Secret money thrives in presidential, high-profile congressional contests

Introduction

Editor’s note: This story was first published by the Center for Responsive Politics, where Robert Maguire is a researcher and Viveca Novak is the editorial and communications director.

When Crossroads GPS went up with an ad last week accusing Democrat Tim Kaine of wanting to raise taxes, it wasn’t the first time he’d heard that claim from a conservative group. Nor was it the first time the Virginia candidate for U.S. Senate had been the subject of an attack ad — far from it.

And it sure wasn’t the first time he’d been pilloried by a group that won’t say where it gets its money.

That has become increasingly common in the 2012 political landscape. Outside spending so far this election cycle, by super PACs and other groups, has eclipsed that in all previous cycles combined at this point, going back to 1990. And in that universe, money spent by groups that don’t disclose their donors is playing a far bigger role than it ever has.

Kaine ranks No. 3 on our list of the 10 candidates who have attracted the most spending by these groups whose funding streams are a mystery. Shadow money organizations like Crossroads GPS — which GOP operative Karl Rove helped start, and for which he still raises funds and strategizes — have spent $11.4 million attacking him, nearly two-thirds of the more than $18 million in outside money that’s been spent against him (not including spending by political parties). Crossroads is responsible for a staggering $8 million of that.

This week, spending by Crossroads GPS, Americans for Prosperity, Patriot Majority and other nondisclosing groups broke $200 million. Almost all of it — 88 percent — went for attack ads, and 83 percent of that negative spending was directed against Democrats. On the flip side, nearly three-quarters of the shadow money spent to support candidates went to help Republicans.

And that’s counting only the spending that has to be reported to the Federal Election Commission: ads explicitly calling for a candidate’s election or defeat, plus “issue ads” that feature a candidate and run in the weeks before an election. Millions more have been spent on issue ads running far enough before an election that they don’t need to be reported anywhere.

While much of the focus this election season has been on super PACs — which can take money from almost any source, but must report their donors to the FEC on a regular basis — these other outside groups have escaped the same scrutiny. That’s in part because we know much less about them, other than the limited spending totals they have to report. Most are 501(c)(4) “social welfare” organizations under the tax code, and their donors can present them with $5 million, $50 million — any amount at all — without fear of having their names made public. Even the IRS will see only group’s topmost donors.

Presidential Disparity

There’s a striking difference in how shadow money is being deployed in the presidential race. More than fourteen times as much has been spent opposing President Barack Obama as has been spent attacking Mitt Romney. At the same time, Romney has benefited from about eight times as much supportive shadow money spending. In fact, while Romney is second in terms of the total amount of shadow money directed towards his candidacy, he is sixth in terms of overall negative shadow money — behind Obama, Kaine, Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wisc.) and Shelley Berkley (D-Nev.), all Democrats.

More evidence that spending by these nondisclosing groups is overwhelmingly anti-Democrat or pro-Republican: The share of the total shadow money spent on Mitt Romney and Dean Heller — the only two Republicans in the top 10 — that went to support them is far higher than it is for almost any of the other candidates. More than 60 percent of the shadow money spending directed at Romney has been supportive. For Heller, that number is about 14 percent.

The story is very different for the Democrats.

Supportive spending makes up between 0 and 1 percent of the shadow money outlays for seven of the eight Democrats in the top 10. Nearly all of the Democrats on the list have higher total negative shadow money totals than Mitt Romney. Sen. Jon Tester (D-Mont.) is the exception, at 19 percent positive spending.

Of the top 10 races receiving attention from shadow money groups, the presidential contest is by far the highest with more than $89 million spent so far.

On the congressional side, the 10 races with the most shadow money spending are all in the Senate.

The majority — more than 53 percent — of the outside spending in these ten races was done by groups that don’t disclose their donors. In fact, in all races where shadow money spending came to at least $1 million, those groups accounted for 56 percent of all outside spending.

In the House, spending by nondisclosing groups so far has made up nearly all of the outside spending in two races, for New York’s 25th and 21st Districts. In the 21st, about 2.3 million in shadow money has been spent against the incumbent Democrat, Rep. Bill Owens, while about $462,000 has been spent attacking the GOP challenger, Matt Doheny. In the 25th, the entire $1.1 million in outside money that’s been used to go after another incumbent Democrat, Rep. Louise Slaughter, has come from shadow money groups.

The two biggest spenders in the races — Rove’s Crossroads GPS in the 25th, spending $866,000 so far, and Americans for Tax Reform in the 21st, laying out $834,000 as of Oct. 25 — are among a collection of GOP groups that strategize together on a regular basis. In 2010, Crossroads even shared funds with ATR, giving the anti-tax group $4 million — more than a third of what ATR spent that year.

Again, these numbers don’t account for the fact that much of the spending by shadow money groups, on issue ads that don’t run close to an election date, isn’t reported to the FEC. Ohio’s Democratic Senate candidate Sherrod Brown, for instance, was the target of an ad blitz over the summer, much of which was never reported.

In the 100 congressional races where there’s been some shadow money spending since the beginning of September, all told more than 44 percent of the outside spending was done by shadow money groups.

About one-fourth of the outside money spent on the presidential race since September came from groups that don’t disclose their funding sources, totaling more than $57 million.

And of the top 20 shadow money groups that have bought ads for or against the top 10 candidates, 16 are conservative and four are liberal. These 20 groups have spent $142 million for or against these candidates, and 91 percent of that total was spent by the conservative groups.

The three groups doing the most spending — Crossroads GPS, Americans for Prosperity and the U.S. Chamber of Commerce — are all conservative, and the sums they have spent together dwarf the spending by the next 17 organizations combined.

This article is part of an exclusive series by the Center for Responsive Politics on politically active tax-exempt organizations that don’t disclose their donors. You can read the other stories in that series here.