Money in Politics in 2013: The Crucial Stories You May Have Missed

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This originally appeared at the Huffington Post.

The year after a presidential election, fewer people focus on campaign finance issues, but 2013 was well worth your attention. There were financial scandals, a new Supreme Court case, laws rewritten and the anticipation of more money than ever before. Below are 10 of the biggest campaign finance stories of the year.

10. Big money took over North Carolina. Gov. Pat McCrory (R) won election in late 2012 with huge support from the political network funded by wealthy conservative activist Art Pope and immediately announced that Pope would be his budget director. In the ensuing year, the state enacted highly divisive right-wing legislation along the lines long proposed by Pope’s outside network of think tanks and political organizations. North Carolina became example number one of how a single donor can influence the political direction of an entire state in the post-Citizens United world.

9. Get ready for the most expensive midterm election ever. More than $815 million has been raised or spent on the 2014 midterm elections and 2013 special elections already. Spending by independent groups like super PACs and “dark money” nonprofits is ahead of the 2012 pace, when these groups laid out nearly $1 billion.

Next year’s Kentucky Senate race, pitting Senate Minority Leader Mitch McConnell (R) against both a tea party primary challenger and a very well-financed Democratic candidate, is also well ahead of the fundraising pace set by the two most expensive Senate campaigns in history. The 2012 Massachusetts race cost candidates Scott Brown and Elizabeth Warren a combined $82 million, and the 2000 New York race between Hillary Clinton and Rick Lazio topped $70 million. The Kentucky candidates have raised nearly $20 million and that’s just through September 2013.

8. Are Democrats winning the super PAC war? Just one year after conservative independent groups outspent liberal groups 2.5 to 1, the spending pattern has reversed. Liberal independent groups doled out $16.5 million in 2013, compared to $9 million from conservative groups, and liberal super PACs outraised their conservative counterparts 2 to 1 in the first half of the year.

These numbers, however, are somewhat deceiving. Most of the money was spent in special elections that were highly favorable to Democrats, so major conservative groups sat out those contests. The financial comparison also does not account for “issue” advertising that masks an electoral purpose. Conservative groups have already spent millions on this form of independent spending that doesn’t have to be disclosed to the Federal Election Commission.

7. OFA turned into a dark money nonprofit. Following another successful electoral campaign, the Obama for America machinery, with its troves of data desired by practically every Democratic candidate in the country, sought a new home. The group transformed itself into the 501(c)(4) nonprofit Organizing for Action, the exact type of dark money group that the president had lambasted during his 2012 reelection.

It may have become a bit trite, even if true, to mock the president for his repeated hypocrisy on the issue, but the transformation of his campaign organization into a nonprofit relying on voluntary disclosure — the group does disclose its donors, but only as it sees fit — solidified that hypocrisy for many advocates of openness and campaign finance reform.

6. Obama bundlers were nominated to be ambassadors. Again, after promising to change the culture of Washington, President Barack Obama continued the tried and true practice of nominating his biggest campaign fundraisers to jobs as overseas diplomats. According to the Center for Public Integrity, Obama has nominated 23 campaign bundlers for ambassadorships since January.

The American Foreign Service Association, which represents active and retired Foreign Service officers, has called for an end to this practice: “Now is the time to end the spoils system and the de facto ‘three-year rental’ of ambassadorships. The United States is alone in this practice; no other major democracy routinely appoints non-diplomats to serve as envoys to other countries.”

5. California officials tore back the curtain on dark money in their state. The state’s investigation into an $11 million contribution to a ballot campaign committee late in 2012 revealed the inner workings of the dark-money nonprofit network connected to the billionaire Koch brothers. Due to poorly redacted documents released during the investigation, many of the original donors were uncovered, including the owners of the Gap clothing brand, investor Charles Schwab, casino billionaire Sheldon Adelson and real estate developer Eli Broad, who had publicly supported the ballot initiative even as his money funded the opposition.

The success of the inquiry propelled Ann Ravel, then head of the California Fair Political Practices Commission, into the vice chairmanship of the FEC.

4. The Republican Party faces civil strife. This tea party vs. big business battle is apparently a real thing. The US Chamber of Commerce plans to dump $50 millioninto supporting primary candidates from the GOP’s establishment wing — even if those candidates don’t differ much on policy from the tea partiers they oppose.

The key contests to watch are the Senate primary races in Kentucky, Mississippi, Nebraska, South Carolina and West Virginia and the House primaries in Michigan’s 3rd and 11th districts and Idaho’s 2nd District.

3. The Supreme Court debates maybe the next Citizens United. In October, the justices heard arguments on another potentially groundbreaking campaign finance case, McCutcheon v. FEC — this time challenging the aggregate contribution limits that restrict overall giving by an individual donor.

Following the 2010 Citizens United decision, which upended politics by freeing independent groups to spend unlimited sums of money, including corporate and union funds, campaign finance cases have been watched very closely. Some observers have even worried that the Supreme Court could use the McCutcheon case to roll back all contribution limits, although legal experts consider this unlikely.

A ruling in favor of plaintiff Shaun McCutcheon would free the wealthiest donors to give millions more to candidates and political parties than they give now. An end to aggregate limits could also allow a political party’s multiple committees to evade ordinary contribution limits by shifting money amongst each other. The Huffington Post has previously written about the dozens of donors who broke the aggregate limits in 2012 and showed how Mitt Romney’s presidential campaign used state party committees to evade those limits.

2. IRS scandal led to proposed clearer rules for nonprofits. If you think the public relations rollout for Obamacare has been bad, remember how the Internal Revenue Service slowly admitted that it had improperly targeted conservative groups for heightened review. After repeatedly denying any such misdeed, IRS official Lois Lerner apologized for doing precisely that in response to a planted question at a meeting of nonprofit tax lawyers. Months of howling by conservatives and hours of congressional testimony ensued until it was revealed that the IRS had targeted not just conservative groups but also liberal groups and other nonpolitical organizations.

The scandal did bring about greater scrutiny of the agency’s oversight of political groups, particularly dark money nonprofits that aren’t required to disclose their donors. These groups have proliferated over the last several years following the Supreme Court’s rulings in FEC v. Wisconsin Right to Life and the Citizens United case. In November, the IRS proposed new regulations for political activity by such nonprofits. The draft regulations, which were criticized from all sides, will take months, if not years, to wend their way through the regulatory process. Nonetheless, they mark a step toward greater transparency for political spending by nonprofits and, potentially, less abuse of the nonprofit tax code to hide donors’ identities.

1. States raised contribution limits. After the Citizens United ruling, proposals were put forward across the country to increase disclosure, rein in rampant independent spending and pass constitutional amendments to reverse the decision. The most popular idea — among politicians, at least — was to increase the amount of money they can raise to even the playing field.

Nine states — Alabama, Arizona, Connecticut, Florida, Maryland, Michigan, Minnesota, North Carolina and Wyoming — increased their campaign contribution limits in 2013. The feat was accomplished by state legislatures run both by Republicans and by Democrats.

Minnesota state Rep. Ryan Winkler (D) told The Huffington Post earlier this year, “Increasing the money flowing directly through candidates from individuals is a better system. It might not be a perfect world, but we have to live in the world that the Supreme Court created for us and do the best we can.”

The multiple bills to raise contribution limits highlight the gulf between the public, which sees far too much money in politics and supports the reversal of Citizens United, and the lawmakers, who simply want as much money as the independent groups empowered by that decision. Expect even more states to adopt hike their limits in the coming years.

Permanent honorable mention: The FEC is an ongoing disaster.

Paul Blumenthal is a reporter for The Huffington Post covering money and influence in politics. He tweets @PaulBlu.
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