For GOP hopefuls, a race before the race
By T.W. Farnam and Dan Eggen,
On a single day in October, Eldon and Regina Roth each wrote separate checks to political funds set up by Republican Mitt Romney in five states around the country. That allowed the South Dakota beef barons to donate $190,000 - well beyond limits for contributions to federal political action committees.
The state-based funds are among several creative - and perfectly legal - strategies embraced by potential GOP presidential contenders as they lay the groundwork for 2012. The efforts amount to an aggressive and sophisticated preliminary campaign, in which candidates exploit incentives and gaps in the nation's patchwork election system.
In essence, the strategies allow hopefuls to begin running for president before they actually run. These pre-presidential efforts are particularly important in the current election cycle, which is unfolding far more slowly than it did four years ago, when more than a dozen candidates had already launched their campaigns by this point.
By setting up state political funds, as Romney and several others have done, presidential hopefuls can go to their most loyal supporters with deep pockets - funders like the Roths - and solicit larger donations than they could for the federal PACs required of official candidates.
The state-based money can be used to fund administrative costs for political operations and to support local GOP politicians in primary states. And then, when they form an official campaign, candidates can hit up the same donors again.
Former Minnesota governor Tim Pawlenty, for example, has created PACs in the early primary states of Iowa and New Hampshire and is using money from his federal non-presidential account to help pay for the marketing of his new book, "Courage to Stand." The effort includes a lavish, well-produced campaign-style video that only briefly refers to the memoir.
Mississippi Gov. Haley Barbour, a GOP rainmaker who raised millions for the 2010 elections, has established a PAC in Georgia, which has less restrictive election rules than his home state. Rep. Michele Bachmann (Minn.), former Alaska governor Sarah Palin and others have also built support by distributing money from their coffers to friendly lawmakers in battleground states.
"Running for president before you announce has turned into a profession in and of itself," said Ron Bonjean, a GOP consultant and former House leadership aide.
And for the donors, Bonjean said, it is "a two-fer: They are able to give money to a potential presidential candidate they believe in, and they also are supporting politicians at the state and local level."
Romney, who deployed a similar network of state political funds for the 2008 campaign, is the clear leader in PAC fundraising. Last year, he brought in more than $6 million, compared with about $3.5 million raised by Palin, more than $2.4 million for Pawlenty and about $1.5 million for Barbour, according to the latest public reports.
Former House speaker Newt Gingrich also runs an independent organization that brought in $10.6 million through the end of September, according to the latest information available.
More than $1 million of Romney's donations came from just a dozen supporters, public documents show. The gifts include more than $200,000 from two members of the Marriott family in Bethesda and $91,600 from New York Jets owner Robert Wood Johnson IV and his mother, Betty.
"The reason we have state PACs is because it gives us more flexibility in raising money," said Romney spokesman Eric Fehrnstrom. "The more money we raise, the more helpful we can be to Republican candidates and the better able we are to carry out the PACs' mission of promoting conservative policies that strengthen America."
Many Republicans note that President Obama has also been running a shadow campaign of sorts inside the Democratic National Committee, which houses his former campaign operation, now called Organizing for America. Jim Messina, who left the White House on Friday to become Obama's 2012 reelection campaign manager, will host a series of DNC fundraisers next week aimed at kicking off the effort - even though no official campaign committee has been formed.
Election watchdogs have long complained about loopholes in the federal campaign finance system that allow undeclared candidates to run de facto presidential campaigns with less oversight. Federal Election Commission rules require formation of a federal political committee even when candidates are just "testing the waters"; hopefuls maneuver around that by carefully avoiding the mention of a White House bid.
"What we have are fairly sophisticated people with very good lawyers insisting that they're repeatedly flying to Iowa just to talk about issues," said Paul S. Ryan, associate legal counsel at the Campaign Legal Center, which advocates stricter limits on political spending. "It's really a bit of a charade at this point."
Eldon and Regina Roth, the Romney donors, are the owners of Beef Products Inc., one of the largest employers in Sioux City, Iowa, just over the state line from the company's South Dakota headquarters. BPI, which sells rendered beef processed with ammonia, recently lost an exemption to routine government testing that had been granted by the Bush administration.
The Roths each wrote checks to all five of Romney's state committees on Oct. 15, including $35,000 each to his Iowa and Alabama PACs. The maximum federal contribution for an individual last year was $5,000 to a federal PAC and $2,400 to a presidential candidate.
The Roths and other major Romney donors did not respond to requests for comment.
One donor to Barbour's PAC in Georgia, Jamal Daniel, a Houston energy investor and financier, gave $100,000 last month. He did not return a call seeking comment.
Pawlenty has accepted $60,000 from Texas home builder Bob Perry and his wife, and $37,000 from David Frauenshuh, a commercial real estate developer based in Minnesota. Perry, a key financier behind the 2004 "Swift Boat" attacks on Sen. John F. Kerry (D-Mass.), spent millions backing conservative candidates in the 2010 congressional elections. The Pawlenty donors did not respond to messages.
Romney and Pawlenty have been the most aggressive in distributing money to state candidates. Romney has given $108,000 to candidates from his Iowa PAC alone while Pawlenty has given $70,500 to candidates in the state.
A key recipient of money from Romney is Nikki Haley, the new Republican governor in the early- primary state of South Carolina, who received $60,000 from Romney's constellation of PACs last year.
Sources say Pawlenty is in the process of winding down his federal Freedom First PAC, which would have to be frozen or shuttered if he launched a presidential run. He has traveled to both Iowa and New Hampshire this month for book-related events, which officials said were paid for primarily by the publisher with marketing support from the PAC.
"When he announced that he wouldn't seek reelection, the governor said he wanted to do what he could to help other Republicans around the country, and the Freedom First PAC allowed him to do that," said Pawlenty spokesman Alex Conant. "It's a way to add his voice to the national debate."