Churchill once called Russia a riddle, wrapped in a mystery, inside an enigma. Much the same kind of thing might be said about the labyrinthine complexities of United States election funding which, as the 2012 presidential race slowly picks up pace, may set records in both obfuscation and how much
partisan groups will spend.
Forget the lacklustre Republican candidates, united only in hatred of President Barack Obama, but noticeably lacking in cogent policies to extricate the nation from the worst financial crisis since the 1930s, with fears the US could default on its US$14.3 trillion ($16.9 trillion) debt. The real fiscal action is buried in a new fundraising model, the super PAC.
The super PAC - or political action committee - is the latest manifestation of a long line of ingenious methods used to raise money for political ends.
It owes its existence to a January 2010 Supreme Court ruling, "Citizens vs Federal Election Commission", that removed any ceiling on the amount of money corporations, unions or individuals can spend to support or rubbish political candidates.
Super PACs can't give money directly to candidates. But they can promote or attack them, provided such efforts are not co-ordinated with the candidate or his or her party.
Traditionally, corporations, unions or individuals with political ends must channel money through PACs. In the record US$4 billion spent on last November's midterm congressional election, almost US$300 million came from independents not tied to parties or candidates. But super PACs may have deeper pockets and thus more clout.
Despite the dire US economy, some believe the combination of intense political stakes - a stand-off between Obama and Republicans - and the court's decision will unleash a money tsunami that will engulf previous electoral spending.
"One hears that accurately at every election," says Michael Malbin, executive director of the Campaign Finance Institute, a campaign spending think tank.
"It's likely they will spend more money in 2012 than in 2010. And 2010 was about double that of the 2008 election. But it's a little difficult to know what the impacts will be."
And while super PACs must disclose donors to the Federal Election Commission, ProPublica, an investigative reporting website, says this may take months. This is handy if you want to create hit-and-run attack ads, the Rottweilers of US politics.
Obama thundered that the ruling was "a major victory for big oil, Wall Street banks, health insurance companies and other powerful interests."
But the left has also embraced the dark fiscal arts.
There are at least half-a-dozen super PACs staffed by seasoned party players from both sides of the aisle in Washington. They include Priorities USA Action (a pro-Obama group), American Crossroads (advised by Karl Rove, formerly President George W Bush's "brain"), plus Majority PAC and House Majority PAC (both Democrat fundraising vehicles).
The super PACs join previous fundraising wheezes, such as 501 [c]'s, a nonprofit US taxcode. And while contributors to super PACs have to legally identify themselves, the beauty of the 501s, from a partisan viewpoint, is that donors can remain anonymous, although they are "absolutely prohibited" from taking part in any political activity.
"We're in very dangerous territory," Fred Wertheimer, who runs campaign finance watchdog group, Democracy 21, told ProPublica.
"There's one word to describe what's going on in the campaign finance area: the word is 'obscene'. And it's going to result in scandal and corruption and, eventually, opportunities for reform."
America has already been there. The FEC was created in 1975 to regulate PACS after the Watergate scandal, which exposed extortion tactics used by President Richard Nixon's re-election committee.
"We may or may not see it [corruption] in this election," says Malbin. "But there's no question there's the potential for candidates, directly or indirectly, to twist the arms of potential donors. As President Nixon did in 1972."
Direct corporate spending was banned by Teddy Roosevelt in 1907. Unions were curtailed in the 1940s and 1950s. The vacuum was filed by PACs. The FEC set a US$5000 top limit for direct contributions to candidates or federal parties.
Money pushed back. Besides 501s there are 527s, which allows groups to raise unlimited money as long as it funds issues. Guns and abortion are favourites.
Besides super PACs driven by insiders, the 108 groups registered with the FEC as of July 1 include Americans for Prosperity (created by billionaire and Tea Party svengali, David Koch), Restore Our Future (to promote GOP White House candidate Mitt Romney), Our Voice (to promote Tea Party favourite Sharron Angle), and ColbertPAC (formed by comedian Steve Colbert to highlight the system's ills).
Recently, the FEC agreed Colbert could raise PAC money via The Colbert Report, his TV show. The FEC also reaffirmed the US$5000 limit for candidates. The ruling was issued after Republican Super PAC, set up by campaign finance lawyer James Bopp jnr, said it would ask for unlimited contributions, a prospect prominent Democrats fundraisers feared might put them at a "competitive disadvantage". Bopp said the FEC ruling was "meaningless".
For, as Malbin explains, no such restriction applies to event organisers. "The candidate will say, 'this is a really good person, this is a great organisation', and walk out of the room. Then the person who's been identified as great can say,'anything you can give will help'. That sounds like a formula for candidates to raise money without worrying about contribution limits. Candidates don't raise money. Instead, they become beneficiaries of money."
The Supreme Court ruling turned campaign finance on its head, said Bill Allison, executive director with the Sunlight Foundation, which investigates this issue.
He sees independent groups as a fig leaf to avoid the stench of corruption if money is shovelled directly to politicians. "The argument is, 'How could that influence a politician if he has no control over that money, or didn't raise it himself?' What you have is a system without proper disclosure and where big money can really have an impact."
The GOP candidates are scrambling for funding. As of June 30, US$35.6 million had been collected, compared with US$118 million at the same time in 2007 for the 2008 White House race. Romney leads the pack. Team Obama have kept shtum but the Washington Post estimates the take as between US$60 million and US$80 million.
Rick Hansen, a campaign finance expert at the University of California, Irvine, says low spending is determined by two factors. First, the GOP push will remain inchoate until next year's primaries select the nominee.
"I think a lot of the money is being held back. Once there's a Republican nominee to go against Obama we could then see a surge of money." Then there's the moribund US economy. But given the money thrown at the midterms, he believes "we're on pace for a record-setting election".
Significantly, independent groups have had time to digest the landmark court rulings, "There are all kinds of ways of spending money in 2012 that were not clear in 2010," says Hansen
An internet ad that depicted Democrat Janice Hahn, who won a Los Angeles byelection this week, as a gyrating pole dancer, giving rappers dollars so "they could rape and kill" - a reference to her support for a scheme to help ex-gang members - may be a foretaste of 2012. Her rival denied knowledge of Turn Right USA, the super PAC responsible.
Less offensive slots, seemingly from each party's campaign, tackle Obama's deficit policy. In fact, they came from duelling independents, Priorities USA and Crossroads GPS, which duked it out at state level.
Crossroads GPS, and its affiliate American Crossroads, spent US$38.6 million in the midterms. A US$7 million TV blitzkrieg against five Democrat senators seeking re-election was set to debut yesterday, along with other ads attacking Obama's deficit policy, the issue du jour in national US politics.
The big question is if the dogs of war will shape campaigns. One of the most notorious examples was the Swift Boats Veterans for Truth ad that, by casting doubt on John Kerry's record as a Vietnam War hero and becoming a news story, torpedoed the Democrat senator's chances in 2004.
The man behind the Swift Boat ads was Bob Perry, a Texas real estate tycoon. A posting on Progressive United, says Perry has fed US$500,000 into American Crossroads. Of course, no one knows if he gave anything to Crossroads GPS.
High stakes
US$1 billion
Amount President Barack Obama's campaign team think they could raise in the most expensive yet White House campaign
US$86 million
Total raised by Barack Obama and the Democratic Party in the last three months
US$35 million
Raised by Republican candidates in the same period, though not all aspirants have reported their fund-raising tallies
260,000
Small donors have for the first time given money to Barack Obama's re-election bid, compared with about 180,000 donors during the first half of 2007 when he first ran for President.Fears of Nixon-style corruption abound because of a new fundraising system which allows big contributors to hide
It's time to supersize our cash in hand
President Barack Obama speaks at a fundraiser in Philadelphia. Photo / AP
Churchill once called Russia a riddle, wrapped in a mystery, inside an enigma. Much the same kind of thing might be said about the labyrinthine complexities of United States election funding which, as the 2012 presidential race slowly picks up pace, may set records in both obfuscation and how much
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