On 'Moneyball' and Super PACs
Just like the executives and big-league scouts in “Moneyball” who misread the baseball market by focusing on outdated statistics, political pundits breaking down the latest presidential fundraising figures are looking at the wrong numbers.
Published in Politico.
Political analysts are about to parse the latest presidential fundraising figures filed with the Federal Election Commission.
Will former Massachusetts Gov. Mitt Romney approach or surpass Texas Gov. Rick Perry’s $17 million total? Will Herman Cain’s recent successes translate into a spike in campaign contributions? Can anyone compete with President Barack Obama’s $70 million total? The talking heads are chomping at the bit to start comparing totals.
But like the executives and big-league scouts in “Moneyball” who misread the baseball market by focusing on outdated statistics, the analysts breaking down the latest FEC reports are looking at the wrong numbers.
Traditional baseball scouts looked at old-fashioned stats like batting average and home runs. But these numbers don’t accurately predict how many runs a team will score. “Moneyball” showed there are other numbers — “sabermetrics” — that more accurately predict success.
The same is true in our current political environment. Candidate fundraising, of course, tells us something about how successful campaigns are likely to be — but it’s a comparatively smaller piece of the puzzle than in past elections.
The new campaign finance numbers that are changing the political playing field are coming from independent groups — not the campaigns. You can’t accurately predict which candidates will succeed in 2012 if you don’t account for these stats.
Independent spending has soared since the Supreme Court’s Citizens United decision in 2010 opened the door for corporations and labor unions to spend treasury funds on independent electioneering.
In the 2010 elections, spending by noncandidate groups increased more than 425 percent compared with the last midterm election before Citizens United. Nearly half that money — about $135 million — was spent by groups that didn’t reveal any information about their donors.
Spending is always higher in presidential election years. If outside spending increased at the same rate in this presidential race, we’d see close to $1.3 billion in noncandidate spending in 2012. That would more than dwarf Barack Obama’s record-shattering $750 million total in 2008.
If 2010’s exponential increase in outside spending weren’t enough to suggest that 2012 will be different, there’s a “hot new thing” that promises to change the rules of the game dramatically: the candidate super PAC. These groups, closely affiliated with specific candidates, exist only to elect those candidates. Just about everybody now making a serious run for the presidency has one.
Super PACs dedicated to electing a specific candidate obliterate the notion of independence, making a mockery of campaign contribution limits.
The groups are possible because of a lesser-known ruling in Citizens United. Much ink was spilled about the Supreme Court greenlighting corporate electioneering. Less attention focused on the court’s declaration that independent election spending can never lead to corruption or the appearance of corruption.
For decades, fighting corruption justified limiting the size of political campaign contributions. But after Citizens United, courts reasoned that if independent expenditures, by definition, cannot corrupt, then there is no justification for limiting contributions to groups that define themselves as “independent.”
Voilà: the candidate super PAC. As long as a super PAC says it is independent of a campaign, and doesn’t formally coordinate with the candidate, then it doesn’t have to abide by those pesky contribution limits that stop candidates from raising funds in million-dollar checks.
Super PACs have created a supersize loophole in federal contribution limits. Federal law caps donations to a candidate at $2,500. But with candidate super PACs, deep-pocketed donors can blow past that $2,500 with hardly a pause. You can write the candidate of your choice a $2,500 check — then mail the candidate super PAC a check for $250,000. Or more.
This isn’t just a theoretical possibility. It’s how campaign financing works in the 2012 election. A recent analysis by Democracy 21, The Campaign Legal Center and the Center for Responsive Politics found that in the second quarter, more than 50 donors gave the maximum legal amount to Romney’s campaign — and then wrote additional checks to Restore Our Future, the “independent” super PAC dedicated to electing Romney president.
Their donations totaled $6.4 million — and came in chunks as large as $1 million.
Presidential candidates aren’t the only ones in the super PAC game. On Thursday, congressional Republicans cheered the new Congressional Leadership Fund, set up by leading Republicans to spend millions to expand their majority in the House. The Democrats have their own variation, House Majority PAC, because they, too, know super PAC money is what counts in 2012.
There’s one more wrinkle to the 2012 shadow campaign: Super PAC fundraising totals for July through December don’t have to be disclosed until Jan. 31, 2012. With several states rushing to reschedule their primaries before Feb. 1, that means voters in early primary states may be subjected to millions of dollars in super PAC ads before they have any idea who is funding the ad blitz.
Sabermetrics, “Moneyball” showed, aren’t secret. The numbers were there all along — but nobody knew what to look for. Once general managers figured out which statistics mattered, running the numbers was a breeze.
In the 2012 election, on the other hand, everyone knows that the independent spending totals will have a major effect on the outcome. It’s just that, under our current campaign finance and disclosure system, we won’t see the numbers that matter until after the game is won.