Unlimited Money And Secret Donors Threaten To Overwhelm Record-Breaking 2012 Election

The 2012 election is almost guaranteed to be historic  in terms of money raised and spent on behalf of the two major-party candidates. But a record amount of the presidential campaign cash meant to court voters and used by special interests to gain influence is secret or unlimited, and nearly all of it is delivered through a small cadre of super-rich corporate players able to shield their contributions — but not their motives.

Campaign finance experts issued predictions of presidential contest that would exceed as much as $3 billion in cost, with both President Obama and any Republican nominated to oppose him certain to eschew public financing for the first time in 40 years and enjoying the benefits of the Supreme Court’s “Citizens United” ruling opening the floodgates of anonymous and unlimited cash to such creations as “siper-PACs” and politically connected “social welfare” organizations.

So far, the 2012 election has played out beyond even these eye-popping predictions. USA Today reports that a total of more than $1 billion — a tally rising daily — has been raised by the Obama and Romney campaigns, the two major political parties, and the super-PACs aligned with the candidates with only a little less than four months until Election Day. In a truly stunning twist, more than $100 million of the billion in contributions so far have come through the super-PACs supporting Obama and Mitt Romney — a form of campaign spending that didn’t even exist during the last election.

America’s first presidential race funded solely by private money is on a fast track to crossing the $3 billion mark, with the bulk of the fundraising accrued so far coming in what is traditionally slower months for political action.  The campaign is well on its way to becoming the costliest in the nation’s history, with eventual consequences as-yet unexplored.

Less than four months until Election Day, the battle for the White House already has crossed the $1 billion mark — as the presidential candidates, political parties and the two super PACs closely aligned with President Obama and Republican rival Mitt Romney race to collect political cash. 

 The biggest spending is yet to come in a presidential race that could hit an eye-popping $3 billion, said Bob Biersack of the Center for Responsive Politics, which tracks campaign money. Much of it may never be fully disclosed as it flows through “social welfare” groups active in politics this year.

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Presidential candidates, led by Obama, broke fundraising records in 2008 — the first contest since 1928 in which neither the sitting president nor vice president was on the ballot. The 2012 White House race, however, marks other milestones. It is first since the rise of candidate-aligned super PACs that are raising unlimited sums. It also is the first since 1972 financed entirely by private money — as both party’s nominees reject taxpayer funds for the general election. By doing so, they bypass the strict spending caps imposed on politicians who take public money.

Never before has so much cash been in play during a presidential election. More troubling, that money has never been so secret,  shielded from public knowledge, and coming from such a small number of individuals as it has in 2012.

The case of super-PACs and outside “social welfare” groups — such as Karl Rove’s American Crossroads organization — taking advantage of “Citizens United” and enjoying unlimited contributions while in some cases giving donors total anonymity has been well documented. Secret political donations have never before been able to influence a presidential election in the way that is is changing the face of this year’s tilt.

But the campaigns and candidates themselves, with fundraising machines every bit as powerful and successful as the absurdly categorized “unaffiliated” groups , are also taking full advantage of a campaign finance wild west where rules are as scarce as the checks are plentiful.

Among the most prized assets for presidential candidates are “bundlers,”  wealthy individuals who promise to collect contributions from their well-connected friends and colleagues in addition to kicking in their own substantial financial assistance. Bundlers are often celebrities or corporate executives, and they typically bring in at least $250,000 or up to a million dollars for their candidate’s campaign.

Mitt Romney’s campaign is bucking the trend of past presidential nominees who utilized the “bundler” system by refusing to release the names of his supporters raising potentially over $1 million for the Republican’s bid.  Already enjoying access to unlimited cash raised through anonymous donors to supportive PACs and outside groups, the Romney campaign is now refusing to disclose individuals who funnel money directly to his campaign.

Ironically, the names of people contributing as little as a single dollar are publicly available while the identities of well-connected supporters funneling massive amounts of cash to the Romney campaign are kept secret.  And it is entirely legal under the current campaign finance system.

A top Mitt Romney adviser signaled Monday the campaign would continue to keep the names of its bundlers private, even as he accused President Obama of giving special favors to those who have raised campaign cash.

Unlike the Obama campaign, Romney has not revealed the names of his top political fundraisers, called “bundlers” because they bundle together contributions in small increments from family, friends and business associates. These individuals are so important they are often rewarded with ambassadorships

“The issue here is not so much the appointments and that kind of thing, it’s the contracts, the subsidies, the loan guarantees, the waivers and that’s what we are going to be focused on,” Ed Gillespie, a senior adviser to the Romney campaign, said when asked whether the campaign would reveal its top donors. “Governor Romney’s contributors are made public, they are disclosed and we’ll continue to do that.”

The disclosure of these bundlers is voluntary, but good-government groups such as the Center for Responsive Politics have called on Romney to reveal the names since those individuals tend to wield influence once their candidate is elected. The groups renewed calls Monday for Romney to release the list.

One reason that candidates may choose to keep the identities of bundlers under wraps is that they are often wealthy individuals connected to publicly unpalatable industries and organizations, as well as the fact that most will be given plum posts in the prospective administration of their favored candidate.

This is the case with the Romney campaign, where the names of as many as 1,200 bundlers are still entirely secret. But a USA Today study hoping to uncover their identities discovered more than 300 of those bundlers working on Wall Street or in the banking sector, an industry deeply unpopular with the public  – and voters — amidst a string of embarrassments and scandals dating to the 2008 crash.

As important as the ongoing secrecy of who is giving is how much they have — and will — give to Obama and Romney. In the case of the Romney campaign, just 12 of his bundlers who are registered lobbyists and thus required by law to be disclosed by the campaign raised a total of at least $2.1 million in the last 3 months — and that’s just 12 of more than 1,200.

And that secret money is not likely to stop flowing any time soon. Reuters finds that less than 1 percent of Romney’s big-money contributors have “tapped out”, or reached their legally restricted limit on campaign contributions to a single candidate.

The dangers of allowing a small group of financial and business elites to “bundle” together massive amounts of contributions to presidential candidates is a decidedly bipartisan issue. While his GOP challenger has raced ahead in the number of bundlers and the amount of cash raised through them — as well as keeping the vast majority of them and their contributions secret — President Obama has also built a well-oiled machine to court support from the rich and powerful.

The president’s reelection campaign has raised over $100 million so far from a group of just 532 “bundlers.” Hollywood mogul Jeff Katzenberg has raised more than $2.3 million alone, while the majority of Obama’s “bundler” haul has come from corporations and financial interests the federal government is charged with regulating.

As with Romney’s donors, the incentive for corporate and financial executives to become presidential “bundlers” is clear and unmistakable. Several of President Obama’s bundlers from his 2008 campaign that raised nearly $3 million were given key spots on his “jobs council,” a group stacked with corporate interests and executives charged with forming the president’s economic policy.

The group of private-sector business leaders advising President Obama on how to create jobs and grow the economy is full of deep-pocket Democratic donors and high-profile financiers of Obama’s re-election campaign, a review of Federal Election Commission data shows.

At least 10 members of the Obama-appointed Council on Jobs and Competitiveness gave the legal maximum contribution — $4,600 — to help get Obama elected in 2008, and they continue to write checks for the president in 2012. Several also serve as Obama campaign bundlers, top fundraisers who collect millions of dollars from their networks of well-to-do colleagues and friends to aid his re-election bid.

The bundlers — Mark Gallogy, co-founder of investment firm Centerbridge Partners, Penny Prtizker, president and CEO of Pritzker Realty Group, and Robert Wolf, chairman of UBS Americas — have raised as much as $2.7 million for Obama in 2008 and 2012 combined, according to estimates provided by the Obama campaign.

Pritzker served as the Obama presidential campaign’s national finance chairwoman in 2008 and co-chair of the Obama inaugural committee in 2009. Wolf is an occasional Obama golf partner and most recently played golf with the president during his vacation on Martha’s Vineyard.

Rampant influence-peddling has carried over into the 2012 contest. While legitimate questions can be raised about just the high-profile contributors to the two major campaigns we know about, some particularly stand out.

For instance, the huge British bank Barclays, now embroiled in a devastating rate-rigging scandal and facing regulatory fines and perhaps criminal charges, has lavished both the Romney and Obama campaigns with financial support.  While direct contributions from Barclays employees amount to only a little under $300,000 for both campaigns, senior Barclays executives have been more generous.

One high-level Barclays executive is a top Romney bundler, having raised over $1 million, and is leading member of the Republican nominee’s fiscal policy advisory panel. And another Barclays director has hosted glitzy fundraisers for the Obama campaign, one featuring Michelle Obama.

There has been little motive by either party to use legislative means to stop or slow down the escalating influence of money — and specifically unlimited and undisclosed contributions — in American politics. Though with Republicans and consetrvative groups taking the lead in using the loopholes created by Citizens United, Democrats in Congress have sprung to action in a mainly toothless and ceremonial attempt to snubt their noses at GOP contributors.

The “Disclose Act,” meant to force the identities of some donors to super-PACs and other outside groups spending money to influence election to be made public, failed in the Senate this week after failing to break a GOP filibuster.

Senate Republicans again Tuesday blocked Democratic legislation that would require greater transparency into who is behind much of the secretive, often negative campaign advertising filling the airwaves this election season.

Supporters of the DISCLOSE Act mustered 53 votes in an effort to advance the bill, but fell short of the 60 needed to break a GOP filibuster. Democrats unanimously supported the bill, while Republicans voted unanimously against it. The legislation, which needs 60 votes to succeed, failed on a 51-44 vote Monday.

The legislation would require certain tax-exempt groups involved in political advertising — which currently are not required to disclose the names of their donors — to release the names of those who give donations of $10,000 or more. A similar vote Monday ended with the same result.

“During this election, outside spending by GOP shell groups is expected to top $1 billion,” said Senate Majority Leader Harry Reid, D-Nevada, in a floor speech. “The names of these front groups contain words like ‘freedom’ and ‘prosperity.’ But make no mistake: there is nothing free about an election purchased by a handful of billionaires for their own self-interest.”

Democrats say the requirement is a much-needed response to the U.S. Supreme Court’s Citizen United decision, which opened the doors to large amounts of campaign spending by corporations, labor unions and other groups.