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Posted Apr 26, 2012, 6:46 am
Contrary to expectations, the much-criticized court decisions that gave us "super PACs" have not led to a tsunami of contributions flowing from the treasuries of Fortune 500 corporations — at least not yet anyway.
What the Citizens United decision and a lower court ruling have done is make household names out of a bunch of relatively unknown, very wealthy conservatives. Of the top 10 donors to super PACs so far in the 2012 election cycle, seven are individuals — not corporations — and four of those individuals are billionaires.
The top 10 contributors gave more than a third, or $68 million of the nearly $202 million reported by the outside spending groups this election, according to a Center for Public Integrity analysis of Federal Election Commission records.
Rounding out the top 10 are two labor unions and a physicians' medical malpractice insurance group.
The top donor list is mostly Republican, which is not surprising given the competitive GOP presidential primary season. Even so, Democrats have had less success in raising money for super PACs so far.
In 2010, the U.S. Supreme Court and a lower court set the stage for the new super PACs.
Such organizations can accept unlimited contributions from corporations, unions and individuals to spend on advertising supporting or opposing a candidate, but are not permitted to coordinate their spending with campaigns, though many employ former campaign operatives.
No. 1 on the donor list by far is billionaire casino owner Sheldon Adelson and family, who gave $26.5 million. Nearly all of it was spent in a fruitless effort to elevate former House Speaker Newt Gingrich to the GOP presidential nomination through donations to the pro-Gingrich super PAC "Winning Our Future." Another $5 million went to a group aimed at electing Republicans to the House.
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Adelson, 78, ranks 8th on the Forbes 400 list of the nation's richest people with a net worth estimated at $21.5 billion. He is an outspoken supporter of Israel and backed Gingrich's comment that Palestinians are "an invented people."
No. 2 Harold Simmons, an 80-year-old Texan, ranks 33rd on the Forbes list with a net worth estimated at $9.3 billion. He gave $16.7 million, which includes $3 million from Contran Corp., in which he has a 95 percent interest.
Simmons, and his wife, Annette, have given to six different super PACs this cycle, but the conservative group American Crossroads, co-founded by Karl Rove, former adviser to President George W. Bush, is by far his favorite. Simmons has given the super PAC $12 million in the 2012 election cycle.
Contran is in a wide range of businesses, including chemical manufacturing, metals and waste management. Simmons has been very public in his dislike of President Barack Obama calling him a "socialist" in an interview with the Wall Street Journal and "the most dangerous American alive … because he would eliminate free enterprise in this country."
Third on the list is another Texan, homebuilder Bob Perry. Perry, one of the GOP's most active and prolific donors over the past decade, is a relative piker compared to Adelson and Simmons. He's not on the Forbes list. Of his $6.7 million in donations, $3.5 million has gone to the pro-Mitt Romney super PAC Restore Our Future and $2.5 million has gone to American Crossroads.
The National Education Association, the nation's largest union, was fourth at $3.6 million. It gave $3 million to its super PAC, the NEA Advocacy Fund, which has yet to spend any money on advertising this year. Ranked eighth is the AFL-CIO, with $2.3 million in donations, virtually all of it going to its Workers' Voices super PAC.
Rounding out the top 10 is an unlikely super donor, the Cooperative of American Physicians. The co-op gave all its money — nearly $2.6 million — to a super PAC of the same name. The group consists of California doctors who buy medical malpractice insurance through the organization. The doctors want lower malpractice insurance rates and smaller awards in medical malpractice judgments.
Courts change the game
This marks the first presidential election following the landmark Citizens United v. Federal Election Commission case, decided in January 2010. The conservative majority of U.S. Supreme Court justices ruled that spending on independent messages that support or oppose federal candidates by corporations and labor unions does not lead to corruption.
A few months later, a federal court cited this rationale in SpeechNow.org v. Federal Election Commission. That decision led directly to the creation of super PACs. It said that outside spending groups — like American Crossroads, for example — could accept unlimited contributions from corporations, unions and individuals to be spent on political ads.
Previously, if a group wanted to expressly advocate for or against a federal candidate, it could only collect $5,000 per person per year.
If an independent group were to raise $5 million for high-profile TV ad campaign advocating against the president or members of Congress, it would need at least 1,000 donors in a year to give the legal maximum. Now, one wealthy individual can single-handedly give a super PAC the cash it needs — and change the political dynamics of a race overnight.
Washington, D.C.-based attorney Dan Backer, a proponent of super PACs, suspects that much of the money flowing to these nascent groups will come from "the same folks who've always contributed," though he also argues that super PACs will allow more people to get involved and have their voices heard.
Backer said the money "translates into information that empowers voters."
Bob Edgar, a one-time Democratic congressman from Pennsylvania who now heads the advocacy group Common Cause, is among those who have railed against the prospect of deep-pocketed corporations and individuals spending big sums ahead of the 2012 election.
"There's no limit on the amount of money that can enter a political campaign," he said.
Edgar admits he is surprised that fewer corporations haven't flexed their political muscle by giving to super PACs, but he predicts that a few "brand-sensitive" corporations will wade into the super PAC water.
"Corporations are discovering that they have to be careful," he said. "They can tarnish their brands if they are seen as meddling in partisan politics."
However, there is a way for donors to go unnoticed. Nonprofits organized under section 501(c)(4) of the U.S. tax code can accept unlimited contributions and spend the money on ads, just like super PACs, but they aren't required to reveal their donors.
In fact, 62 percent of the $123 million raised by American Crossroads, the super PAC, and Crossroads GPS, the nonprofit, through the end of 2011 came from mystery donors, according to a Center for Public Integrity analysis of tax and campaign finance records.
So there may indeed be a flood of money from big corporations headed into the 2012 election — we just won't see it.
Reprinted by permission of The Center for Public Integrity.