2 Jan 2011
Now that 2011 is upon us, we pause to review the most notable money-in-politics events during a waning 2010, as determined by the staff of OpenSecrets.org:
1.) SUPREME COURT AXES CORPORATE POLITICAL SPENDING RESTRICTIONS
In January, the U.S. Supreme Court shocked the political universe with its ruling in Citizens United v. Federal Election Commission.
The case had started with a dispute over whether corporate-funded video-on-demand, and related promotional advertisements, could be regulated by the Federal Election Commission. It ended with a 5-4 ruling allowing corporations to spend unlimited amounts of money on both “electioneering communications” and “independent expenditures” -- the legal terms for advertisements that mention or show a federal candidate and those that expressly advocate for the election or defeat of a candidate.
The decision overturned nearly a century of prohibitions on such overt corporate politicking and armed companies with the ability to spend as much as they want, whenever they want on political messages saying just about anything they want. The decision was lauded by top conservatives and many First Amendment advocates but sharply criticized by campaign finance reform groups and leading Democrats, including President Barack Obama.
Months later, Murray Hill, a Maryland-based public relations company, went so far as to launch a congressional bid in jest to protest the decision.
2.) CASH EXPANSION IN FEDERAL POLITICS
When the final reports are in, and the final dollar is tallied, two milestones will almost assuredly be passed: this year will be the most expensive ever in terms of federal lobbying efforts, and this election cycle will be the most costly midterm ever -- with ease.
The 2010 election cycle alone will cost an estimated $4 billion, easily surpassing the roughly $2.8 billion spent during 2006 midterms. That $4 billion figure is also comparable with the total spending during 2004 federal elections, when a presidential election was layered on top of the congressional contests also being waged.
Meanwhile, members of Congress this year reported a significant expansion in their personal wealth -- an estimated 15 percent -- between 2008 and 2009. Nearly half are estimated to be millionaires.
While this cash expansion isn't necessarily shocking, since money in politics routinely grows year after year, it's hardly occurring during a period of rapid economic growth when such statistics would be more understandable. Major, protracted legislative fights over health care, financial reform and energy policy served as drivers for special interests, corporations and unions keen on lobbying the federal government as much as they could.
3.) SUPER SPENDING OUTSIDE ORGANIZATIONS
During the 2010 election cycle, spending by outside groups -- not including national party committees -- climbed to $294 million. That’s a 327 percent increase from the $69 million spent during the last midterms.
Including party committees such as the DCCC and NRCC, the total spending by outside groups was actually $479 million -- a 60 percent increase above 2006 cycle levels. Such spending will likely only increase during the 2012 cycle when control of both Congress and the White House are at stake. This acceleration has been fueled, at least in part, by several recent federal court decisions that loosened campaign finance rules -- including Citizens United v. Federal Election Commission, SpeechNow.org v. Federal Election Commission and EMILY’s List v. Federal Election Commission.
In this new legal landscape, liberal and conservative special interest groups were allowed to raise unlimited contributions from individuals, unions and corporations for expenditures that expressly advocated for or against candidates. More than 50 new “independent expenditure-only committees” -- more commonly referred to as “super PACs” -- registered with the FEC throughout the cycle. EMILY’s List, a group that favors abortion rights, was the first group out of the gate to exploit these new fund-raising and messaging freedoms.
But by Election Day, the Karl Rove-linked conservative outfit American Crossroads towered above all other super PACs, liberal and conservative. American Crossroads pulled in $28 million this year, with 54 percent of that haul coming from just four businessmen and another third coming from corporations. Overall, conservative-aligned super PACs spent $1.30 for every $1 spent by liberal-linked ones.
4.) TEA PARTY BREWS VICTORIES FROM ANTI-INCUMBENT FERVOR
When the dust settled after the Nov. 2 election, only 85 percent of incumbent members of the U.S. House were set to return to work in January -- the lowest re-election rate since 1948. Meanwhile, 85 percent of senators also retained their seats.
Throughout the year, several high-profile incumbents had been felled during their party’s primaries or nominating conventions, including Sen. Bob Bennett (R-Utah), Sen. Arlen Specter (D-Pa.), Rep. Bob Inglis (R-S.C.) and Rep. Alan Mollohan (D-W.Va.). In Arkansas, Democratic Sen. Blanche Lincoln narrowly survived a primary challenger after being forced into a run-off Lt. Gov. Bill Halter, who was backed by MoveOn.org and many labor unions.
Elsewhere, moderate Rep. Mike Castle (R-Del.) was defeated in a U.S. Senate Republican primary by Christine O’Donnell, a Tea Party-favored candidate. Likewise, in Alaska’s Republican primary, attorney Joe Miller, the Tea Party’s choice, prevailed over incumbent Sen. Lisa Murkowski -- although Murkowski mounted a successful write-in campaign during the general election to retain her seat.
In many of these races, the Tea Party Express’ political action committee and other Tea Party-aligned groups played a pivotal role. While not all of the Tea Party movement’s preferred candidates prevailed on Election Day, the activists helped propel a new class of incoming lawmakers, including Sen.-elect Rand Paul (R-Ky.), Sen.-elect Marco Rubio (R-Fla.), Sen.-elect Mike Lee (R-Utah) and Rep. Allen West (R-Fla).
5.) UNDISCLOSED DONORS: A RISING TIDE
The proliferation of undisclosed political spending this year was yet another major consequence of the Citizens United v. FEC ruling. It wasn't necessarily supposed to turn out that way, of course: eight Supreme Court justices signed a section of the Citizens United ruling that affirmed the value of disclosing the funders of political advertisements.
But in the months following the controversial decision, a gusher of undisclosed spending by nonprofit organizations, unions and trade associations erupted. Such groups spent nearly $130 million on advertising that either urged voters to choose sides in the 2010 election or targeted a federal candidate in the weeks immediately before primary and general elections, according to the Center for Responsive Politics' data. They did so without revealing who was financing the messages. And so long as these organizations don't have a "primary purpose" of engaging in politics, it's perfectly legal for them to occlude the people or special interests fueling their efforts with stacks of cash.
Meanwhile, Democrats, who bore the brunt of the surge in November, could only watch as the tide rose against them. Their legislative push to tighten disclosure of political spending in the wake of the court ruling -- a bill called the DISCLOSE Act -- sank after the party failed to close ranks and overcome staunch Republican opposition.
6.) HEALTH CARE AND FINANCIAL REFORM: SPECIAL INTEREST CATNIP
In the world of money in politics, nothing motivates big spending like the word "reform." And there was certainly plenty of that to go around in 2010: Overhauls of the nation's health care and finance sectors were signed into law this year, and major legislative efforts were also made at cap and trade bills and even immigration.
Those efforts were like catnip -- rally, really strong catnip -- for special interest groups trying to protect their industries and influence reform efforts. The pharmaceutical industry, Wall Street, big oil, big business: All had banner years in political spending, spending millions upon millions of dollars in federal lobbying and campaign contributions.
Some got what they wanted, some didn't; but whether President Barack Obama signed the legislation into law or not, you better believe these groups had their fingerprints all over the outcomes.
7.) BP AND GOLDMAN SACHS: TOXIC POLITICAL ASSETS
Not all special interest groups in the financial and oil and gas industries had a strong year: BP contributed to causing one of the worst environmental disasters in U.S. history while the Securities and Exchange Commission accused Goldman Sachs of defrauding investors after taking a taxpayer bailout -- then fined the company $550 million. In the aftermath of these corporate meltdowns, BP and Goldman Sachs could have marched their political action committee treasurers into the hall of the Capitol wearing suits stitched of money and still have been turned away.
The companies are regularly heavyweights when it comes to campaign contributions, but this year, it was hard to find any members of Congress willing to accept donations from their political action committees, after some very public disasters rendered those political donations essentially toxic.
8.) SELF-FUNDED CANDIDATES FLAIL AND FALTER
Money can't buy you love, right? It apparently can't buy you an election, either.
Time and again this cycle, candidates entered congressional races armed with millions of dollars -- even tens of millions in a few notable cases -- and exited with concession speeches. Fewer than one in five candidates who spent at least half a million dollars of his or her money ultimately won the office he or she sought.
Take the case of Republican Linda McMahon, the former chief executive officer of World Wrestling Entertainment who spent upward of $50 million worth of her own fortune on Connecticut's U.S. Senate race only to be power slammed at the polls by the state's Democratic attorney general, Richard Blumenthal.
Former Hewlett-Packard Chief Executive Officer Carly Fiorina? The tough-talking Republican likewise emptied her pockets of millions of dollars in a futile effort to unseat Sen. Barbara Boxer (D-Calif).
No one, however, is more emblematic of this phenomenon than Jeff Greene, a billionaire businessman whose self-financed $24 million-plus couldn't even earn him his own Democratic party's nomination in Florida's U.S. Senate race.
9.) DRESS REHEARSALS FOR 2012 PRESIDENTIAL HOPEFULS
For most politicos, the 2010 midterms are an opportunity to win political office. For others, however, it's a potential dress rehearsal for what they hope to accomplish in 2012.
A number of prominent Republicans are already flirting with presidential runs, and these suitors have wasted no time wooing prospective supporters by making and taking donations, as well as traveling the nation.
Although the presidential primaries don't begin for another year, potential candidates have already been laying groundwork for possible bids and raising vast sums through leadership PACs, committees that allow politicians to raise cash and then dole it out to friends and allies.
Of the 10 leadership PACs to collect the most money since January 2009, fully half are operated by Republicans who are rumored to have presidential ambitions.
For instance, former presidential candidate and governor of Massachusetts Mitt Romney raised $8.8 million during the 2010 election cycle. That’s second only to Sen. Jim DeMint (R-S.C.), who have fashioned himself as a kingmaker within the Tea Party movement. Sarah Palin, the former Republican governor and John McCain’s running mate in 2008, ranks third behind Romney at $5.4 million in receipts.
Minnesota Gov. Tim Pawlenty, former Arkansas Gov. Mike Huckabee and former Pennsylvania Sen. Rick Santorum also rank in the top 10, having pulled in about $2 million to $3 million a piece to their leadership PACs this cycle. Several other potential GOP presidential hopefuls also collected six- or seven-figure sums.
10.) CHARLIE RANGEL CENSURED BY HOUSE COLLEAGUES
Rare is the day when the U.S. House will censure one of its own, voting to shame a member for particularly unbecoming conduct.
That is, however, exactly what happened to Rep. Charles Rangel (D-N.Y.), who the House found guilty of 11 ethics violations, including failing to properly disclose his personal assets, improperly soliciting funds and tax evasion.
Rangel now also enters his 21st term stripped of the stature he once had as a leading member (and one-time chairman) of the House Ways and Means Committee.
Honorable Mention: The Abramoff Affair
If anyone was still waiting for closure eight years after the sentencing of Jack Abramoff, they probably got it in 2010. Need an accounting? Well, one of the worst corruption scandals to hit K Street was featured in not one but two movies this year -- one a scathing documentary, the other a comedy. Abramoff the former super lobbyist-cum criminal was released from prison and brought to toil in a Baltimore pizza parlor. And Bob Ney, a congressman also convicted in the scandal, turned up in Tibet, where he is studying Buddhism at a monastery.
Honorable Mention: GOP Tied Up in Bondage Club Scandal
Staffing? Check. Phone banks? Check. Advertising campaign? Double check. But partying at a sex fetish club? For the Republican National Committee, nearly $2,000 such kinky expenditures surfaced in a routine accounting of its finances. To say it put RNC Chairman Michael Steele in a bind would be an understatement.
Honorable Mention: Revolving Door Between Government and Lobby Industry Spins Fast
Former high-ranking executive branch officials. Congressional staffers. Even members of Congress. Hundreds of these former public servants are now serving private clients this year, joining Washington, D.C.'s revolving door club, where governmental experience is sold to the highest special interest. Despite Obama's stated goal of curtailing this practice, the president alone has little power to stop it, since Congress is primarily responsible for creating and amending lobbying regulations.