Campaign Cash Surges From Undisclosed Donors

It might be hard to believe after the political spend-a-thon for the 2008 presidential contest, but this year's elections are on track to set a record for campaign spending.

In the past, new high watermarks for campaign spending followed a sort of zig-zag pattern: There was a constantly rising sum for each presidential election and a smaller, also constantly rising sum for less costly midterm elections.

This year, there's no zig-zag.

A big driver is the surge in independent groups. And this year may set another record, too — in money from undisclosed donors.

Negative Ads

After the astronomical sums of cash thrown into the 2008 campaign, everyone's pumping in even more — about 10 to 15 percent more— according to Kip Cassino, vice president of research at the media analysis firm Borrell Associates.

"Unlike a lot of industries in the United States right now, which are seeing some downturns, political spending is absolutely a growth industry," Cassino says.

Fueling it, he says, is corporate money — dollars liberated by the Supreme Court when it ruled that corporations and unions can be unrestrained in their campaign spending.

Cassino says corporate funds probably account for a 10 percent jump in advertising.

And of course, those advertisements are almost always negative.

"The unwritten charter of these groups is to really be disruptive and try to go in there and turn a race on its head — or put a candidate on the defense," says Evan Tracey, president of the Campaign Media Analysis Group, which tracks political advertising. "And by that nature, most of those ads that they're gonna run this fall are gonna be negative ads."

This includes well-established political players, like the labor unions and the U.S. Chamber of Commerce. And it includes a crop of new big-budget groups, such as American Crossroads, which was organized by some of the Republican Party's top strategists, including Karl Rove.

Under The Radar — And Secret

But not every operator has such a high profile.

"We have a lot of little individual state-type groups that are starting to show up in some of the bigger races," Tracey says. "And I think they're going to play a much larger role in the fall."

One of these is Americans for New Leadership, based in Nevada, the home state of Senate Majority Leader Harry Reid. The firm just spent $70,000 airing an ad about him that said: "Wrong on his votes. Wrong in his record. Wrong for Nevada."

YouTube

Americans for New Leadership spent $70,000 on an ad against Senate Majority Leader Harry Reid.

And while Americans for New Leadership is an example of new groups flying under the radar, it's also an example of secrecy.

The group says it had already spent $300,000 opposing Reid. It hasn't disclosed where any of that money came from. In fact, the trend that's growing even faster than attack ads is not revealing who's financing them.

"In 2004 and 2006, literally 100 percent of the groups were fully complying with the disclosure laws," says Craig Holman of the liberal watchdog group Public Citizen. "Today, most groups do not disclose where they're getting their money from."

The key element here isn't the Supreme Court. In its ruling on corporate money, it called for transparency. But the Federal Election Commission drastically undercut the rules on disclosure. It said that money designated for what are called "electioneering" messages has to be made public. But other contributions don't.

So, what would a donor have to do before his or her identity would have to be disclosed? "You would have to designate, 'I am giving $100,000 to pay for a campaign ad to air in Ohio that targets a specific senator at such-and-such a time,'" Holman explains.

But if you write that $100,000 check without earmarking it that way, no one will ever know who you are.

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