Big Money Breakdown: Why 2012 Is the Most Expensive Election Ever

While the Obama campaign relied heavily on a groundswell of small donations from grassroots support, Romney’s war chest came from anonymous big-money donors under the unfettered provisions of Citizens United.

The 2012 election season will be the most expensive in history. The Center for Responsive Politics (CRP) estimates total spending to total about $6 billion, topping the next most expensive election by $700 million.

Outside spending by nonprofits and super-PACs is a driving force behind the record-setting numbers. The CRP estimates spending by these “independent” outside groups will top $970 million, and with spending by traditional political action committees (PACS) included, that total outside spending tops $1 billion.

An overwhelming majority of outside spending benefited conservative causes and Republican candidates, allowing GOP presidential candidate Mitt Romney to close in on President Obama’s fundraising advantage.

In the broader election, an estimated $577 million, or 69 percent, of outside super-PAC and nonprofit spending supported conservative causes, and $237 million went to liberal candidates and causes, CRP reports.

The Supreme Court’s 2012 decision in Citizens United v. FEC opened the outside spending floodgates by allowing super PACs and nonprofits to raise and spend unlimited amounts of electioneering funds from corporations, unions and other large donors.

“In the new campaign finance landscape post-Citizens United, we’re seeing historic spending levels spurred by outside groups dominated by a small number of individuals and organizations making exceptional contributions,” said CRP Executive Director Sheila Krumholz.

The Obama campaign raised more than $632 million during the 2012 election season, about 62 percent more than the Romney campaign’s $389 million. When factoring fundraising by the Democratic and Republican National Committees, the Obama re-election team still topped Romney’s by $166 million.

Romney received an equalizing boost from $350 million in outside spending, while Obama benefited from about $100 million from outside groups. As Election Day arrives, Romney and Obama remain nearly tied in the polls.

The pro-Romney effort relied heavily on big donations from wealthy donors who supported his campaign and pro-GOP outside spending groups. The Romney campaign raised more than four times more money from large individual donors than from small donors.

The Obama campaign relied heavily on a groundswell of small donations from grassroots support, with 34 percent of the Obama war chest made up of donations of $200 or less. The total amount of money the Obama campaign raised from donors who gave more than $200, however, amounted to about twice as much as was raised from small donors who gave less than $200.

Unlike official campaigns and traditional political action committees, nonprofits and super-PACs can rake in unlimited donations, allowing wealthy donors to spend big. About 40 donors to these outside groups have injected more than $200 million into the campaign, according to the CRP. In contrast, it took about 350,000 people to generate the $71 million in small donations enjoyed by the official Romney campaign.

The pro-Romney group Restore Our Future was the top spender among super-PACs with more than $138 million spent. A large chunk of the group’s expenditures went to defeating Romney’s GOP rivals in the primaries. Fundraising by Restore Our Future accounted for 1$ out of every $5 dollars received by all super-PACs, and the group has raised more than $131 million.

In contrast, the pro-Obama super-PAC Priorities USA Action raised about $64 million.

The presidential race alone accounts for about $2.6 billion and generated more than 1 million TV ads across the country.

GOP Benefits From Dark Money

A major fixture of the post-Citizens United world are nonprofit groups that are not required to reveal their donors but spend massive sums on political ads.

The CRP estimates that pro-GOP nonprofits outspent their Democratic counterparts by at least eight times. It may take years to determine how much these groups actually spent, which includes at least $203 million in the last two months, and the names of donors who provided a majority of the cash may never be known due to nonprofit reporting loopholes.

These nonprofits are often tax-exempt “social welfare” groups or business leagues and are clearly set up to support particular candidates, according to CRP. Such groups are only required report ad expenditures to the Federal Elections Commission (FEC) if their ads encourage viewers to vote for or against a particular candidate, or mention a candidate’s name shortly before or after a major political convention.

The largest of such groups, GOP strategist Karl Rove’s “social welfare” nonprofit Crossroads GPS, claims to have spent $120 million since January 2011, according to CRP. FEC records indicate the group has spent at least $12 million attacking President Obama. Combined with its super-PAC counterpart American Crossroads, Rove’s groups have reported spending more than $158 million.

Super PACs must reveal their donors, but these “dark money” nonprofits can funnel funds through super-PACs, which simply report the name of the nonprofit to the FEC instead of the original source of the campaign cash.

Are Single-Candidate Super-PACs Independent?

A majority of the major super-PACs were active in only one contest and effectively served to support one candidate, according to a recent report by Public Citizen. Many of these single-candidate committees were founded, financed or managed by political allies or friends and family members of the candidate.

Of the 108 super-PACs that spent at least $100,000 through mid-October, 65 were active in just one race, according to Public Citizen. These 65 super-PACs spent approximately $203 million through mid-October.

“Single-candidate super-PACs are making a mockery of the campaign finance system,” said Taylor Lincoln, Public Citizen researcher and author of the report. “Donors seeking to dodge contribution limits can simply give unlimited amounts to the candidate’s super-PAC.”

Public Citizen argues these single-candidate super-PACs cannot be considered truly independent because they only support one candidate, and are some are run by political allies and even family members of the candidates they support.

In practice, super-PACs allow big donors to avoid campaign donation limits by giving to an “independent” group that is closely aligned with a particular candidate.

This undercuts the Supreme Court’s Citizens United ruling, Public Citizen argues, which was premised on the assumption that donations by corporations and third-party groups to super-PACs were “independent” and would not risk corrupting the candidate they support.

“In Citizens United, the court claimed that outside expenditures are not corrupting even while it maintained its view that large contributions to candidates are,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. “This report shows that those views are irreconcilable.”

In the past, super-PACs made headlines in the presidential race, but this year 39 super-PACs supported a single congressional candidate, according to Public Citizen.

CRP reports that super-PACs solely supporting one candidate spent $28 million on the 2012 election, with most of the money – about $22 million – in support of conservative candidates.

Negative Ads

Why are so many negative attack ads blaring on the TV screen? In order to maintain an image of independence from the candidates they support, outside groups tend to run negative ads attacking their preferred candidate’s opponent instead of supporting a preferred candidate directly.

FEC rules prohibit coordination between official campaigns and independent groups, but many super-PACs skirt these rules by hiring former campaign operatives and running attack ads against a candidate’s opponent.

The top 15 outside groups spent more than $600 million in the 2012 election cycle, and nearly 86 percent of that money was spent opposing a particular candidate, according to Public Citizen.

The pro-Obama super-PAC Priorities USA Action spent 100 percent of its $67 million worth of expenditures on opposition ads, presumably to attack Mitt Romney and the Republican platform. The pro-Romney groups Restore Our Future and Crossroads GPS spent about 90 percent of their expenditures, about $137 million and nearly $100 million respectively, on negative ads, presumably against Obama and the Democrats.

Americans are not responding to the negative ad deluge favorably, and most are fed up with unfettered campaign spending by outside groups in general. A recent poll conducted by reform groups show that 9 in 10 Americans agree that there is too much corporate money in politics, and 51 percent strongly agree. In addition, 81 percent of Americans agree that corporate political spending “drowns out” the voices of average Americans, and corporate CEOs have too much political influence.

“Americans deserve a democracy in which all people are equal and all voices are heard, not one where corporations can spend secret millions and create dependencies so our elected representatives are beholden to their interests,” said Liz Kennedy, a counsel at Demos, a research and advocacy group that analyzed the poll results. “Americans have a right to know who is trying to buy our elections, and the time is long since passed to enact strong, common sense requirements to ensure transparency and accountability.”