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Campaign Spending Shows Political Ties, Self-Dealing

So far, top super PACs and presidential candidates have spent more than $306 million in ways that hint at potential coordination. In some cases, this could violate FEC rules. 

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American Crossroads uses four of the same consultants as Restore Our Future and three of the same consultants as Romney’s campaign. (americancrossroads.org)

April 20: This story has been corrected.

For an example of the fluidity of campaign finance rules, as well as the tangled web of connections between candidates and super PACs, look no further than the digital consulting firm Targeted Victory.

So far, the firm’s hauled in $4.1 million working for Mitt Romney’s presidential campaign and American Crossroads, the super PAC launched by GOP strategist Karl Rove. The firm’s initial manager was a close friend of Rove. It used to be in an office on the same floor as an office suite housing four other companies working for Romney, American Crossroads or the pro-Romney super PAC Restore Our Future.

With the rise of super PACs, the jet-fueled political action committees that can take unlimited contributions, many campaign finance watchdogs have focused on the hundreds of millions of dollars being raised this presidential election cycle. But after the most recent campaign filings came in last week, ProPublica decided to track the other side of the equation: Where the money goes.

Our analysis found that more than $306 million has been spent so far by major super PACs and the five leading presidential candidates. In some cases, payees serve both candidates and the super PACs aligned with them, raising the specter that groups may be working together in ways that violate the rules, campaign finance experts said. We also found instances in which overseers of some political action committees directed hefty fees to their own companies, a legal form of self-dealing.

Among the top 200 payees, there were dozens of firms about which little is known. With generic names like Financial Innovations, Election Connections, Postage for Direct Mail Fundraising or Strategic Media Services, it’s sometimes unclear who runs them or exactly what they do. Many have short histories: Four of the six top-paid consulting firms for Winning Our Future, the super PAC supporting Newt Gingrich, have been launched since July.

At the same time, familiar names cropped up regularly among the top earners. Democratic strategists David Axelrod, Ronald Rosenblith and Barack Obama’s team from 2008 are back in place. On the Republican side, there were companies connected to Karl Rove, Carl Forti, David Carney and Michael Dubke.

Targeted Victory’s initial manager was Tony Feather, a close friend of Rove’s who served as the political director of the Bush-Cheney campaign in 2000. Feather also co-founded longtime GOP consulting firm DCI Direct and its sister firm, FLS Connect. Targeted Victory co-founder Michael Beach oversaw the national voter turnout program for the Republican National Committee in the 2008 election cycle.

Like some other outside spending groups, super PACs are allowed to raise and spend unlimited funds, but they are not allowed to coordinate with campaigns.

Yet the rules governing “coordination” have been narrowly interpreted and rarely enforced by regulators. As long as candidates and super PACs don’t discuss the granular ins and outs of their spending, such as the placement and length of election ads, they can discuss strategy. Candidates can even help raise money for super PACs, or even, say, ask their father or good friend to donate.

Campaign-finance experts say there’s plenty of room for activity that average people would consider “coordination” that legally doesn’t count. They also said when consultants work for both a super PAC and a candidate, regulators should question whether they are operating independently.

“Any time it’s the same individual who is providing advice and services to a campaign and a super PAC, there is the danger of coordination,” said Rick Hasen, a law professor at the University of California-Irvine who runs the Election Law blog. “I’m sure most of the individuals playing these roles are getting legal advice on what they can and cannot do. The human brain being what it is, though, I think it is very difficult to separate those roles.”

Expenditure records show that a company called TargetPoint Consulting provides “survey research” to Mitt Romney’s campaign while also doing “direct mail consulting” for Restore Our Future, the pro-Romney super PAC. In February, the founder told The New York Times that while he understood it could look “ridiculous,” his company had gone to great lengths to prevent improprieties, setting up a firewall between employees working on the different campaigns.

Even when the ties between super PACs and candidates are less direct, spending records show how their spheres overlap. For example, partners of GOP polling company Public Opinion Strategies set up NMB Research, a polling company that works for Restore Our Future. One Public Opinion partner, Neil Newhouse, serves as the chief pollster for Mitt Romney’s campaign.

American Crossroads uses four of the same consultants as Restore Our Future and three of the same consultants as Romney’s campaign. (This is hardly a shock: Carl Forti, a former political director for Romney, is political director of American Crossroads and senior strategist for Restore Our Future.) TargetPoint Consulting works for all three groups, although it’s only done $1,700 worth of work for American Crossroads.

On the Democratic side, NGP VAN, a company that sells software that helps with fundraising and FEC compliance, has done work for both the Obama campaign and two super PACs backing Obama. The Obama campaign has paid NGP VAN $130,000; the two super PACs have paid it less than $17,000.

Beyond potential coordination, the analysis done by ProPublica also showed how some who have set up super PACs are directing donors’ cash into their own pockets.

GOP strategist Nick Ryan, a former aide to Rick Santorum, for instance, started his direct-mail and telemarketing firm, Global Intermediate LLC, shortly after launching the pro-Santorum super PAC, the Red White and Blue Fund. Global Intermediate is now the second-biggest vendor for Red White and Blue, earning almost $1.9 million so far. While Ryan couldn’t be reached for comment, the super PAC’s spokesman, Stuart Roy, acknowledged in an email to the Los Angeles Times in February that Ryan’s participation with Global Intermediate was “no big mystery, they have done our phones and mail programs in multiple states (very effectively, I might add).”

Candidates are prohibited from using campaign funds for personal use and must pay “fair market value” if they hire companies run by relatives or other insiders, but super PACs, like regular PACs, have no such restrictions. For years, the FEC has asked Congress to expand the ban on candidates using campaign funds for personal use to PACs. So far, Congress has not acted.

“My standard sound-bite advice is ‘donor beware,’ when giving to any political action committee,” said Paul S. Ryan, of the non-partisan Campaign Legal Center.

Some insider transactions are on a smaller scale. A man named Gary Franchi Jr. runs both Revolution PAC, a super PAC known for its Ron Paul action figures, and Restore the Republic, a social networking site for Paul followers. Since last July, Revolution PAC has been paying Restore the Republic more than $1,700 a month for office rent. When asked if the office had telephones, desks and computers, Franchi replied: “Oh, yeah.”

But the office turned out to actually be a box in a Northbrook, Ill., UPS store. Franchi did not return follow-up calls for comment.

Correction: This story said that Targeted Victory’s office was located in the same building as the four other GOP firms sharing the same suite. But co-founder Michael Beach says Targeted Victory subleased space on the same floor in 2010 and early 2011. After a time without an office, Targeted Victory moved into another building in Alexandria, Va.

Think campaign spending by Super PACs, or the candidates themselves is high and getting higher, just wait until 2016, when, after Obama has served his second four year term, the race on both sides of the aisle will be wide open.  They are starting to line up already and we haven’t even had the election this year.  Santorum is young enough to run again.  Andrew Cuomo is already the unannounced Democratic favorite.  Certain we are talking in the low billions.  May not have to wait for ‘16 for that.

This whole thing is a farce of epic proportions. It isn’t going to turn out well.

Stephanie Palmer

March 28, 2012, 4:27 p.m.

All of these groups should be sued for false advertising. The people that actually believe the venom and lies that they present should be sued for overwhelming stupidity.

You have nobody to blame but yourselves. When full-blown fascism blows in, thanks to a cozy agreement between our current “white African American” president (as framed in the latest intended-to-incite corporate media race-card neologism re: Zimmerman) and the rest of the Nationalist Socialist political machine that putt him in power, you can thank yourselves for constantly steering us toward national political solutions when our days and our alternative media could have been filled with calls for voluntary grass-roots land reform that would let us take back our farms and our homes.

Problem is, you children of industrialist overlords have no interest in restoring our historic agrarian economy. Your sole intent is to consolidate us “workers” in urban enclaves where you can control us with empty political rhetoric, all the while assuring yourselves you deserve your jobs in air-conditioned offices away from the factory floor because your inheritance bought you a degree at a prestigious university.

They are so toxic we need a SuperFund to clean them up.

A democracy should be composed of intelligent reasonable people who discuss the factual issues based upon sound evidence.  It is supposed to be one man one vote and now it is a million dollars and I want a big chunk of your votes for what I consider to be important.  If we continue our current course we will loose true democracy.  We must have a government that is of the people, by the people and for the people.  It that too much to ask?

Use to be one person, one vote. Now it is one dollar, one vote.

Sandra, I’m to blame for Super-PACS? Get real. It was Pro-Republican leaning Supreme Court justices that ruled against fair campaign contributions in the Citizens United case that led to Super-PACS.

We have “W” to thank for many things; immoral wars, impoverishing our country, and disasterous Citizens United decision.

Even the enlightened are no better than the unenlightened, so don’t expect anything to improve for humanity, because 99.99% of the population will eternally refuse to accept that ALL URBAN SOCIETIES SELF-DESTRUCT, and there simply is no other possible outcome (just look at all of history), save the possibility that humanity becomes eternally and utterly enslaved to a system/machine far more intelligent which will then manage all the affairs of mankind on behalf of humanity with 100% domination of all aspect of life.

It is not a matter of evil & conspiracy, etc, as much as it is a matter of human nature & population density.  An urban society must, by definition, be composed of a dependent class of workers and an elite class of co-dependent organizers/leaders/controllers/managers.

It must necessarily be socialist, to care for those bred into the system, which the system may not be able to accomodate at any given time.  This means theft from those who have, to give to those who have not, which leads to the debasing of morality.  It also necessitates those that can weild power, which necessarily means corruption and forced obligations to the system, which means violence and enslavement.

The more dependents that enter the urban system, the more forceful powers and corruption you will have, because IT IS JUST HUMAN NATURE OPERATING WITHIN THE PARADIGM OF THE SYSTEM’S NECESSITIES; and to point fingers at any other thing as “a/the problem” is to live in an illusory and false dreamland where the hope of modifying human nature within a man-made hierarchy of power and control is kept alive.

SORRY - human nature can NEVER BE MODIFIED TO DO ANYTHING ELSE THAN WHAT IT IS CURRENTLY DOING in a hierarchy of power & control.

The ONLY SOLUTION is to live in a society WITHOUT HIERARCHIES OF POWER & CONTROL!  An agrarian society is the only society where the individual can remain sovereign, independent, & free from force, power, and control.

END OF STORY.  Don’t like it?  Too bad.  As far as I am concerned - the good, bad, and the ugly can all go to hell, and enlightned/awake or not, you all deserve the hell your ignorance and endless birthing is creating.  There is no future for humanity except for the destruction of humanity.

The only 2 paths ahead are total enslavement to a more intelligent machine/controller, or massive death and a return to an agrarian societu.  And so the cycle of failed civilizations continues ...

But I for one, and not staying tuned anymore.  You are all fools, awake or not - it makes no difference.

Don’t reckon it matters how crooked the spending gets.  If somebody is prosecuted, all they have to do is appeal all the way up to the Supreme Court. 

If the individuals being prosecuted are members of the right/representatives of the few, the members of the right that are on the Supreme Court will give them a free pass. 

If the individuals being prosecuted represent the many in America (whether they are, politically-speaking, either middle America or the left), the members of the right on the Supreme Court will still give them a free pass so as to avoid setting a precedent that would inhibit the right’s ability to replace of democracy with pay-for-play.

It is the the right - the few - who benefit the most from shoving democracy aside with the bulldozer of unrestrained wealth, after all.

And no, that isn’t “cynicism” - that is a pragmatism.  It is a conclusion based upon the right’s behavior and, in particular, the behavior of those justices on the Supreme Court and those members of Congress who are the property of the right.

Whoa Chad… First, of course all societies self destruct and new ones take their place. But that change doesn’t half to be by revolution or chaos. It can happen gradually. Look at England for example. It has been almost 400 years since their civil war and they have managed to go from a Monarchy to a Dictatorship (Cromwell) back to a Monarchy to a Constitutional Monarchy to a World Empire to a Parliamentary Democracy during that time without imploding. They survived countless wars and the loss of their empire and managed to maintain civil society.

What we are talking about ARE age old struggles between those who have benefited from the status quo and those who have not, between the powerful few and the disorganized masses.

However, unlike in the past, the benighted masses (we in the 99%) have some weapons at our disposal to confront the powerful elite that we did not possess before, namely the ability to communicate quickly and en mass via the Internet and the ability to do something about our situation without bloodshed should we ever get our act together, i.e. the vote.

Last…I’m not sure what that last bit about a return to an agrarian society was all about. I for one, don’t want to be dominated by blood crazed horse lords from the steppes which is what always happens to agrarian societies.

It amazes me that people will boycott a company for changing their soft drink formula, but not voting for a politician backed by a shady fundraiser?  Nah.

If you don’t like it, make it clear to the candidate that you won’t stand for it.  When the least-funded candidates start getting closer to winning, they’ll get the idea.

Or hey, you could also look for the next elitist savior and denounce the majority of humanity as not worth your time.

Election costs keep going up but at some point it’s got to come down to a cost/benefit analysis. Is it really worth all the money that’s thrown into it? I can see a fatigue setting in on both sides at some point and spending settling down.

I am a life long Republican that is embarrassed at even saying that I am (this will be changing). If money is power then I would love for someone to start an expose of companies that advertise on FOX as well as other networks or individual that continue spreadlng their vitrol with entirely too much immunity and no proof.  By the way, I though that “spinning” was illegal in court or maybe that is not dishonesty? Why can politicians openly lie with impunity when any of us can be sued for the same

Our founding fathers had plenty of faults but they also held on to what we would call an idealistic view of the future and just look what happened.  We do have a responsability to those founders who many times sacrificed it all.

Brian, that point should already have passed.  It costs billions of dollars to get a job that’s going to pay about two million.

Yet the people spending find it profitable.  Why?

Ask the banks, insurers, the pharmaceutical companies, food companies, energy companies, and so forth.

To pick an obvious and current example, you spend a billion now, and when you raise prices so that your quarterly profits are eighty billion, the government feigns rage and takes away four billion in subsidies.  So where’s the point of diminishing returns when a one billion dollar investment makes you (at least—the subsidies aren’t gone yet) seventy-five times that?

And that’s just oil.  Lather, rinse, and repeat for Hollywood, insurance, drugs…

As long as you have special intrests in POLITICS you will never get the truth . Millions have been spent to BUY YOUR VOTE . I thought that the USA was a REPUBLIC not a DEM ?