POLITICS

Spending soars as outside groups seek campaign influence

Rebekah L. Sanders
The Republic | azcentral.com

Political ads critical of U.S. Rep. Ron Barber, D-Ariz., began playing on television stations across southern Arizona last year. It was 13 months before voters would

enter a voting booth to choose between the Tucson Democrat and his Republican opponent.

Americans for Prosperity has spent $650,000 this election cycle on ads criticizing U.S. Rep. Ron Barber, D-Ariz.

The well-funded conservative group behind the ads, Americans for Prosperity, timed them to the fumbled rollout of the Affordable Care Act.

All told, Barber and fellow Arizona Democrat Rep. Ann Kirkpatrick were hit with $1.8 million in ads funded by the group over the next three months.

More:More lawmakers pushing identical bills written by national groups

The ads were a visible sign of the unprecedented cash that outside groups — political organizations that are separate from candidates and their campaigns — have poured into Arizona congressional races since the Supreme Court loosened campaign-finance rules.

More than 100 groups have sought to influence the state's U.S. Senate and House races in the past three election cycles. Their push to influence voters ahead of Election Day arrived earlier than ever this cycle.

Political spending nationwide by independent-expenditure groups exploded after Supreme Court decisions in 2007 and 2010 opened the door for groups to raise hundreds of millions of dollars to sway elections, much of it from anonymous donors.

"It opened the floodgates," said Annie Presley, former national deputy finance director for President George W. Bush's first campaign.

An Arizona Republic analysis of data from the Center for Responsive Politics shows that spending by outside groups in Arizona congressional races more than tripled between 2010 and 2012, from $12million to $42 million. Both of those elections featured expensive U.S. Senate races. The center is a Washington, D.C.-based nonpartisan non-profit that tracks money in American politics.

If the current pace of spending continues, outside groups will inundate Arizonans with more political ads this year than ever before, even without a Senate race on the 2014 ballot.

Through January, the groups had paid out at least 22 times the amount spent in the same period in 2010, excluding party spending and purchases of issue ads not reported to the Federal Election Commission.

It remains to be seen if the pace will continue.

The state has fewer competitive races than in years past. But Arizona offers an uncommon opportunity for Republicans to claim as many as three toss-up House seats held by Democrats. And a crowded primary for a safe Democratic House seat in Phoenix is set to attract outside groups that work to elect Latino, women, gay and veteran candidates.

A new tributary could add to the flood of money, this time streaming to candidates and parties themselves.

The Supreme Court ruled last week that donors could support an unlimited number of candidates and party committees, overturning decades-long restrictions.



Appetite for money

Presley, the former Bush fundraiser and a Kansas City attorney who spent 18 years in political fundraising, was amazed by the growth in spending by outside groups in Arizona elections.

"Holy cow," she said. "People have been stunned by the amount of money that has moved into (politics) so quickly" since the Supreme Court decided the landmark 2010 case Citizens United vs. Federal Election Commission.

The court ruled that individuals, corporations and labor unions could contribute unlimited amounts to political groups, some of which aren't required to disclose donors.

"There was a greater appetite out there than anybody realized," Presley said.

Additional millions are spent on "issue" ads, which don't explicitly call for a candidate to be elected or defeated but nonetheless can influence voters. Unless they air in the weeks prior to an election, the groups that fund them aren't required to report it to the FEC as political spending.

A Republic review of more than 600 Federal Communications Commission records showed outside groups spent at least $700,000 on issue ads that aired outside the reporting window in Arizona congressional races since mid-2012. Television stations submit the records to the agency.

Their reports provide an incomplete picture, however, since they include only the major four networks and go back to only June 2012. And they don't include the money spent to produce ads.

But they hint at the size ofanother part of the political money game.

The proliferation of money has meant voters are bombarded with more election-related television ads and radio spots than ever, as well as increasingly sophisticated Web outreach and grass-roots organizing efforts.

Some of the biggest outside spenders have seen the candidates they support win.

But others have been criticized for wasting colossal amounts of money, like Karl Rove's American Crossroads, which spent $176 million in 2012 to defeat President Barack Obama and other candidates and succeeded in only one of its targeted elections.

Critics say the veil of donor anonymity and spotty reporting rules leave voters in the dark about who is trying to influence their vote and to what end. They warn that the deluge of ads could turn off some voters and increase public distrust of the election process.

Some have criticized the outside groups for allowing special interests, instead of constituents, to set the agenda for what an election is about.

"What the average voter is getting is a lot of commercials and radio ads, but what they are not getting is a lot of debate on the issues," said Jessica Levinson, who teaches election law at Loyola Law School in Los Angeles. "What it sets up is the candidates aren't necessarily the most important speakers. Sometimes it's these shadow campaigns of independent-expenditure groups. And many times it's not terrifically informative or educational. It sets up a world in which the voters need to be even more on alert to the true identity of these spenders and what their agenda might be."

Last election, an outside group supporting U.S. Rep. David Schweikert, R-Ariz., played a prank to attract media attention, sending opponent Rep. Ben Quayle a Hawaiian-print Speedo.

Political groups seeking to influence Arizona congressional elections are spending more than ever. National Horizon is one example. The orange Speedo the group bought for a prank against then-Rep. Ben Quayle, R-Ariz., cost pocket-change, but by the end of the 2012 election, the group had pumped more than $200,000 into the race.

National Horizon's cheeky stunt did little to inform voters about policy. But it reinforced the tone of the campaign, insinuating Quayle was a party boy unfit for office. The group also spent more than $200,000 on television ads that dubbed Quayle, the son of a vice president, a "prince."

But supporters of independent-expenditure groups defend their spending as contributions to the public debate over who should lead the country and how they should address important issues. They argue that the anonymity of donors protects free speech.

Sean Noble, an Arizona political consultant who helped one of the most powerful networks of conservative groups spend millions to influence elections across the country in 2012, said the attacks on outside groups are politically motivated. California officials forced groups tied to Noble to disclose their donors and pay $1 million in fines in a lawsuit last year.

"This push — mostly by the far left — of trying to demand disclosure of who's giving money is for two reasons: One, they want to make an issue of who's paying for it and not the debate, because they can't win the debate; and two, they want to know who to target ... protest and harass," Noble said.

One thing campaign-finance experts and outside groups agree on: Money in politics is going to get bigger.

"This is an arms race that is going to continue to build," said Matt Thornton, spokesman for House Majority PAC, the top outside Democratic spender in the state after the national party since 2010.



Toss-up races

The political arms race is most prominent this year in Arizona's three toss-up U.S. House elections — in Districts 1, 2 and 9 — where both parties have an opportunity to win.

After last election's drubbing in races for the three seats, conservative groups began attacking the incumbent Democrats early.

Since last fall, the groups have spent at least $2.6 million against the incumbents, an unprecedented amount at this point in an election cycle.

The money has gone to issue ads, so most of the spending was not reported to the FEC. The groups provided the amounts at The Republic's request.

The biggest spender, Americans for Prosperity, hammered Democratic Reps. Ron Barber and Ann Kirkpatrick between October and January as part of a more than $30 million nationwide campaign targeting vulnerable Democrats.

The ads largely criticized the Affordable Care Act as problems plagued the healthcare.gov website.

In one ad, a woman looks intently into the camera.

"People don't like political ads. I don't like them either," she says. "But health care isn't about politics. It's about people."

"Stop Obamacare before it gets worse," the ad reads, as it displays the Tucson congressman's phone number.

Americans for Prosperity did not respond to requests for comment.

The group is not required to report its spending on the ad to federal officials because it ran long before the election and the script avoided campaign-specific phrases like "vote against."

A Supreme Court ruling in 2007 freed groups to spend on ads that mention candidates if they don't expressly advocate for or against a candidate.

But the Democratic Congressional Campaign Committee and House Majority PAC treated the ads against Barber and Kirkpatrick as though they were just as damaging to their re-election prospects.

They responded to the conservative spots with more than $300,000 in issue ads to defend the Democrats.

Another round of TV ads by a different group, Center Forward, at a cost of $200,000 to support Barber and fellow targeted Democrat Rep. Kyrsten Sinema ended today.

"We're never going to be able to match (Republicans) dollar for dollar. We have to just be smarter," said Thornton of House Majority PAC, which spent more than $2 million in 2012 to help the Democrats win Arizona's toss-up seats. "There's no doubt that the ads we have been running and the effort we've put into these races have had an effect."

For example, Center Forward has spent $200,000 this election cycle on ads supporting Democratic U.S. Reps. Kyrsten Sinema (pictured) and Ron Barber.

Conservative outside groups have outspent liberal groups nationally since 2010. But in Arizona last election they were nearly even in political spending reported to the FEC.

Presley, the former Bush fundraiser, said it's likely to be the same this year. The groups are investing massive amounts because they know their money can make a difference.

"Toss-up races get a lot of play," she said. "There are tons of people now who are working for these organizations that are designed specifically to raise money for their topic or their type of candidate."

Close ties to candidates

Federal rules prohibit outside political groups from directly coordinating with candidate campaigns.

But often the groups have close ties to the candidate they're supporting, as was the case with National Horizon, the group that sent Quayle the orange Speedo.

The group had been formed with the help of Schweikert's chief of staff, Oliver Schwab.

He resigned abruptly during the campaign and went to work for National Horizon.

Groups also get around the rules prohibiting them from coordinating by jointly hosting fundraisers with the candidates they're supporting. And they can use images and video that candidates post publicly online.

On the advice of attorneys, Schwab said he stayed out of National Horizon's discussions about messaging and advertising. But he used his connections with Schweikert's top donors to raise money.

Without National Horizon, Schweikert would have fought solo against Quayle and his well-
financed supporters.

An outside group backing Quayle, Friends of the Majority, poured nearly $750,000 into the race on his behalf.

"(Creating National Horizon was) one of the most important ways to make sure that David was safe," Schwab said in a recent telephone interview from Washington, D.C. "Imagine if that $750,000 (spent by Friends of the Majority) didn't have a single response. … When you're looking to win an election … you don't leave anything to chance."

On primary-election night, Schweikert won. Four days later, Schwab returned to the congressman's staff.

National Horizon soon ceased operations, as did Friends of the Majority.

Donors not ID'd

Critics of the explosion in outside spending worry the rise of groups that take money from anonymous donors prevents voters from making informed decisions.

Outside groups like Americans for Prosperity, known as "social welfare" non-profits, can accept millions from individuals, corporations and labor unions, but they do not have to disclose their donors, even as they spend a portion of their budgets on politics.

These 501(c)(4), 501(c)(5) and 501(c)(6) groups,named for sections of the tax code governing federal tax-exempt non-profits and trade groups, are sometimes referred to as "dark money" since the public can't learn from the groups' disclosure documents who gave money.

Phoenix election attorney Tom Irvine argues the public should know donors' identities. Voters make judgments based on who is speaking, he said.

"That's the tradition of politics," said Irvine, a partner at the law firm Polsinelli with more than 30 years of experience in campaign law on behalf of Republicans and Democrats. "If you had something political to say, you stood on the soapbox in the middle of the square, and people knew who you were."

If donors fear being known, they shouldn't give money, Irvine argues. But he doesn't see a need for them to fear retribution, citing decades of required disclosure of contributions to candidate campaigns.

But Noble, a veteran of the 501(c)(4) network bankrolled in part by the billionaire Koch brothers, says anonymity protects donors from retaliation similar to the 2008 boycotts of businesses that supported California's Proposition 8, an anti-gay-marriage measure.

On Thursday, pressure from gay-marriage advocates forced Brendan Eich, chief executive of tech company Mozilla, to resign two weeks after taking the job, after an outcry over his $1,000 donation six years ago to the Prop. 8 campaign.

Noble said what matters to voters is the message, not who funded an ad or campaign.

"Those crying for 'transparency' fundamentally don't trust the people. They think they have to be spoon-fed and coddled and told, 'You should not listen to that message because this is who's saying it,'" Noble said. "But voters are smart. ... People instinctively understand there are free-speech rights being undertaken. And that is more important than what these transparency folks are trying to claim."



More limits axed

As their influence has grown, outside groups in Arizona races have come close to overtaking spending by candidates.

When spending on issue ads is included, they may already have.

But last week's Supreme Court ruling in McCutcheon vs. FEC could shift money away from outside groups back to candidates and party committees, starting this election.

Previously, a donor could give only $123,200 per two-year cycle, equal to giving the maximum legal amount to nine candidates and seven political-action committees, according to the Center for Responsive Politics. But the court, voting 5-4 on Wednesday, struck down the overall limit.

Now, a wealthy benefactor could write checks to a vast array of candidates and committees, a total of donations that could run into the millions.

"People might start pulling away from outside groups to give to candidates," said Levinson, the Loyola professor.

That could increase transparency, she said, as long as federal campaign rules remain in place that require candidates and committees to disclose their donors.

But it could bring politics even closer to pre-Watergate days, before campaign-finance limits were adopted to combat corruption, or at least the appearance of corruption, Levinson said.

Legislative changes to rein in outside groups so far have been non-starters. A few Arizona legislators have sought to tighten restrictions in recent years without success.

Congress looks unlikely to attempt to either, at least anytime soon.

Republic reporter Rob O'Dell contributed to this article.