Using newly released FEC data, Election Spending 2014: 9 Toss-Up Senate Races examines outside spending in 2014’s nine most competitive U.S. Senate races, the outcomes of which will likely determine which party controls the Senate for the next two years. The report found record highs in total outside spending, “dark money” spending by groups that conceal the identity of their donors, and spending by single-candidate groups. In fact, it is likely that eight of these nine races will match or exceed the previous record high for spending in a Senate race, while less than half the expenditures so far have come from the candidates themselves. In other words, outside money made possible by weak regulation and Supreme Court rulings like Citizens United is giving wealthy spenders more power than ever to buy influence over elections.
Most Americans know that this is an age of skyrocketing spending on elections. Less widely understood is how the source of that spending has dramatically changed in recent years, and what that means for our democracy. Outside spending — spending by those other than the candidates themselves — has increased dramatically both in dollar terms and as a percentage of total election spending. Among outside spenders, the portion coming from the political parties has diminished, as outside groups that are independent of both candidates and parties — or at least claim to be so — increase in importance.
The key players in our political system, candidates and parties, are not necessarily accountable for outside spending. And non-candidate expenditures are often lacking in transparency, leaving their effects on politics mysterious. Increasingly, outside spending is a way for those who can afford it to evade the regulation of elections — to try to influence elections without playing by the rules of our democracy.
We are now seeing the maturation of the system created by the Supreme Court’s deregulatory zeal in Citizens United v. FEC. That decision allowed corporations and unions to spend their general treasury funds on politics. While many feared the decision would result in for-profit corporations spending massive amounts directly on elections, it is now clear that the largest impact was a proliferation of outside groups dedicated to influencing elections (some of which may, in fact, be conduits for corporate money). Citizens United led to the creation of super PACs and an explosion in the use of nonprofit organizations to influence elections. Super PACs and nonprofits can accept unlimited contributions from individuals, corporations, and unions. Nonprofits are not required to disclose the identities of their donors.
The reality of the post-Citizens United world bears little resemblance to the Supreme Court’s rose-colored assumptions. The Court described a system where immediate disclosure would keep the public informed of the potential influence of money. The reality is that most nonparty outside spending originates with hidden sources. The Court assumed that outside spending could not corrupt candidates because it comes from entities whose activity is independent of candidates’ campaigns. The reality is that outside groups, some devoted to electing a single candidate, cooperate with candidates in many ways, potentially making their unlimited contributions as valuable to candidates as the direct contributions that are subject to strict caps.
This report describes the realities created by Citizens United by examining the races where it is likely to have the biggest impact in 2014: competitive races for the U.S. Senate. Money is pouring into these races because the Republicans are widely seen as having a good chance to take the chamber from the Democrats, which along with their solid majority in the U.S. House, would give them control of Congress.
Our main findings include:
- Dark-money groups that hide some or all of their donors accounted for $88.6 million, or 56 percent, of nonparty outside spending.
- In the seven races for which we have data on both candidate and non-candidate spending, dark money amounted to 24 percent of all spending.
- Our analysis does not include tens of millions of dollars spent on ads that are not required to be reported to the FEC, all of which is dark money, meaning the true portion of outside spending is higher.
- Outside spending in favor of Republicans is much more likely to be dark money, (80 percent of nonparty outside expenditures), than pro-Democrat spending (32 percent of which comes from dark-money groups).
- Single-candidate outside groups are active in every state in our sample, and they accounted for approximately half of nonparty spending in Alaska and Kentucky, as well as 30 percent in Georgia.
- There is more single-candidate group spending on the Republican side, at $20 million. Pro-Democrat candidate-specific groups spent $8.3 million. There is reason to believe the partisan difference is due to the fundraising success of Senate Majority PAC, a Democrat-aligned group and the biggest non-candidate spender in our sample. Senate Majority has apparently attracted donors who might otherwise have given to Democratic single-candidate groups.
- Single-candidate groups that are also dark-money groups are a new phenomenon in this election. In our sample, six of the eight highest-spending candidate-specific groups hide some or all of their donors, including the top candidate-specific spender overall.
- Single-candidate groups depend heavily on money from double-dipping donors — individuals who have given up to the legal limit in direct contributions to the favored candidate’s campaign. All but one of these groups got the great majority of their individual donations from maxed-out campaign donors.
- At least 76 donors gave money to single-candidate groups in addition to giving the maximum amount to either the favored candidate’s primary or general campaign.
- Single-candidate groups also accept sizable contributions from corporations and unions, which are completely prohibited from giving directly to candidates. Some groups got all their revenue from these entities.