Conservative donors eye independent groups with new skepticism
By Matea Gold,
Charlie Spies knows how to raise money. The Republican lawyer helped rake in $153 million for Restore Our Future, the pro-Mitt Romney super PAC.
But he’s had a harder slog with one of his latest projects, Republicans for Immigration Reform, a super PAC that aims to be a dominant force in the fight over revamping the country’s immigration laws. So far, the organization has made just a tiny ad buy in South Carolina and financed a poll with two other advocacy groups.
“It has been a challenge to get donors on the Republican side to reengage,” Spies said.
Seven months after the 2012 election, a lingering hangover among conservative donors has stalled efforts by right-leaning independent groups to fill their coffers. Wealthy contributors who dashed off six- and seven-figure checks last year are eyeing super PACs and other politically active groups more skeptically, frustrated that the hundreds of millions of dollars spent to elect Romney went for naught.
“There’s donor fatigue,” said Fred Malek, a veteran GOP operative wired into high-net-worth circles. “Everyone was in a frenzy of giving up until the November elections, and then everyone was sort of worn out on the whole process. It’s very hard to raise money after an election, especially after you lose.”
Several Republican fundraisers said they remain optimistic that the money spigot will reopen as the 2014 congressional elections approach. But this time around, donors are seeking to be more judicious about where they put their money, asking groups for detailed strategy and spending plans.
“At the moment, I’m kind of in a waiting and watching mode,” said Howard Leach, an ambassador to France under President George W. Bush. In 2012, Leach gave $100,000 each to Restore Our Future and American Crossroads, the conservative super PAC co-founded by former Bush political strategist Karl Rove.
Post-election donor apathy is not limited to the political right. Organizing for Action, a nonprofit group launched by former advisers to President Obama to back his agenda, has halved a $50 million fundraising goal for its first year after slower-than-expected fundraising, according to people familiar with the group’s plans. The decision came after the group reversed course and said it would not accept corporate funds.
But the pressure to bring in big checks is greater for pro-Republican groups, which have not been able to match the extensive small-donor network that was built by Obama’s campaign and that OFA is now drawing on.
There are signs that donor reticence stems in part from dissatisfaction with the uneven track record of super PACs, which report their funding sources, and opaque nonprofit groups, which do not disclose their donors. Both types can raise unlimited funds.
One well-connected Republican donor and fundraiser, who has held off writing big checks to outside groups since the election, said he is among a group of top contributors now questioning the value of financing such organizations, which operate independently of candidates and party leaders.
“I do find it a little worrisome, frankly, that there’s so much more money and so few people behind it,” said the contributor, who requested anonymity to speak candidly about his misgivings. “I am concerned that all that money didn’t seem to bring results.”
Frank VanderSloot, chief executive of an Idaho nutritional-supplement company who gave abundantly to Romney and groups backing him, said he has concluded that it is not effective to finance tax-exempt advocacy groups that can only spend a limited amount on politics.
“If you can’t say what candidate you’re for, it’s hard,” said VanderSloot, who said he gave “several million” in all to various groups, including $1.1 million to Restore Our Future.
From now on, he said, he is sticking with super PACs, which have more latitude to directly engage in elections: “That’s where my money is going.”
Major conservative groups such as Crossroads have stayed out of Tuesday’s special election for a U.S. Senate seat in Massachusetts, leaving Republican Gabriel Gomez outmatched against the resources of Democrat Edward J. Markey and his allies.
Conservative donors said they have not softened in their opposition to Obama or stopped trying to stymie his presidency. If anything, recent revelations about the National Security Agency’s data gathering and the Internal Revenue Service’s scrutiny of conservative groups have intensified those sentiments, they said.
Having failed to deny Obama a second term, some contributors said they plan to work on flipping the Senate to Republican control in 2014 in order to block the president legislatively. Obama is “taking this country down the tubes,” said Andrew Sabin, owner of a New York-based precious-metal refining business, who gave $100,000 to American Crossroads in the last election cycle. “I’m extremely motivated.”
One fundraiser for a top conservative group, who requested anonymity to discuss private conversations with donors, said contributors understand that the midterms will be important. “I think they just have to understand how the money is being spent,” the fundraiser said.
New conservative outfits are finding that they have to work much harder to win over donors, some of whom now hire lawyers to conduct due-diligence inquiries about the organizations soliciting their support.
“We’ve learned to ask people: ‘What is your message? Where are you going to spend the money, and how?’” said VanderSloot, who said that he also requests information about how much of a group’s budget goes to paying people running the organization. “In some cases, you may want to get that answer in writing.”
The intense scrutiny “is winnowing the field of consultants who are able to raise significant funds,” said Robert Kelner, a Washington campaign finance lawyer who heads the political law practice at Covington & Burling.
“You’re seeing more impressive business plans, on better paper with fancier graphics,” Kelner added, referring to the efforts of political groups. “They look more like the kind of proposals someone would submit to a private equity fund.”
In their pitches, many organizations are pledging to diversify their approaches and not rely as heavily on expensive television advertising as they did in the last election, when the airwaves were crowded with discordant messages. The new emphasis is on digital campaigns and get-out-the-vote organizing — strategies that some groups expect to test this year in Virginia’s governor’s race and New Jersey’s U.S. Senate contest.
The desire of donors to see specific political plans has slowed the efforts of Republican groups seeking to promote their preferred versions of immigration reform, strategists said. The Senate is on track to approve a bipartisan compromise by the end of next week, but prospects in the House are less certain.
It remains to be seen whether any groups on the right will provide significant air cover for lawmakers who support the legislation.
So far, Crossroads GPS, the nonprofit sister of American Crossroads, has spent less than $100,000 to run a newspaper and online ad calling for comprehensive immigration reform. A spokesman declined to comment on whether the organization’s modest efforts so far were due to fundraising challenges.
One of the biggest players was expected to be Republicans for Immigration Reform, which Spies launched in the fall with Carlos Gutierrez, a former Kellogg chief executive who served as commerce secretary under Bush.
“This is not small ball,” Gutierrez told The Washington Post in November. “We’re serious, and we are going to push the debates on immigration reform to a place where I believe the Republican Party should be in the 21st century.”
Spies said that the group still hopes to launch a paid media campaign this summer but that no plans have been finalized.