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Consider the Source

Rick Hill, the Republican candidate for governor of Montana, lost to state Attorney General Steve Bullock despite help from American Tradition Partnership, a nonprofit that bombarded voters with mailers slamming the Democrat. The Center for Public Integrity identified the group’s backers, which included groups dedicated to advancing “right-to-work” legislation in the states. Matt Gouras/AP

GOP gov's group raises $100 million in mostly losing effort

By Paul Abowd and Andrea Fuller

Despite outraising its Democratic counterpart by a 2-to-1 margin, the Republican Governors Association won only four of 11 races in the 2012 election, a far cry from the success it enjoyed two years ago.

The Washington D.C.-based political organization raised almost $100 million, according to recently released Internal Revenue Service data. The group targeted six states it considered winnable, losing five of them. Overall, Democrats won seven of this year's 11 contests, but the GOP still managed to pick up one seat in North Carolina, long held by Democrats.

The top donors to the so-called “527” organization, which can accept unlimited contributions from billionaires, corporations and unions, are familiar Republican Party patrons — No. 1 is Bob Perry, a Texas homebuilder and perennial RGA supporter, who gave $3.25 million. That’s a little more than half of what he gave in 2010.

Billionaire casino magnate Sheldon Adelson is No. 2, with $3 million in donations between him and his wife. According to the latest Federal Election Commission reports, Adelson is the top donor to super PACs in 2012, doling out more than $93 million along with his family.

Conservative billionaire David Koch — who has not made any contributions to super PACs — was the organization’s third-highest donor, writing two checks totaling $2 million. Koch is co-owner of the second-largest privately held company in America, Koch Industries, an energy conglomerate.

Seven of the RGA’s top 10 donors are corporate executives who gave at least $1 million. Two of them, Paul Singer and Kenneth Griffin, are hedge fund managers.

Consider the Source

An ad by the Hardworking Americans Committee opposing Michigan Democratic Sen. Debbie Stabenow. Stabenow retained her seat despite more than $1 million spent against her in the final days of the election.

Last-minute mega-donations fueled super PAC attacks

By Michael Beckel

Billionaire casino owner Sheldon Adelson gave $1 million to a super PAC active in Michigan’s U.S. Senate race during the campaign’s final days, a fact unknown to voters until long after polls closed.

Adelson supplied the bulk of funding for the “Hardworking Americans Committee” with the Oct. 19 donation, Federal Election Commission records show.

The super PAC spent more than $1 million on ads in a futile, last-minute attempt to boost former Republican Rep. Pete Hoekstra in his bid to oust incumbent Sen. Debbie Stabenow, a Democrat.

The deadline for reporting donations made since Oct. 17 was Thursday.

Last-minute contributions are not unusual in politics, but thanks to the 2010 U.S. Supreme Court’s Citizens United decision and a lower court ruling, the amount a donor can give to outside groups’ electoral efforts is unlimited. Furthermore, donations to political action committees during the final three weeks of the election need not be reported until December.

The reporting gap should be closed, say watchdogs.

“Congress should amend our disclosure laws to give voters the information they need to make informed decisions on Election Day,” said Paul S. Ryan, an attorney at the Campaign Legal Center. “With current technology, disclosure is easier than ever for super PACs and other political players.”

Adelson, the top donor to super PACs in the 2012 election by a large margin, along with wife Miriam, also provided all $2 million of Republican Jewish Coalition Victory Fund’s war chest. The super PAC, which did not report any receipts before Election Day, pumped more than $1.7 million into advertising opposing President Barack Obama.

Consider the Source

Montana Governor-elect Steve Bullock. AP

After big U.S. Supreme Court win, Montana nonprofit suffers string of losses

By Paul Abowd

The secretive nonprofit known for its efforts to dismantle Montana’s campaign finance laws has had a rough go of it lately.

In November, American Tradition Partnership failed to sink Democrat Steve Bullock’s bid for governor despite plastering the state with issues of a fake newspaper, one of which displayed the Democrat’s photo alongside pictures of sex offenders.

Bullock beat Republican Rick Hill in a race punctuated by debates over the future of Montana’s stringent campaign finance laws. Bullock ran on his record of defending the state’s spending limits as attorney general, when he faced off with ATP in court.

Bullock’s victory was not the only setback for the organization.

Though the nonprofit and its lawyer, Jim Bopp, won a high-profile U.S. Supreme Court decision in June that knocked down Montana’s century-old ban on corporate and union spending on elections, ATP’s other court challenges to Montana’s disclosure rules and contribution limits have stalled.

ATP’s high-profile lawsuits have also exposed it to a wave of scrutiny regarding its funding and tactics.

In court proceedings, the state’s lawyers obtained the group’s bank records and early donors.

Meanwhile, media reports have laid out evidence of possible illegal coordination with candidate campaigns alongside indications that ATP may have misled the Internal Revenue Service.

The group, founded in 2008 to lob mailers into Montana and Colorado legislative races attacking environmentalists and moderate Republicans, has also come to represent the questionable tactics used by nonprofit groups to cover the tracks of donors and funnel unlimited money into elections, say reform advocates.

Consider the Source

Mark Lennihan/AP

Drug lobby donation went to pro-Democratic nonprofit

By Michael Beckel

A nonprofit group in Montana that supported a conservative state Supreme Court candidate was not the recipient of a $500,000 donation from the nation’s top drug lobby as suggested earlier this week and probably wouldn’t accept the money even if it were offered.

“I’ve never raised a dime from a pharmaceutical company,” said Republican state Sen. Jason Priest, a board member and former executive director of the Montana Growth Network, which produced radio advertisements and mailings during the election.

“Guys like PhRMA, they want more government,” he said. “They want all this ‘Obamacare’ stuff, all these health care exchanges, the expansion of Medicaid and things that I don’t like.”

The Pharmaceutical Research and Manufacturers of America (PhRMA) gave $500,000 to a nonprofit group called “Montana Growth,” as the Center for Public Integrity reported this week.

Records appeared to indicate the funding went to the only “Montana Growth” that reported any spending to Montana’s Commissioner of Political Practices this year — Priest’s “Montana Growth Network.”

The Montana Growth Network actually resides in the state while “Montana Growth,” the true recipient of the drug lobby’s donation, lists its address as a mailbox in a UPS store in Washington, D.C.

The Center was able to track down the recipient of the funds by tracing a federal identification number that showed that “Montana Growth” was formerly known as “Economy Forward.” Records indicate its directors are Jessica Bradley and Carrie Schuyler of the Democratic-aligned public relations firm Hilltop Public Solutions, which has offices in D.C., New York and Billings, Mont.

Little is known about the group, but Internal Revenue Service documents indicate that the drug lobby’s contribution supplied the bulk of its funding.

Consider the Source

Sen. Orrin Hatch, R-Utah, right, accompanied by Senate Finance Committee Chairman Sen. Max Baucus, D-Mont., center, and Sen. Jay Rockefeller, D-W.Va., left. Hatch says a tax on medical devices will increase insurance premiums and the cost of care. Lawrence Jackson/The Associated Press

Drug lobby gave $750,000 to pro-Hatch nonprofit in Utah's U.S. Senate race

By Michael Beckel

When six-term GOP incumbent Sen. Orrin Hatch of Utah faced the prospect of a mutiny from conservative activists, his allies within the pharmaceutical industry stepped in to help defend him.

New documents obtained by the Center for Public Integrity show that the drug lobby’s main trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), gave $750,000 in 2011 to Freedom Path, a nonprofit group that spent big to help Hatch win another term.

Despite his solid conservative credentials, Hatch drew a primary challenge from former state Sen. Dan Liljenquist in the 2012 election. Hatch out-fundraised the challenger by an 11-1 margin, but Liljenquist was helped by super PAC FreedomWorks for America, which reported spending nearly $1 million on anti-Hatch ads.

Consider the Source

From left: Federal Election Commission in Washington, D.C., FEC Chairwoman Caroline Hunter Flicker CC, AP/William B. Plowman

Gridlocked election commission awaits action by Obama

By Michael Beckel

The nation’s enforcer of election laws was largely paralyzed during the 2012 election, despite a Supreme Court ruling that left several key money-in-politics issues open to interpretation.

With five of six Federal Election Commission members working on expired terms (one since 2007), President Barack Obama had an opportunity to remake the agency with members more inclined to enforce campaign finance rules, say reformers.

But that hasn’t happened.

The situation hasn’t done much for the agency’s reputation.

“The Federal Election Commission is itself a campaign-finance scandal,” said longtime FEC critic and campaign finance reformer Fred Wertheimer, founder and president of Democracy 21.

“None of the players in the political arena had any reason to believe that the campaign finance laws would be enforced,” Wertheimer said. “The White House needs to address it or else must bear responsibility for this campaign-finance scandal continuing.”

As both Obama and GOP rival Mitt Romney raised hundreds of millions of dollars for their campaigns, long-time allies of each man launched supposedly independent super PACs that served as attack dogs during the long slog of the election.

Former White House aides Bill Burton and Sean Sweeney created the pro-Obama super PAC Priorities USA Action, while former Romney campaign advisers Carl Forti, Charles Spies and Larry McCarthy created the Restore Our Future super PAC to boost the former Massachusetts governor’s candidacy.

Consider the Source

Karl Rove, former Senior Advisor to President George W. Bush Sue Ogrocki/AP

Rove-affiliated groups spend $175 million, lose 21 of 30 races

By Michael Beckel and Reity O'Brien

If Karl Rove was an NFL coach and not a political strategist, he would probably be looking for a new job about now.

Organizations co-founded by the GOP’s most effective fundraiser spent more than $175 million only to see President Barack Obama win a second term and Democrats actually gain seats in the U.S. Senate.

According to a Center for Public Integrity review of spending records, Rove’s super PAC, American Crossroads, went 3-10 during the 2012 election cycle, while Crossroads GPS, its nonprofit counterpart, went 7-17. The two groups, which were both active in a handful of contests, had a combined 9-21 record.

When asked by Fox News host Chris Wallace on Election Night if his groups’ spending was “worth it,” Rove was unapologetic: "Look, if groups like Crossroads were not active, this race would have been over a long time ago.”

Meanwhile, Jonathan Collegio, the spokesman for the two Crossroads organizations, has maintained that “sub-optimal candidate quality” contributed to Republican losses in the Senate and that his groups will be a “permanent entity on the center-right.”

“By leveling the financial playing field, conservative super PACs kept this race close and winnable all the way until the end,” Collegio told the Center for Public Integrity. “Our contributors are of course disappointed with the results, but satisfied with the impact we had.”

Consider the Source

Molly Munger, civil rights attorney and the primary advocate behind Proposition 38 on the California ballot. AP

Californian spends $44 million, loses ballot initiative fight

By Paul Abowd

Marijuana legalization, gay marriage and a state version of the DREAM Act are this year’s ballot initiative winners. But those who gave the largest sums to state referenda poured tens of millions of dollars into their cause — and lost.

Molly Munger was the largest individual donor to a state ballot initiative, giving about $44 million to support a proposal to raise revenue for schools and early childhood education in California, according to the California Secretary of State.

Seventy-two percent of California voters rejected Proposal 38, which was backed by the Pasadena civil rights attorney.

Munger’s father is Charlie Munger, the billionaire vice chairman of Warren Buffett’s Berkshire Hathaway investment firm. She co-founded the Advancement Project with her husband Steven English (who chipped in $3.3 million for Prop 38). In 2000, the group won a billion-dollar lawsuit over inequitable school-construction practices in California.

Munger’s millions equal 5 percent of all federal Head Start money California received in 2009 for its early childhood education programs. A $44 million gift to Los Angeles’ Head Start agency would equal a fifth of the federal grant the city received last year.

Munger outspent her brother, Stanford physicist Charles Munger Jr., a Republican activist who shelled out $23 million on ballot proposals. Munger Jr. opposed Democratic Gov. Jerry Brown’s initiative that sought to raise revenue for schools by upping the sales tax and levies on the state’s wealthy residents.

The measure passed with 53 percent of the vote.

Consider the Source

Rick Hill, the Republican candidate for governor of Montana, lost to state Attorney General Steve Bullock despite help from American Tradition Partnership, a nonprofit that bombarded voters with mailers slamming the Democrat. The Center for Public Integrity identified the group’s backers, which included groups dedicated to advancing “right-to-work” legislation in the states. Matt Gouras/AP

Outside spending makes big difference in state-level races

By Paul Abowd and Chris Young

The explosion of outside spending unleashed at the federal level by the 2010 Citizens United Supreme Court ruling also rocked state races.

Contests for the top executive and judicial spots, in states whose bans on corporate outside spending were invalidated by the ruling, were newly shaped by unlimited cash from out-of-state corporate and union treasuries.

The D.C.-based governors’ associations led the way, nearly keeping pace with candidate spending in several close races. Governors’ races in Montana, Washington and New Hampshire were neck-and-neck as voters were besieged by ads financed by outside spending groups through Election Day.

Montana governor's race

Republican Rick Hill held a slim lead in his race against Democrat Steve Bullock for governor of Montana in a race that had not been determined at this writing. The Republican Governors Association used a super PAC, created in the wake of Citizens United, to support Hill.

RGA Right Direction PAC ran ads in Montana attacking Bullock, and also used its super PAC to funnel millions directly to candidates and parties on the state level.

Consider the Source

 Two conservative groups associated with former Bush adviser Karl Rove raised millions, much of it from undisclosed donors. The two groups, American Crossroads and Crossroads GPS, spent more than $175 million on 2012 campaigns. Tony Gutierrez/AP

Spending by outside groups topped $1 billion by Election Day

By Michael Beckel

Super PACs and other outside groups — most made possible by the U.S. Supreme Court’s 2010 Citizens United decision — spent more than $1 billion on advertising in federal races through Election Day, with 10 organizations accounting for more than half the total.

Conservative groups accounted for roughly 70 percent of spending, including more than $440 million on the presidential race alone, a sum that helped keep Republican Mitt Romney competitive in his bid to unseat President Barack Obama.

The spending wasn’t enough to put the former Massachusetts governor in the White House — nor was it enough for Republicans to wrest control of the Senate away from the Democrats, despite the proliferation of Senate and House candidate-specific super PACs.

The Center for Public Integrity analyzed spending data from the Center for Responsive Politics, gathered from the Federal Election Commission.

David Keating, the president of the Center for Competitive Politics, which favors campaign finance deregulation, says this gusher of spending by outside groups was a boon for democracy.

"There were a lot of competitive races, and super PACs were one of the key reasons why," said Keating, who added that the nascent groups "helped keep Romney competitive," especially between April, when GOP rival Rick Santorum dropped out of the presidential primary race, and the Republican National Convention in August.

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Writers and editors

John Dunbar

Managing Editor, Politics The Center for Public Integrity

John is director of Consider the Source, the Center's ongoing investigation of the impact of money on state and federal politic... More about John Dunbar

Michael Beckel

Reporter The Center for Public Integrity

Michael Beckel joined the Center for Public Integrity as a politics reporter in February 2012, where his focus is super PACs and the infl... More about Michael Beckel

Reity O'Brien

James R. Soles Fellow The Center for Public Integrity

Reity O’Brien is the Center’s 16th James R. Soles Fellow.... More about Reity O'Brien

Chris Young

American University Fellow The Center for Public Integrity

Chris Young is an American University Fellow currently working as a member of the Center’s Consider the Source team.... More about Chris Young

Dave Levinthal

Senior reporter The Center for Public Integrity

Dave Levinthal joined the Center for Public Integrity in 2013 to help lead its Consider the Source project investigating the influence of... More about Dave Levinthal

Ben Wieder

CAR Reporter The Center for Public Integrity

Ben Wieder is the Computer Assisted Reporter for the Consider the Sourc... More about Ben Wieder

Alison Fitzgerald

Senior reporter The Center for Public Integrity

Alison Fitzgerald is a finance and investigative reporter who joined the Center in April 2013 to help lead its financial reporting projec... More about Alison Fitzgerald

Alan Suderman

Reporter The Center for Public Integrity

Alan Suderman is a reporter for the Consider the Source project, where he focuses on the influence of money in state politics.... More about Alan Suderman

Dan Wagner

Reporter The Center for Public Integrity

Daniel Wagner came to the Center in 2013 from The Associated Press in Washington, D.C.... More about Dan Wagner