen expects outside spending to rise dramatically once the Republican primary is concluded and the presumptive Republican nominee begins campaigning against President Obama. “Wait until the super PACs and other organizations start raising their unlimited sums for the general election,” Hasen warns. “Further, lots of groups are now using 501(c) organizations rather than super PACs for their campaign spending, in an effort to hide their donors.” Data from the Center for Responsive Politics shows that during the 2010 midterm elections, spending from groups that used the law to hide their donors rose from 1 percent in 2006 to 47 percent. Moreover, “501(c) non-profit spending increased from 0 percent of total spending by outside groups in 2006 to 42 percent in 2010.” And 72 percent “of political advertising spending by outside groups in 2010 came from sources that were prohibited from spending money in 2006.” The record-breaking spending in the 2008 presidential election—$301 million—was eclipsed in the first post-Citizens United election, the 2010 midterms, when corporate and other outside spending topped out at $304.6 million. Hasen writes: “It was an incredible number for a midterm election season. Why did that happen? Citizens United was decided early in 2010.” [Slate, 3/9/2012]

Entity Tags: Sheldon Adelson, Federal Election Commission, Center for Responsive Politics, Barack Obama, George Soros, US Supreme Court, Richard L. Hasen

Timeline Tags: Civil Liberties

The New York Times reports that wealthy liberal donors, after months of relative inactivity, are gearing up to make large donations on behalf of Democratic candidates. But unlike their Republican counterparts, these donors are not going to give millions to super PACs. Instead, the Times reports, they will give most of their money to organizations focused on grassroots organizing, voter registration, and “get out the vote,” or GOTV, efforts. The Times reports, “The departure from the conservatives’ approach, which helped Republicans wrest control of the House in 2010, partly reflects liberal donors’ objections to the Supreme Court’s Citizens United decision (see January 21, 2010), which paved the way for super PACs and unbridled campaign spending.” Also, donors and strategists do not believe they can go head-to-head with wealthy Republican donors who are giving to groups like American Crossroads and Americans for Prosperity (AFP). Instead, they say they feel Democrats can press an advantage in grassroots organizing. Rob Stein of the Democracy Alliance, a group of liberal donors, says that while super PACs “are critically important,” local efforts and social-media outreach “can have an enormous impact in battleground states in 2012.” Billionaire financier and philanthropist George Soros (see January - November 2004) will give $1 million to America Votes, an organization that coordinates political actions for environmental, abortion rights, and civil rights groups, and another $1 million to American Bridge 21st Century, a super PAC that focuses on election research. Soros has not yet given significantly during the 2012 cycle. A Soros spokesperson, Michael Vachon, says: “George Soros believes the Supreme Court’s decision in Citizens United opened the floodgates to special interests’ paying for political ads. There is no way those concerned with the public interest can compete with them. Soros has always focused his political giving on grass-roots organizing and holding conservatives accountable for the flawed policies they promote. His support of these groups is consistent with those views.” President Obama’s reelection campaign is in the process of unleashing a $25 million ad campaign against the presumptive Republican nominee, Mitt Romney (R-MA), directed and financed by the campaign itself. Romney and other Republicans have relied more heavily on “independent” spending by American Crossroads, AFP, and other “third party” groups. An Obama-aligned super PAC, Priorities USA Action, has raised relatively little money in comparison to its Republican counterparts, though it has been active in some battleground states (see May 2, 2012). Obama’s opposition to super PACs and his reluctance to have his campaign rely on their efforts (see January 18, 2012) has slowed super PAC fundraising efforts on his behalf, though he has recently given his approval for the group to operate at maximum capacity (see February 6, 2012). David Brock, the founder of American Bridge 21st Century and the liberal watchdog organization Media Matters for America, says, “The idea that we’re going to engage in an arms race on advertising with the Republicans is not appealing to many liberal donors.” While Priorities USA and two other groups founded to help Democrats in Congress remain on the list of organizations that the Democracy Alliance recommends to its members, Robert McKay, the chairman of the group and a board member of Priorities USA, says that much of the money expected to be spent this year—up to $100 million—by the group’s donors will go to organizing and research, and far less to television advertising. “There is a bias towards funding infrastructure as it relates to the elections,” McKay says. “That means get-out-the-vote efforts” aimed at minority voters, women, and younger voters. Organizations involved in Democracy Alliance include Catalist, a voter database organization; ProgressNow, which organizes Internet-based groups in different states; and the newly created Latino Engagement Fund, an organization that works to organize Latino voting on behalf of Democrats. Groups outside Democracy Alliance will also be involved, particularly labor unions and advocacy groups such as the Sierra Club. San Francisco philanthropist Steve Phillips, who intends to spend some $10 million on efforts to increase turnout among Latino voters, says: “You can dump 10 or 20 million in TV ads in Ohio and try to reach the persuadable swing voters there, or you can up voter turnout among Latinos in Colorado and Arizona and win that way. It’s much cheaper.” [New York Times, 5/7/2012]

Entity Tags: American Crossroads, Steve Phillips, Willard Mitt Romney, 2012 Obama presidential election campaign, Robert McKay, American Bridge 21st Century, Rob Stein, New York Times, Americans for Prosperity, David Brock, Priorities USA Action, Michael Vachon, America Votes, George Soros, Democracy Alliance

Timeline Tags: Civil Liberties, 2012 Elections

Sheldon Adelson and his wife Miriam have given $10 million to the super PAC supporting presumptive Republican presidential nominee Mitt Romney, and a source close to Adelson says the billionaire’s further donations will be “limitless.” Adelson owns a global network of casinos, including the Las Vegas Sands and a consortium of casinos on the Chinese island of Macau. Adelson, one of the world’s 15 richest people, once supported Republican presidential candidate Newt Gingrich, donating over $21 million to Gingrich’s failed candidacy, and said he was willing to give up to $100 million to keep Gingrich’s candidacy viable. Forbes reporter Steven Bertoni says that Adelson may be willing to give hundreds of millions to the Romney election effort (see March 26, 2012). “[N]o price is too high” to defeat President Obama’s re-election, says the source close to Adelson. Obama is presiding over what Adelson calls the “socialization” of America, and the source says Adelson considers this the most important election of his lifetime. Because of the Citizens United decision (see January 21, 2010), Adelson faces no restrictions whatsoever on the amount of money he can donate to super PACs supporting Romney. The current recipient of Adelson’s largesse is Romney’s campaign super PAC, Restore Our Future. (To give context, Bertoni writes, “The $10 million donation he just made to Romney is equivalent to $40 for an American family with a net worth of $100,000.” He also notes that Adelson has seen his personal and business profits soar during the Obama administration.) Adelson says: “I’m against very wealthy people attempting to or influencing elections. But as long as it’s doable I’m going to do it. Because I know that guys like [billionaire George] Soros have been doing it for years, if not decades. And they stay below the radar by creating a network of corporations to funnel their money (see January - November 2004). I have my own philosophy and I’m not ashamed of it.” Adelson’s primary cause is the security of Israel and its right-wing government. Adelson is also firmly against the Obama administration’s economic policies, telling Bertoni: “What scares me is the continuation of the socialist-style economy we’ve been experiencing for almost four years. That scares me because the redistribution of wealth is the path to more socialism, and to more of the government controlling people’s lives. What scares me is the lack of accountability that people would prefer to experience, just let the government take care of everything and I’ll go fish or I won’t work, etc. US domestic politics is very important to me because I see that the things that made this country great are now being relegated into duplicating that which is making other countries less great.… I’m afraid of the trend where more and more people have the tendency to want to be given instead of wanting to give. People are less willing to share. There are fewer philanthropists being grown and there are greater expectations of the government. I believe that people will come to their senses and not extend the current administration’s quest to socialize this country. It won’t be a socialist democracy because it won’t be a democracy.” [Forbes, 6/13/2012; Huffington Post, 6/16/2012]

Entity Tags: Restore Our Future, George Soros, Barack Obama, Miriam Adelson, Obama administration, Steven Bertoni, Newt Gingrich, Willard Mitt Romney, Sheldon Adelson

Timeline Tags: Civil Liberties, 2012 Elections

A bar graph issued by the Center for Responsive Politics shows, in the words of the liberal news Web site Think Progress, why Republicans are so strongly in favor of the January 2010 Citizens United decision that lifted restrictions on corporate donations for election and campaign purposes (see January 21, 2010). In 2010, the first election cycle that the decision was in effect, conservative outside groups outpaced liberal/progressive outside groups in spending for the first time since 1996. The data, compiled by the Center, is as follows:
1990 - Conservative outside groups outspent liberal outside groups $3.2 million to $2.4 million.
1992 - Conservative outside groups outspent liberal outside groups $9.4 million to $7.1 million.
1994 - Conservative outside groups outspent liberal outside groups $6.3 million to $2.6 million.
1996 - Liberal outside groups outspent conservative outside groups $9.9 million to $6.5 million.
1998 - Liberal outside groups outspent conservative outside groups $7.5 million to $5.2 million.
2000 - Liberal outside groups outspent conservative outside groups $29 million to $17 million.
2002 - Liberal outside groups outspent conservative outside groups $17.9 million to $4.6 million (see March 27, 2002).
2004 - Liberal outside groups outspent conservative outside groups $121.3 million to $68.5 million (see January - November 2004).
2006 - Liberal outside groups outspent conservative outside groups $38.7 million to $19.6 million.
2008 - Liberal outside groups outspent conservative outside groups $159 million to $120.3 million.
2010 - Conservative outside groups outspent liberal outside groups $183.3 million to $98.9 million (see January 21, 2010).
2012 (to date) - Conservative outside groups outspent liberal outside groups $166 million to $46.9 million.
The chart shows that outside spending was on the rise well before the Citizens United decision, but, as Think Progress legal analyst Ian Millhiser wrote in May 2012: “[A]nother trend is also clear. Prior to Citizens United, which was decided in 2010, left-leaning groups held a moderate-to-significant advantage in election spending. After Citizens United, conservatives absolutely dominated the field.” Millhiser acknowledged that Republican primary spending in the first few months of 2012 played a significant role in the $119.1 million disparity. “Nevertheless, the last two election cycles suggest that conservatives will continue to benefit from Citizens United even once the general election kicks into full gear,” he wrote. ”Citizens United gave such a boost to Republican candidates that outside spending by conservatives grew by more than $70 million from 2008 to 2010, even though 2008 was a presidential election year and outside spending has historically been much higher in these cycles than in off-year [midterm] elections.” [Think Progress, 5/2/2012; Center for Responsive Politics, 8/2012]

Entity Tags: Ian Millhiser, Center for Responsive Politics, Think Progress (.org)

Timeline Tags: Civil Liberties

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