2012 Will Be A Record $6 Billion Election

The 2012 election had long been predicted to set new records for money raised and spent during a single political campaign, but updated figures show that the actual money race has blown past expectations and is likely to be the most expensive in American history by nearly $1 billion. 

The dismantling of national campaign finance regulations by the Supreme Court’s “Citizens United” ruling prior to the 2010 election has literally transformed how campaigns are operated and funded. Without a return to restraints on contributions and rules on identifying donors, each election will be more expensive than the last and make individuals that can donate the most money virtual kingmakers on the political stage.

It’s happening at a mind-boggling pace in 2012, where early estimates for how much the first post-Citizens United presidential race would cost have proven to be considerably off the mark.

New tallies show that this year’s election is on pace to top the $6 billion mark, nearly a billion dollars more than than the previous record. More astonishing is that campaigns are only increasing their spending rates as Election Day draws closer; candidates and outside groups are now spending around $70 million per week on advertising alone.

Driving the sharp increase is the proliferation of “independent” groups that can pool millions from just a few super-rich donors into big bucks spent on political advertising.  Without any financial limits or any meaningful regulatory oversight, these outside organizations are generating “historic spending levels” that represent a new normal for American politics.

The 2012 election will not only be the most expensive election in U.S. history, the cost will tower over the next most expensive election by more than $700 million.

Earlier this year, the Center for Responsive Politics estimated that the 2012 election would cost $5.8 billion — an estimate that already made it the most expensive in history — but with less than a week to go before the election, CRP is revising the estimate upwards. According to CRP’s new analysis of Federal Election Commission data, this election will likely cost $6 billion.

The most significant difference compared with earlier cycles is the unprecedented money being raised and spent by outside – and ostensibly independent – organizations, which we are predicting will spend more than $970 million.

“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 Sheila Krumholz, executive director of the Center for Responsive Politics. 

It’s likely that we will never know the complete picture of how much money was spent in this election and where it came from  thanks to the huge chunk of political spending that comes from “non-profit” groups ostensibly required to stay out of direct political advocacy. Thanks to various loopholes in federal tax and election laws, these organizations have managed to spend hundreds of millions of dollars backing specific candidates and causes without disclosing exactly how much or who bankrolled their efforts.

This “dark money” was perhaps the greatest fear among opponents of the Supreme Court’s decision, which relied upon the expectation of voluntary transparency. As the Center for Responsive Politics notes, any manner of openness or disclosure about donors and spending from outside groups has been “sorely lacking.”

What remains unknown — and may never fully be accounted for — is how much money secretive “shadow money” organizations spent, with some investing massive sums on ads, but also on unreported and purportedly “non-political” activities, as the election neared. It may take years to determine how much they spent. Furthermore, it likely will never be known who provided the vast majority of this money, which includes at least $203 million in the last two months.

“One thing we can say for certain is that the transparency the Supreme Court relied upon to justify this new framework has been sorely lacking,” said Krumholz. 

No requirements to disclose donors, spending, or how they operate mean much of the money raised and spent by dark money non-profits run by Karl Rove and the Kochs and others can only be roughly estimated.  Even so, experts have uncovered a whopping $840 million in campaign spending by outside groups in 2012, of which more than half has been directed at the presidential race and support for Republican nominee Mitt Romney.

The revolution in campaign fundraising since the last presidential contest is so complete as to make the “old way” of campaign spending seem absurd.

In 2008, “independent” organizations wishing to spend mopey on behalf of a candidate were held to a $5,000 limit per donor. Now, after Citizens United and in the absence of any meaningful regulations, a single wealthy businessman like casino magnate Sheldon Adelson can pump $54 million — likely more — into a handful of super-PACs.

The impact of supr-PACs and their more secretive “social welfare non-profit” cousins is undeniable. Their unlimited resources on top of the huge amounts pulled in by the established parties and campaigns makes for a significant advantage to the candidate that can corral the wealthiest supporters. In a single week in October, super-PACs and outside groups spent $55 million on advertising in support for Romney’s campaign in a single week.

Before the Citizens United decision, groups that wanted to advocate expressly for or against a candidate were limited to receiving no more than $5,000 per donor per calendar year. Super PACs now are allowed to raise unlimited amounts from corporations, unions and individuals.

In the current election, super PACs generally have been backed by super donors. Billionaire casino magnate Sheldon Adelson and his family, for example, had given $54 million to Republican super PACs as of mid-October, far more than any other donors in this election cycle.

Nonprofit “social welfare” groups and trade associations can raise just as much money, but they aren’t required to report their donors. The lack of transparency sparked legislation to require disclosure, but it was defeated.

Nonprofits were responsible for more than $245 million, or about 30 percent, of the $840 million in total outside spending. That’s about $100 million more than they spent in 2010.

 Of the total spending amount, an estimated $577 million, or roughly 69 percent, was spent by conservative groups, compared with $237 million spent by liberal groups, or about 28 percent, with the remainder expended by other organizations.

During the week of Sept. 30, outside groups benefiting Romney spent about $16.5 million, mostly on ads attacking Obama. Three weeks later, the seven-day total jumped to more than $55 million, according to FEC filings. 

Are the traditional major party candidates suffering a financial drought with so much cash flowing to outside groups and organizations? Hardly.  Instead of shifting contributions from one medum to another, wealthy contributors are lavishing their largess on both the formal campaigns of their favored candidates as well as the super-PACs and non-profits that are backing them.

So while hundreds of millions of dollars are being spent at a record pace by outside organizations, the Obama and Romney campaigns are likewise setting records for fundraising and money spent in 2012.

Together, President Obama and GOP challenger Romney are going to become the first presidential campaigns in history to each raise more than $1 billion. Fueled by scores of rich bundlers and donations from special interests, Obama has already crossed the billion-dollar make while Romney and the GOP have only a few million dollars to go.

President Obama and Mitt Romney are both on pace to raise more than $1 billion with their parties by Election Day, according to financial disclosures filed by the campaigns on Thursday. 

From the beginning of 2011 through Oct. 17, Mr. Obama and the Democrats raised about $1.06 billion, and Mr. Romney and the Republicans collected $954 million, including some money for the party’s Congressional efforts, setting up 2012 to be the most expensive presidential campaign in history. 

The ease with which the president blew past $1 billion raised for his campaign is especially noteworthy given the pains taken by the Obama campaign to define his reelection bid as “grassroots” and fighting big money from Republicans like Mitt Romney. The president’s campaign manager even scoffed at speculation earlier in the year that Obama would run a billion-dollar campaign by calling such talk “bullshit.”  

The record money being spent on this election has translated into record numbers of political advertisements, the main vehicle for distributing the billions taken in by the campaigns and their unregulated support groups.

Well over 1 million political television ads have aired in 2012, a staggering sum that would take nearly a full year to watch if consumed one after the other.

1,014,484. That’s how many times television ads from President Barack Obama, Republican nominee Mitt Romney and other groups involved in the Nov. 6 election have aired during the general election campaign, according to Kantar Media’s CMAG.

The totals include spots that ran on national network, national cable and local broadcast stations between April 10, when Romney effectively became the Republican nominee, and Oct. 22, the most recent date for which CMAG data are available. The CMAG data don’t include ads that ran on local cable.

The ad count topped the million mark in the past week. Obama’s campaign supplied 466,127 ads, compared to 173,727 for Romney and 72,849 for Crossroads GPS, a non-profit group founded with the help of Republican strategist Karl Rove. A related organization, the super-PAC American Crossroads, provided 57,302 spots. Restore Our Future, a pro-Romney super-PAC, provided 49,649 ads, and the pro-Obama super-PAC Priorities USA Action supplied 46,487 spots.

At about 30 seconds per commercial, it would take more than 352 days to watch all one million.

That number is likely to grow as the Obama and Romney campaigns surpass one billion dollars spent on political advertising alone, including $30 million spent by the two campaigns for a final week of ads in Ohio.