The Center for Public Integrity

Tuesday’s Republican runoff for U.S. Senate in Texas is the most expensive congressional race this election, thanks largely to super PACs supporting the underdog tea party candidate over the far-better funded favorite.

Thus far the race has attracted a total of $13 million in spending by super PACs and other independent groups, according to Federal Election Commission records.

Texas Lt. Gov. David Dewhurst has raised nearly $30 million for the race against former state solicitor general and tea party favorite Ted Cruz — more than $21.5 million of it from his own personal fortune. That’s about three times as much as Cruz. Dewhurst’s campaign has also outspent Cruz’s by a ratio of about 3-to-1, according to FEC records.

Meanwhile, super PACs backing Cruz have spent $7 million according to reports filed with the FEC through Thursday, nearly as much as the $7.6 million spent by Cruz’s own campaign. Dewhurst, however, has benefited from $6 million in support from two Texas super PACs, one of which is backed by heavyweight Texas donor Bob Perry and billionaire Harold Simmons.

That’s far less than his campaign has spent, however; the Dewhurst campaign reported approximately $24.5 million in total disbursements in its most recent FEC filing in mid-July.

Super PACs were created following the 2010 U.S. Supreme Court’s Citizens United decision. They can accept contributions from unions, corporations and individuals and spend the money on ads attacking or supporting candidates but are prohibited from coordinating with a candidate’s campaign.

The two men are vying to fill the seat currently held by senior Republican Sen. Kay Bailey Hutchison, who decided not to run for re-election.

Republicans and conservative super PACs have pounced on President Barack Obama’s July 13 comment at an event in Virginia: “If you’ve got a business — you didn’t build that.”

Thursday’s ad from American Crossroads, the football-themed “Replay,” hammers home their talking point: that Obama believes small business owners didn’t build their businesses on their own.

The super PAC’s July 24 ad “Build” also uses the quote, as has the Mitt Romney campaign and other GOP candidates. The Republican National Committee’s video “The More Context You Get, the Worse It Sounds” also takes advantage of the admittedly artless quote.

But in fact, the more context you “get,” the more holes show up in the argument.

Obama’s speech on July 13 focused on government investments — in infrastructure, public schools and research. He talked about the investors, the educators and the inventors that underlie the American economy.

It becomes clear with context that Obama is not dismissing the effort of business owners: “The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together,” Obama said seconds after the “you didn’t build that” comment.

But the ads show the quote as a stand-alone; no context is provided. The Romney campaign goes so far as to play the statement on a loop for 15 seconds in an online video.

The RGA Right Direction PAC is a Washington, D.C.-based super PAC, registered with federal regulators to make independent expenditures supporting or opposing candidates. So what is it doing giving $1 million directly to the Republican running for governor of Indiana?

The donation to Mike Pence, the largest to his campaign, appears to be a way around state laws limiting corporate contributions to candidates.

“In one way, it’s legal,” said Andrew Downs of the Center for Indiana Politics, at Indiana University-Purdue University Fort Wayne. “But if you say this is a way to give in excess of corporate limits, that’s also absolutely true.”

Right Direction is funded entirely by the Republican Governors Association, a so-called “527” organization dedicated to electing as many Republicans to governorships as possible — a mission fueled by contributions from some of the largest corporations in the country. In Indiana, candidates can accept unlimited donations from individuals and political action committees but only $5,000 from corporations and unions. Corporations and unions can also give to PACs, but only in small sums.

Whether the check to Pence was drawn on a bank account that contained corporate money is not a matter of public record.

Donations come from one fund

In an email, RGA spokesman Michael Schrimpf said “nothing in our reports suggests” that the organization gave corporate funds to Pence. All RGA expenditures, he said, come from a general fund.

“It’s the new model of disclosure subterfuge,” said Bob Biersack, a senior fellow at the Center for Responsive Politics and former longtime Federal Election Commission official. “It’s not what a normal human being would call transparent.”

New Jersey-based Jet Set Sports is among the sponsors of the U.S. Olympic team. It could also be described as a corporate sponsor of Republican Mitt Romney’s candidacy.

It’s a sponsorship that comes with some unwelcome baggage for Romney. Jet Set’s founder was a major player in the scandal that surrounded the 2002 Salt Lake City Olympic games — a mess that Romney has been credited with cleaning up. 

Jet Set Sports Holding, L.P., which has offered luxury hospitality packages for the Olympic Games for three decades, is one of more than 100 companies to donate to Restore Our Future, the main super PAC backing Romney’s presidency. It donated $100,000 to the group last November.

Jet Set Sports’ connection to Romney doesn’t end there, though.

Company founder and chairman Sead Dizdarevic and his wife Margaret each donated $50,000 to Restore Our Future in January. And Jet Set Sports President Mark Lewis is working in his home state of Montana as a co-chair of Romney’s finance team.

Lewis and both Dizdarevics have also donated directly to Romney’s campaign.

Lewis gave Romney $2,300 during his failed presidential bid four years ago and has given Romney $2,500 so far this cycle. Similarly, in 2007, Sead Dizdarevic donated $2,300 to Romney and Margaret gave $1,900. This election, each has given $2,500 to Romney as he tries to unseat Obama.

A decade ago, Dizdarevic was implicated in the bribery scandal surrounding the Olympic Games in Salt Lake. Organizers of the games had allegedly offered perks to International Olympic Committee members to secure the games.

Getting into the spirit of the Olympics, Priorities USA Action, a pro-President Barack Obama super PAC, released “Romney’s Gold” Wednesday, blasting the former Massachusetts governor’s tenure with Bain Capital.

The ad depicts footage from the 2002 Salt Lake City Olympics, which Mitt Romney has been credited with saving, and some creative narration describing the countries with which he has ties. (The opening ceremonies are Friday.)

"There’s Mitt Romney, who ran the Salt Lake City Games, waving to China — home to a billion people. Thousands owe their jobs to Mitt Romney’s companies," says the announcer. "India, which also gained jobs thanks to Romney, an outsourcing pioneer. And Burma, where Romney had the uniforms made for the 2002 games."

The announcer continues with Switzerland, Bermuda and the Cayman Islands, accusing him of using the nations’ favorable banking laws to add to his wealth.

Republican-aligned super PACs have benefited from far more corporate cash than their Democratic counterparts — a revenue stream created in the wake of the controversial Citizens United U.S. Supreme Court decision two years ago.

The top two super PACs — the pro-Mitt Romney Restore Our Future and Karl Rove’s American Crossroads — have raised nearly $24 million in contributions from companies so far this election cycle, a Center for Public Integrity analysis has found. Donors include hedge funds, energy companies, dietary supplement makers and even a popcorn manufacturer.

The list includes a handful of Fortune 500 and other publicly traded corporations, but donors are more likely to be privately held businesses, often organized as limited partnerships or limited liability companies.

Businesses account for only about 5 percent of donations to the four most prominent Democratic super PACs. Labor unions, which were also given greater spending freedom thanks to the Citizens United decision, make up a much larger percentage of receipts.

Proponents of campaign finance deregulation have frequently downplayed the role of money from profit-making businesses to super PACs, but their presence worries campaign finance reform advocates.

Dems dwarfed by GOP super PACs

The Center’s analysis found that more than 100 companies have collectively donated more than $14.2 million to Restore Our Future, the pro-Romney super PAC started by aides of the GOP presidential nominee. That’s 17 percent of the $82 million the group has raised through the end of June.

Only a small number of businesses have given to the pro-President Barack Obama super PAC, Priorities USA Action, and ironically, most of the money raised has come from lobbying shops.

Since it was launched in April 2011, Priorities USA Action has raised just $771,000 from businesses. That’s about 5 percent of the $21 million that the super PAC has raised through the end of June.

Two of these six donors to Priorities are firms specializing in government relations with offices in D.C., blocks from the White House.

Obama himself does not accept campaign contributions from registered federal lobbyists, nor does the Democratic National Committee. The president has also had a policy of refusing to hire lobbyists to work for his administration, except under special circumstances.

The lion's share — $600,000 — has come from a Washington, D.C.-based “strategic advisory firm” called Perennial Strategy Group, LLC.

While Perennial’s services include government relations, it has not been registered as a lobbying firm since April 2011. However, between July 2003, when it first registered to lobby, and April 2011, it reported more than $1.3 million in lobbying income to Congress.

Records show Perennial’s clients over the years have included Regions Financial Corp., Hewlett-Packard, the Avis Budget Group car rental company, the energy company Southern Co. and the MGM Mirage casino.

Perennial’s founder and CEO Lamell McMorris, has donated the legal maximum of $5,000 to Obama’s re-election campaign. McMorris, who is also on the national board of directors of the NAACP and is a former CEO of the Southern Christian Leadership Conference, has further given the legal maximum of $61,600 to the DNC during the past two years.

The battle between two Republicans for the open U.S. Senate seat in Texas is becoming increasingly ugly with super PACs doing much of the dirty work.

The Texas Conservatives Fund, a super PAC supporting Republican Lt. Gov. David Dewhurst, is running an ad that features a mother whose son committed suicide after a stay at a for-profit juvenile detention facility, the developer of which Cruz, Dewhurst’s opponent, defended in court.

The ad, released Monday, is called “Ted Cruz Should Be Ashamed.”

Dewhurst and tea party-favorite Cruz, the state’s former solicitor general, face off again on July 31 since neither candidate was able to win a majority in last May’s primary.

The new ad refers to Cruz’s legal representation of Robert Mericle, a developer involved in the “kids for cash” scandal in Pennsylvania in 2008. Two judges were accused of accepting bribes from Mericle to send children to his facilities.

Mericle pled guilty to concealing evidence of a felony, according to news reports.

By linking Cruz, a high-profile appellate lawyer, to Mericle, the ad is somewhat misleading. According to both Cruz’s campaign website and news reports, Cruz represented Mericle in a civil suit over breach of contract with an insurance company, which was refusing to pay to help settle civil claims resulting from the scandal, the Texas Tribune reported.

Cruz was not involved in the criminal case against Mericle.

The kids-for-cash scandal has nonetheless become a flashpoint in the runoff election.

Conservative super PAC American Crossroads made one of the largest single ad buys of the election so far, spending nearly $8 million on ads opposing President Barack Obama, the group reported to the Federal Election Commission Friday.

Co-founded by Republican strategist Karl Rove, American Crossroads spent $7.9 million on air time to Crossroads Media and $40,000 on ad production to McCarthy-Hennings Media Inc., the same firm that created the negative ads for pro-Mitt Romney super PAC Restore Our Future.

American Crossroads posted “Build” on YouTube Friday, an ad attacking Obama’s position on small business, and “Smoke” on Thursday, which blames Obama for not fixing the economy and frames Obama’s attacks on Mitt Romney’s business record as a smokescreen.

“Smoke” is airing for 11 days in Colorado, Florida, Iowa, Michigan, North Carolina, New Hampshire, Nevada, Ohio and Virginia, according to news reports. American Crossroads has not issued a press release.

One of the ad’s central claims, that Obama added $4 billion in new debt every day, is misleading, according to an analysis by the Associated Press.

Congress holds the nation’s purse strings. Furthermore, the ad takes an overly simplistic view that the national debt is a major driver of the weak economy, according to the AP analysis.

New Mexico’s U.S. Senate race, which pits former Republican congresswoman Heather Wilson against current Democratic congressman Martin Heinrich saw more outside money flow in from environmental groups opposing Wilson.

The nonprofit Sierra Club Political Committee reported spending $140,000 on salaries, benefits, consulting and media buys against Wilson, according to documents filed with the Federal Election Commission Thursday.

On July 17, the Sierra Club began airing the anti-Wilson ad, “Dirty Water, Dirty Politics,” featuring a school child drinking from a water fountain gushing brown water.

And Environment America Inc., also a nonprofit, reported spending about $13,000 canvassing and strategizing on behalf of Heinrich between July 11 and July 19, the group reported.

The race, to replace retiring Democratic Sen. Jeff Bingaman, is as an important test for Republicans since the state has a large Hispanic population and those voters tend to lean left. A win for Republicans in New Mexico could help the GOP take the Senate.

The League of Conservation Voters has aired three TV ads against Wilson since June 21: “We’re All Paying for It,” “Emma” and “Who’s Wilson With?”