Why the 2012 Election Will Be the Most Expensive Ever

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The 2012 elections are shaping up to be the priciest in history, with the political parties and ostensibly independent "outside groups" gearing up to spend many hundreds of millions of dollars, most of it on political advertising, much of it from donors whose identities will never be known. We got a taste of what to expect last November with the 2010 midterm elections, the first since the Supreme Court's Citizens United ruling allowed corporations, unions and other organizations could spend without limit on political ads, thus blowing the lid off decades of campaign finance regulation.

In the run-up to the election, outside groups, mainly on the right, announced they would capitalize on Citizens by raising millions of dollars in unlimited funds to run political advertisements to help elect their preferred candidates. (Outside groups are prohibited from "coordinating" their campaigns with the candidates.) Some formed new "super PACs," political action committees whose unrestricted donors were fully disclosed. Others formed affiliated nonprofit (501(c)) groups through which corporations and wealthy individuals funneled money for the same purposes but without having to reveal their identities. At the end of the day, outside groups raised and spent nearly $300 million, nearly half of it from undisclosed sources. Republican groups outspent Democratic ones 2 to 1, and annihilated them at the polls.

Read Rolling Stone on Karl Rove's plan to take over the GOP

The same outside groups – plus lots of new ones, including on the Democratic side – are now gearing up for 2012. How will it all play out? And what does it mean for our democracy that wealthy individuals and corporations can anonymously pump millions of dollars into political races? To find out, we called Sheila Krumholz, the executive director of the Center for Responsive Politics, the nation's top money-in-politics research organization.

The 2010 elections saw an unprecedented flood of outside money flowing into congressional races. Is it safe to assume the same will happen in 2012?

 Yes. The 2010 midterms were really a toe in the water to see whether or not there would be any negative consequences. Now the impetus is there for the money to just be off the charts in 2012.

 And 2010 spending was already off the charts, wasn't it?

Outside groups spent over $300 million, four times more than in 2006.

And influenced specific races?

It's hard to say exactly. They had an outsized influence on specific races, and arguably changed outcomes in some.

Where did the money come from?

About 70 percent of the money comes from corporations and their executives. But the big concern from our perspective is not just that organizations now have greater latitude to raise money from corporations and unions; it's that they can do it secretly.

 How does that compare to prior years?

In prior years, we could see most of the money. Now 50 percent is completely under the radar, and that's likely to grow as liberal groups create new options for donors to give secretly. I think this is a really damaging trend for public information, for people to make the right choices based on full knowledge.

In the run up to the 2010 elections, new groups were formed to adapt to the new landscape. Some were "super PACs" whose donors were fully disclosed, but others, like Karl Rove's Crossroads GPS, were sort of front groups for funneling "dark" or undisclosed money to influence races.  And some combined both functions in a kind of affiliate arrangement. How do the pieces fit together?

There's 100 or more of these new entities – the number grows by the week – that exist only to run political advertisements expressly advocating the defeat or victory of a candidate. Under the new rules, they can to offer a menu to their donors, where they say, "You can choose, you can select whether you want your contribution to our organization to be scrutinized by the media and public – in which case you can contribute to our super-PAC.  If you want it to fly under the radar, you can contribute to our 501(c) organization, but the funds essentially go to the same thing.

 Now, Democrats have been slow to get in this game, right?

Well, I think there had been a clear reluctance to take up opportunity provided by Citizens United. President Obama had come out strongly against the decision. But after the Democrats' "shellacking," as President Obama called it, in 2010, advisors came out and said, "Well, clearly that didn't work."

And now we're starting to hear about new Democratic groups.

Yes, the White House advisors essentially provided carte blanche to groups like [former White House deputy press secretary] Bill Burton and [former chief of staff to White House chief of staff Rahm Emanuel] Sean Sweeney's Priorities USA Action, to begin operations to fight fire with fire. They said, "You don't go to a gunfight with a knife." So now there's Priorities USA Action, American Bridge, 21st Century Super-PAC, founded by Media Matters president David Brock, House Majority PAC, a new Democratic-aligned super-PAC has already weighed in on the New York special election. So, you know, the gloves are off.

And it's only just getting started.

On both sides they're going to be forming new PACs, and I would expect that most organizations will offer both the super-PAC and a 501(c) counterpart to provide for maximum fundraising flexibility. It will begin soon, and I expect it to be a juggernaut.

Apart from elections, there's another side to the money-in-politics coin – lobbying. What have you been seeing on that front?

More money is spent on lobbying than on campaigns. Corporations, unions, and other interest groups have spent $3.5 billion a year for the last two years running, and they're nearing a billion dollars for just the first three months of this year. It's very targeted money, and it takes advantage of the fact that constituents and voters aren't paying attention, particularly where the issue is arcane or seem detached from our day-to-day lives. That money has serious influence on the shape of legislation coming out of Washington. In particular, this first quarter of 2011, the AT&T merger with T-Mobile was an opportunity for lobbyists to boost their bottom line; Dodd-Frank is generating a lot of activity for lobbyists, and Elizabeth Warren's beleaguered bureau; communications, electronics, because of the net neutrality issue; energy and natural resources, around regulations and subsidies.

Now, most Republicans – and of course a bare majority on the Supreme Court – argue that these groups and the individuals and corporations that give them money are just exercising their right to free speech. You don't see it that way?

We don't have a position on that. Our goal is not to get money or big money out of politics, but simply to provide information about where that money is coming from. We believe that money that can be scrutinized is not as powerful. If corporations don't need to disclose contributions to non-profits like the Chamber of Commerce or Crossroads GPS, how will voters know who the players are funding these mega-million issue ads and ads expressly advocating the defeat or election of a candidate? How can they judge their credibility, their motivations? When it is hidden away from public view, money has outsized influence, but when we can examine the sources and how much is being contributed and what their goals are – then we can help neutralize that influence.

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