The Daily Beast: The Super-PAC Economy

September 18th, 2012

The Daily Beast
September 18, 2012
By John Avlon and Michael Keller.

Beneath the still struggling American economy, there is a gold rush going on. An unprecedented $5.8 billion will be spent in this election cycle, $2.5 billion in the presidential election alone. Much of this money will be spent not by campaigns, but by two kinds of outside organizations: super PACs and social-welfare groups, also known as 501(c)(4)s.

This isn’t just democracy. It’s big business. “This is the greatest windfall that ever happened for political operatives in American history,” says Democratic consultant Hank Sheinkopf. “It allows them to make extraordinary amounts of money for work whose effectiveness is hard to determine.”

Thanks to Citizens United and other court decisions, super PACs and 501(c)(4)s now enjoy the ability to accept and spend unlimited contributions. With the final stretch of the campaign about to start in earnest, The Daily Beast—in partnership with the Center for Responsive Politics—has taken a detailed look at just how profoundly this influx of money is reshaping our politics. Today we’ll provide an overview of the new world of campaign spending and look specifically at how it’s allowing some consultants to get very rich. Wednesday, we’ll take a closer look at 501(c)(4)s. And Thursday, we’ll examine how government regulations are failing to help. (Click here to see an interactive timeline of the rise in 501(c)(4) spending.

To start, consider just one measure of the growing influence of money in our political system: Back in the presidential election cycle of 2008, express advocacy in the campaign as of mid-September totaled about $65 million. This time around, with two months to go in the election, that figure has already been eclipsed by a single super PAC—the pro-Romney Restore Our Future, which has outraised the pro-Obama Priorities USA Action by a 5–1 margin.

Some 844 super PACs are currently in existence—and only 100 distinct donors account for nearly 59 percent of the $350 million donated to these entities to date. Perhaps the most noteworthy of these groups is the Karl Rove-founded Crossroads empire. Its influence spreads across the conservative community with multiple entities—a super PAC as well as other organizations. Already they have spent $85 million on television ads.

One upshot of the enormous spending by super PACs is that 70 percent of television ads early this cycle were negative, compared with just 9 percent in 2008, according to the Wesleyan Media Project. After all, if you’re spending super PAC money on positive ads, you’re doing it wrong. The whole point is plausible deniability. “One of the reasons that candidates love the super-PAC model is that it keeps their wife from saying, ‘Oh honey, please don’t run that negative ad, my friends at the country club hate it,’” laughs longtime Republican consultant Rick Wilson, who currently counts a half dozen super PACs as clients. “I’ve had that conversation literally dozens of times.”



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