Economic Downturn Sidelines Donors to '527' Groups

A spokesman for Adelson, Ron Reese, said "Mr. Adelson does not comment on his political activity."

Another Freedom's Watch patron, New York financier Paul Singer, also stepped back his involvement. His firm, Elliott Associates, had minor exposure to the collapse of Lehman Brothers, leading to speculation among some Republican fundraisers that the economic crisis was to blame. Singer helped raise more than $1 million for Republicans in the current election cycle and was viewed as an important potential resource among those trying to find support for independent groups.

A spokesman for Singer declined to comment on his political activity this year but noted that his hedge fund as of Sept. 30 was up 6 percent for the year.

One Freedom's Watch adviser familiar with appeals to Singer said efforts to enlist his eleventh-hour support have gone unanswered. "Understandably," said the adviser, who spoke on the condition of anonymity because discussions with donors are confidential. "The guy's got a business to worry about."

Senior staff members at Freedom's Watch said they consider their efforts in several key House and Senate races to be a significant first step. "We have put out $30 million in expenditures, and that's nothing to sneeze at," said Ed Patru, the group's spokesman. "After Election Day, we'll measure our success based on the impact we've had on the issues that are important to us."

The slowdown in giving appears to have had a disproportionate impact on Republicans. Obama holds an enormous money advantage in the closing weeks of the campaign. His ads have been bolstered by mail and phone-bank efforts largely financed by labor unions. The AFL-CIO alone has directed more than $50 million to persuade its members to support Obama and other Democrats.

Another major source of support for Democrats has come from MoveOn.org, which in the past had raised its money almost entirely from wealthy donors. In this cycle, the group shifted its approach, using its enormous e-mail list to raise "hard money" -- direct donations that are within legal limits and reported to the FEC. "Despite the much ballyhooed chill on 527s, there are a lot of groups with hard-money capacity," said Tom Matzzie, a Democratic operative who previously served as Washington director for MoveOn. "There's less hard money on the right."

The outside group that has spent the most on ads this cycle is the American Issues Project, the creation of another Swift Boat Veterans patron, Texas billionaire Harry Simmons. When the group surfaced, it announced $2.6 million in ads, including the first television spot linking Obama to the controversial Vietnam-War-era radical William Ayers. But the effort has tailed off in recent days.

"I don't get the impression that these guys have a ton of money," said Tracey, the media analyst. "I think it's just an unwillingness for people to plunk down big checks right now. I don't know if that money's going to show up in the next two weeks or if it's pretty much over at this point."