Influence Industry: Small group makes big dent on super PAC individual donations, study says

Bill Turque
Reporter August 2, 2012

It’s no secret that some very rich people support the super PACs and other groups that have inundated the 2012 campaign with unlimited sums of cash. But a study to be released Thursday details the extent to which this kind of donating is the sport of the One Percent.

Just 47 people account for more than half (57.1 percent) of the $230 million raised by super PACs from individual donors, according to the study by U.S. Public Interest Research Group (U.S. PIRG) and Demos, two liberal research and advocacy organizations. Just over 1,000 donors giving $10,000 or more were responsible for 94 percent of the money raised.

Bill Turque, who covers Montgomery County government and politics, has spent more than thirty years as a reporter and editor for The Washington Post, Newsweek, the Dallas Times Herald and The Kansas City Star. View Archive

“One might think of today’s outside spending groups as megaphones for moguls and millionaires,” write co-authors Blair Bowie and Adam Lioz. “The more money they pump in, the louder they’re able to amplify their voices — until a relatively few wealthy individuals and interests are dominating our public square, drowning out the rest of us.”

Republican-aligned super PACs such as Restore Our Future and American Crossroads, in concert with other conservative groups, have spent more than $144 million on television ads supporting Mitt Romney in swing states. Democratic super PACs such as Priorities USA, Majority PAC and House Majority PAC have yet to raise or spend anywhere near that amount but have been actively collecting big checks.

At the top of the individual donor pyramid is billionaire casino magnate Sheldon Adelson and his wife, Miriam. They have given (along with their children) more than $36  million, much of it to Winning Our Future, a super PAC aligned with former House speaker and Republican primary candidate Newt Gingrich. More recently, the couple contributed $10 million to Restore Our Future, the super PAC founded by a group of former aides to presumptive GOP nominee Mitt Romney.

Bowie and Lioz point out that big-check writing is not restricted to wealthy conservatives. Hollywood mogul Jeffrey Katzenberg, for example, recently contributed $2 million to Priorities USA Action, a super PAC supporting President Obama. But they said massive contributions such as those from the Adelsons — which represent a sliver of their estimated $24.9 billion net worth — distort the democratic process. They calculate that it would take 321,000 middle-income families, donating an equivalent share of their wealth (0.15 percent), to match the Adelsons’ giving.

“Democracy must write the rules for capitalism, not the other way around,” the authors said. “The only way to ensure this happens is to have some mechanism for preventing wealthy individuals and institutions from translating their wealth into political power.” The report recommends a constitutional amendment limiting outside spending by corporations and the wealthy. The U.S. Supreme Court held in 2010 in Citizens United v. Federal Election Commission that companies and unions have a First Amendment right to make unlimited campaign contributions.

Former FEC chairman Bradley A. Smith, an outspoken advocate of minimal restrictions on campaign spending, said megaphones for the super-rich are a good thing.

“One might also say that the super-rich are providing a megaphone to ordinary voters,” Smith, chairman and co-founder of the Center for Competitive Politics, said in an e-mail Wednesday. “Think of how many Gingrich voters had their opinions heard because of Sheldon Adelson’s contributions to a pro-Gingrich Super PAC.”

Smith said that more speech is inherently good, regardless of the spending involved.

“In the end, the electorate makes the choice with their votes. A well-funded bad message won’t win, which is why John Connally, Phil Gramm, Ross Perot, and Steve Forbes are not ranked among the great presidents, and Ned Lamont isn’t in the Senate,” he said.

The report also reiterates concerns about so-called dark money, contributions that cannot be traced to a source through public records. The authors estimate that $12.7 million of the $167.5 million reported by outside spending groups to the FEC (7.6 percent) is untraceable.

But because of gaps in reporting requirements, the authors say, spending that is reported to the FEC is only a part of the picture. When all spending on television ads is taken into account, they said, just over half comes from groups that are entitled to shield their donors.

“This undermines political equality,” Bowie and Liaz write, “and denies voters the opportunity to properly evaluate the messages targeted at them, and the ability to see the full scope of distortion.”

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