Super PACs Make It Rain

It’s no secret that super PACs skew toward the wealthy set. However, a new study from Demos (editor's note: Demos is The American Prospect's publishing partner) and U.S. PIRG highlights how few people are running the money game this election cycle and how secret some of their contributions can be. Since the birth of super PACs in 2010 until the end of 2011, 93 percent of the itemized funds raised by super PACs from individuals were more than $10,000. That’s only 726 people. To put that in perspective, more people voted for perennial Democratic candidate Vermin Supreme in the New Hampshire primary this January—831—than contributed more than $10,000 to a super PAC in 2010-2011. Only 35 individuals have donated more than $1 million.

Although wealthy individuals accounted for 56 percent—or $100 million worth—of super PAC donations, corporations and nonprofits, which were freed by the Supreme Court in the Citizens United decision to make unlimited contributions to these organizations, also had their sayMore than $30 million of super PAC funds have been raised by for-profit businesses—17 percent of total super PAC fundraising. But there is still 6.4 percent of total super PAC funds that are untraceable, coming from 510(c)(4) nonprofit organizations, other super PACs, or shell corporations that can get away without reporting individual contributions.

Secret money may also jump up as the election season progresses. For most of 2011, the amount of untraceable money averaged $110,674 a month but jumped to more than a million in the month before the GOP primary began. Prior to the 2010 elections—the first test of super PACs’ fundraising might—secret money also skyrocketed. In the first nine months of 2010, secret-money donations averaged $169,566 a month. In the month before the election, $7,540,857 of untraceable funds were funneled into campaigns. It seems safe to assume that the amount of secret money in the campaigns will dramatically increase the closer we inch to Election Day this year, too.

The report hypothesizes that as we get closer to November 2012—the biggest election since Citizens United—the donations will get larger and potentially harder to track. In 2010, the average itemized contribution from an individual to a super PAC was $8,460. In 2011, the figure jumped to $21,380.

With President Barack Obama’s announcement Monday to Democratic donors that they should start fundraising for Priorities USA—the top pro-Obama super PAC—there is no doubt that both parties are ready to fling even more money at the election cycle from wealthy donors. Many have criticized Obama for choosing to use super PACs in his re-election campaign given his stated opposition to Citizens United, but his defenders say that the battle to reform campaign finance is one that hinges on his re-election; if Obama can’t play on the same battlefield as Romney, the goal to keep unlimited corporate money out of elections will remain unreachable.

“It’s pretty obvious he’d like to operate in a world without super PACs,” says Thomas Mann, a senior fellow at Brookings and an expert witness in the constitutional defense of the 2002 McCain-Feingold campaign-finance reform, “but he hasn’t been able to change that, partly because of the filibuster, partly because of the court. But, if you want those things changed, the last thing you do is withdraw your support from Obama, because he’s the only hope one has of appointing new Supreme Court justices or getting some laws passed through Congress, even of getting energy into a movement for a constitutional amendment. You can be sure if Romney’s elected and Republicans have majorities in Congress, nothing will change.”

Although coverage of the super PACs has been almost exclusively trained on the GOP primary and the presidential election, the battleground where super PACs first tested their power—in congressional districts—is where they'll have the most impact; according to the report, this is where super PACs have the most potential to swing an election and influence long-term changes in national policy. As Mann points out, “Much more worrisome than its impact on presidential elections is its impact on House and Senate elections.”

When you dump $1 million into a presidential campaign, it’s a drop in a very large bucket, especially when you consider that Obama has his own impressive fleet of small donors that are expected to help push him over $750 million. But add $1 million to a close House or Senate race, and it may very well swing the election, a reality that Karl Rove’s super PAC, American Crossroads—which raised a staggering $51 million in 2011—is aware of.

Many potential solutions are being floated around among activist and political circles about how to tamp down on big money in elections. The Demos and U.S. PIRG study recommends crafting more comprehensive disclosure, transparency, and coordination rules, having the Securities and Exchange Commission require all publicly traded companies disclose political spending, and passing laws that would empower small donors with tax credits and public grants, among a list of other ideas.

The solution that's most talked about now, however, is a constitutional amendment that would declassify corporations as people for the purpose of election spending. But to enact an amendment will take, under the best of circumstances, a long time. Our current Congress, which can’t even approve a tax cut without weeks of gridlock, is not going to pass a controversial constitutional amendment.

Advocates for campaign-finance reform say that momentum for reform will only begin after Americans witness the flood of money affecting the 2012 election and tilting the results in a way that many don’t like.

“A lot depends on this election’s outcome,” says Nick Nyhart, executive director of Public Campaign Action Fund, a nonprofit campaign-finance watchdog. “If there’s huge money flooding, and members of Congress don’t feel like they can raise enough money to protect themselves, it may change the way they look at this issue.”

Adam Skaggs, senior counsel of the democracy program at the Brennan Center for Justice, agrees. “It’s possible that some of the excesses from this tsunami of super PAC spending may result in bridging some of the divides and creating broad support for some of these reforms. What looks like it might be possible in this Congress and what looks like it was possible in the last Congress might be very different after November, not only because the composition of some of the offices will change but because this election, we’re through the looking glass in 2012, and pretty well-established positions may change.”

Even Mann, who has “learned not to be optimistic on these things,” thinks that this upcoming election is “not going to be pretty, and you never know, might be able to pull together a strange coalition to move ahead” on reform to tamp down the effects of the Citizens United decision, even with something as ambitious as a constitutional amendment.