Already poised to blow out records for the most expensive campaign in American history, the financial stakes attached to the 2012 presidential election were raised to unprecedented levels by a monumental flip-flop from Barack Obama.
Having long promised to raise as much as one billion dollars in direct donations to the campaign to win a second term in the White House, President Obama had consistently offered public denunciations for the wave of unlimited and undisclosed contributions made possible by the Supreme Court’s 2010 Citizens United ruling and made popular by conservative groups and Republican candidates in that year’s midterm elections.
With hundreds of millions of dollars successfully poured into the 2010 races and the 2012 campaign coming into focus, it was clear that the plethora of “independent” non-profit groups and so-called “super” political action committees that were popping up on both sides to join battle in the coming election would be permanent fixtures on the American political landscape.
Open criticism of “super-PACs” and the reliance of GOP candidate and conservatives group on the floodgate of undisclosed campaign money made possible by Citizens United had been a handy attack line for President Obama and the White House. Positing outside organizations and the unlimited funds at their disposal as a “threat to democracy,” the Obama campaign promised to eschew any overt support from the many Democratic-aligned super-PACs that were rapidly forming.
President Barack Obama is stepping up criticism of tax-exempt Republican-leaning groups using undisclosed donations to fund “attack ads” less than a month before congressional elections, a complaint his opponents call baseless.
“It could be the oil industry” funding the ads, Obama told a Democraticrally yesterday in Philadelphia. “It could be the insurance industry, it could even be foreign-owned corporations. You don’t know because they don’t have to disclose.”
While Obama didn’t name any groups at the rally, he said political ads paid for by undisclosed donors are “a threat to our democracy.”
From “threat to democracy” to unquestioned political ally, the Obama campaign has decided to reverse its position on super-PACs in a stunning turn of events. Now wholeheartedly embracing the Supreme Court’s destruction of campaign finance regulations, the president’s reelection campaign is urging the hundreds of thousands of individuals and deep-pocketed “bundlers” that have contributed to Obama’s official campaign to also funnel cash to liberal super-PACs and other outside groups.
The White House refuses to accept accountability for the decision, claiming that they cannot “play by a different set of rules” from conservative financiers and Republican candidates seeking to defeat Obama in November.
In a reversal, President Barack Obama is embracing the big-money fundraising groups he assailed as a “threat to democracy” on the grounds they let money corrode elections. His shift is a pragmatic move to win re-election, and a concession that his team had no choice but to catch up and go along with today’s supercharged rules.
Swamped by outside Republican groups in fundraising so far, Obama belatedly decided to give his blessing to so-called super PACs, which can accept unlimited donations from corporations, labor unions and wealthy individuals. Both Obama’s campaign and the White House maintain that the president does not support today’s rules but realized belatedly he must play by them to give himself a competitive chance at a second term.
“He’s not saying that the system is healthy or good,” said Obama spokesman Jay Carney, who was pressed repeatedly about whether Obama’s move was hypocrisy. “He is making the decision, his campaign is making the decision, that the rules are what they are. And they cannot play by a different set of rules than Republicans are playing.”
That’s not consistent with what Obama has said about the groups, though. And now, by putting strategy above all else, Obama opened himself to criticism that he had compromised on principle and succumbed to the rules of the same Washington game he pledged to change.
President Obama’s campaign manager directed the president’s supporters to the most active and organized of the liberal-leaning super-PACs, Priorities USA, which is run by a former White House staffer. Campaign manager Jim Messina told supporters that the president’s campaign refuses to “unilaterally disarm” and instead will jump into the super-PAC cash pool “consistent with the law.”
“With so much at stake, we can’t allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm,” Obama campaign manager Jim Messina wrote in an e-mail to supporters announcing the move.”Therefore, the campaign has decided to do what we can, consistent with the law, to support Priorities USA in its effort to counter the weight of the GOP Super PACs. We will do so only in the knowledge and with the expectation that all of its donations will be fully disclosed as required by law to the Federal Election Commission.”
Questions of hypocrisy aside, the point that independent groups aligned with conservative candidates and causes are dominating the fundraising operation of Republicans this election cycle and are outraising their Democratic counterparts is a valid one.
After pioneering the use of anonymous and unlimited contributions in the 2010 campaign, the GOP is relying almost exclusively on their muscular fundraising ability in their own intramural presidential primary fight as well as the broader effort to defeat Obama.
Judging by candidates and their official campaigns alone, Republicans like Mitt Romney aren’t raising very much money at all. Obama’s promised billion-dollar campaign is already dwarfing the meager hauls of GOP contenders. But GOP-allied super-PACs are outraising their liberal rivals by four-to-one.
A single super-PAC aligned with Mitt Romney’s presidential campaign and operated by a slew of former Romney staffers, “Restore Our Future,” raised over $30 million in 2011 alone and spent nearly $20 million in January to attack Romney’s opponents in the Republican primary.
The super PAC supporting Mitt Romney’s candidacy, “Restore Our Future,” raised $30 million in 2011, placing it far ahead of other independent groups created to back other presidential hopefuls. The donations, many of which came from the financial sector, included $1 million each from seven individuals or companies in the last six months of last year.
Restore Our Future’s end-of-year filing with the Federal Election Commission on Tuesday – after Romney had made his victory speech in the Florida primary – showed that in addition to the $12 million the super PAC raised between last January and June (and previously reported), it raised another $18 million between July and December.
The super PAC spent only $6.5 million in 2011, leaving $23.5 million cash on hand entering 2012.
Overall, Restore Our Future has spent a total of $17 million through January, according to earlier disclosures made to the FEC, so the pro-Romney super PAC should have $13 million cash on hand, not including additional fundraising in January.
And much of the healthy cash totals accrued by the “Restore Our Future” super-PAC are coming from a relative handful of super-rich backers. In the last half of 2011 alone, there were seven individual contributions of $1 million each that came from corporate CEO’s and billionaire hedge-fund managers.
The long-awaited donor list for the pro-Romney super PAC revealed close to 200 individuals and companies donating large amounts to advance the former Massachusetts governor’s cause. In the last six months of 2011, there were seven $1 million donors and three at or above $500,000. A dozen donors gave between $200,000 and $250,000, while another 27 gave $100,000.
The $1 million donors to Restore Our Future were financial consultant Robert Mercer, of New York; investment manager Julian Robertson, of New York; hedge fund manager Paul Singer, of New York; the Melaleuca companies, of Idaho; and company Rooney Holdings, of Oklahoma. Miguel Fernandez, Chairman of MBF Healthcare Partners, of Florida, gave $500,000, and so did MBF Family Investments, listed at the same Miami office suite. The company Oxbow Carbon, of Florida, gave $750,000, and Oxbow President William Koch gave $250,000, bringing their total to $1 million.
Outside of super-PACs supporting individual candidates, the massive independent operations like those run by Karl Rove and the conservative financiers Charles and David Koch are prepared to dump eye-popping amounts of money into the 2012 election.
The Koch brothers and a few hundred like-minded wealthy conservatives have pledged at least $100 million to fund independent conservative groups opposed to Obama’s reelection. Charles and David Koch alone have said they will put up $60 million of their own personal fortune.
Unable to stay out of the high-stakes money game that 2012 is rapidly developing into, President Obama’s flip-flop means big bucks for “Priorities USA Action.” Co-founded by a former Obama campaign and White House spokesman, Priorities USA is the most powerful of the small number of Democratic super-PACs that have sprung up in response to GOP groups.
Its financial impact in the 2012 campaign is so far underwhelming — its only expenditure is just under $400,000 spent on negative ads against Mitt Romney — but the tool of unlimited contributions and Obama’s decision to publicly support the group means its roster of wealthy liberal supporters has considerable room to grow.
Emboldened by the blessing of the President, Priorities USA and the four smaller Democratic super-PACs are actively seeking a major expansion of their collective campaign warchest. The groups are courting wealthy Obama supporters in a bid to grab contributions of as much as $10 million to fund their expanding operations, which may soon be joined into a single entity that could be called a “mega-super-PAC.” (as reported in Friday’s “Headlines” on this site.).
Hollywood mogul Jeffrey Katzenburg and various media tycoons and investment executives have already delivered millions of dollars in contributions even before Obama’s change of heart.
Five Democratic “super” political action committees are reaching out to party mega-donors seeking $1 million to $10 million contributions, now that President Barack Obama has blessed the outside spending group working to get him re-elected.
Discussions among the five super PACs are under way about setting up a joint fundraising committee, said Bill Burton, a former deputy White House press secretary and co-founder of Priorities USA Action, which was launched last spring to help Obama win a second term.
“We’re in serious talks,” Burton told iWatch News of the Center for Public Integrity, but he added that a final decision hasn’t been made about establishing a joint fundraising mechanism. Either way, “there are a lot of people in the progressive donor community who have not yet gotten involved who are likely to be involved.”
Other top Democratic fundraisers say that a joint fundraising entity is likely and stress that the White House’s abrupt shift on super PACs — which came Monday in a conference call to leading donors and fundraisers with campaign manager Jim Messina — could help prod large donors to write seven-figure checks.