Start the conversation
It's no secret that the rich use their money to influence the ballot, but in this year's election cycle they have created a new, more insidious way to do it.
They are called super PACs and they are choosing your next President.
Super PACs (political action committees) have drawn attention in recent months because of their outsized influence on the Iowa caucuses and the New Hampshire primary.
Case in point: One super PAC that supports former Massachusetts governor Mitt Romney called Restore Our Future spent more than $3 million in Iowa attacking former Speaker of the House Newt Gingrich with great effect.
The month-long blitz of negative ads played a major role in knocking Gingrich from first to fourth in the polls. As late as Nov. 30, Gingrich lead in Iowa with 31% to Romney's 17% according to a New York Times/CBS poll.
However, when the caucuses were held on Jan. 3, Gingrich limped to the finish line with just 13% of the vote while Romney took 25%.
But the Romney campaign is not the only one benefiting from super PACs. Every major presidential candidate has a super PAC working on their behalf
These organizations can raise and spend unlimited amounts of money, with the only restriction being that the super PAC cannot "coordinate" with the candidate.
In a super PAC, individual donations of $500,000 to a $1 million or more are not uncommon.
"The sky's the limit,"Columbia Law Schoolcampaign-finance expert Richard Briffault told USA Today. "We are back to the pre-Watergate era of unlimited amounts of money."
Although the law does require disclosure of the donors and how much they give, the use of tax-exempt entities has created loopholes that donors can hide behind.
After a brief period when the Internet made it possible for less well-heeled candidates to mount successful grassroots fundraising campaigns by tapping large numbers of small donors, the super PACs have dramatically increased the ability of the wealthy to sway elections.
"It's just proven to be a vehicle for getting around contribution limits," Michael Malbin, a scholar at the Campaign Finance Institute, told The Washington Post. "It's made for people who've already maxed out."
Created by a 2010 Supreme Court decision, Citizens United vs. Federal Election Commission, super PACs provide what may be the most devious way yet around 40-year-old campaign finance laws designed to prevent unlimited fundraising.
In fact, the country is worse off because of the ill-conceived precaution that the candidates cannot coordinate with the super PACs.
Attacks Without Accountability
For one thing, the new rule does away with candidate accountability.
So no matter how vicious or untrue a super PAC's attacks on an opponent, candidates can legitimately claim "it's not my fault."
Romney did precisely that in the middle of a debate when Gingrich confronted him about Restore Our Future's barrage of attacks.
"As you know, under the law, I can't direct their ads. If there's anything in there that's wrong I hope they take it out," Romney said.
In fact, the rules governing super PACS are so laughable that comedian Stephen Colbert created one as a joke.
But in fact, former staffers and aides operate these super PACs on behalf of the candidates, making obvious coordination with the candidate unnecessary.
Getting caught is not even a concern. Given how easily the rule can be circumvented, it's nearly impossible to police.
And the folks who run the super PACs certainly aren't shy at all about what they're up to.
"We're Newt's super PAC. We take out marching orders through the media for Newt Gingrich," Rick Tyler, a former Gingrich spokesman and advisor to Gingrich super PAC Winning Our Future told Politico. "I do what Newt tells me through the media. And it's all within the confines of the law."
Super PACs Aren't Going Away
The disconnect in name only also means that candidates can publicly criticize the idea of super PACs even while reaping their benefits.
"Campaign finance law has made a mockery of our political campaign season," Romney told MSNBC morning host Joe Scarborough in December. "We really ought to let campaigns raise the money they need and just get rid of these super PACs."
Don't hold your breath.
The number of registered PACs has exploded from 80 in 2010, when they collectively spent $90 million, to more than 250 today.
And even though the Republican groups are getting most of the attention now, expect to hear more from Democrat-oriented super PACs shortly. There's already at least one super PAC backing U.S. President Barack Obama called Priorities USA Action.
"I have no faith that Democrats want campaign finance reform any more than Republicans. They talk of it, but they don't want it," Christopher Shays, a GOP Senate candidate in Connecticut who as a congressman helped pass the 2002 campaign finance law known as McCain-Feingold, told Politico.
News and Related Story Links:
- Money Morning:
How Bain Capital Could Sink Mitt Romney
- Money Morning:
Wealthy Congressmen Don't Feel Your Pain
- Money Morning:
An Investor's Guide to the 2012 Iowa Caucuses
- Money Morning:
The Debt Ceiling Debate: Will the Democrats' Gambit Lead to a Victory in the 2012 Election?
- The Washington Post:
Stephen Colbert gives super PAC to Jon Stewart, mulls presidential run in South Carolina
- The Atlantic:
Super PACs: The WMDs of Campaign Finance
- The New York Times:
PACs’ Aid Allows Romney’s Rivals to Extend Race
- Associated Press:
Big change in '12: Big GOP money from 'super PACs'
- The Wall Street Journal:
The Super PAC Boomerang
About the Author
Dave has been a journalist for more than 35 years, including 18 spent at The Baltimore Sun. He has worked as a writer, editor, and page designer at different times in his career. He's interviewed a number of well-known personalities - ranging from punk rock icon Joey Ramone to Apple Inc. co-founder Steve Wozniak.
Over the course of his journalistic career, Dave has covered many diverse subjects. Since arriving at Money Morning in 2011, he has focused primarily on technology. He's an expert on both Apple and cryptocurrencies. He started writing about Apple for The Sun in the mid-1990s, and had an Apple blog on The Sun's web site from 2007-2009. Dave's been writing about Bitcoin since 2011 - long before most people had even heard of it. He even mined it for a short time.
Dave has a BA in English and Mass Communications from Loyola University Maryland.