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Expert Brief

High-Dollar 2014 Primary Elections

Several patterns have emerged in the 2014 election season’s high-dollar competitive primaries. This analysis looks at Tea Party fundraising, candidate-specific super PACs, self-financed candidates, and more.

Published: April 29, 2014

[View this analysis as a PDF]

Intro­duc­tion

It is early in the 2014 elec­tion cycle, but already we are seeing spend­ing patterns that shed light on whether some of the many spec­u­la­tions about this year’s polit­ical land­scape are accur­ate. So far this cycle, expens­ive Repub­lican primar­ies have often featured Tea Party candid­ates, but for the most part, they have been out-fundraised. Candid­ate-specific super PACs are provid­ing new oppor­tun­it­ies for big donors to spend at far higher levels than candid­ate contri­bu­tion limits allow. The Bren­nan Center’s analysis of quarterly Federal Elec­tion Commis­sion (FEC) campaign finance filings in 16 compet­it­ive primary races yields data on these and other issues:

  • A large major­ity of high-dollar primar­ies are Repub­lican contests: 12 of 16. Within the 12 Repub­lican primar­ies, at least two-thirds have been iden­ti­fied as having a Tea Party candid­ate. All but two of the Tea Party candid­ates included in this analysis have been signi­fic­antly outraised by primary oppon­ents. In the four  races where candid­ate self-finan­cing did not play a major factor, Tea Party candid­ates on aver­age were outraised by a margin of almost 2 to 1, with Tea Party candid­ates rais­ing just over $650,000 on aver­age and other candid­ates rais­ing almost $1.2 million on aver­age.
  • One contest suggests that the crucial role of candid­ate-specific super PACs in the 2012 pres­id­en­tial elec­tion may fore­shadow a greater role for them in Congres­sional races. Candid­ate-specific super PACs domin­ated outside spend­ing in FL-19, where virtu­ally all the inde­pend­ent expendit­ures came from single-candid­ate groups. The pattern of giving illus­trates the concern that candid­ate-specific super PACs can be vehicles for circum­vent­ing contri­bu­tion limits: three indi­vidual donors who maxed out on direct contri­bu­tions to their favored candid­ate’s primary campaign also bank­rolled single-candid­ate groups with dona­tions ranging from $160,000 to almost $1.6 million.
  • In high-dollar races so far, self-finan­cing by candid­ates is a major factor: 27 percent of money raised came from candid­ates them­selves. In the 16 high-dollar primar­ies, 12 candid­ates have already spent $200,000 or more on their own bids, and four candid­ates have plowed more than $1 million into their campaigns.
  • Small contri­bu­tions are a relat­ively insig­ni­fic­ant aspect of fundrais­ing in high-dollar races: only 9 percent of funds came from donors of $200 or less.
  • In most races, outside spend­ing was only a small percent­age of total spend­ing or nonex­ist­ent, but in recent elec­tions, inde­pend­ent expendit­ures have peaked in the weeks before an elec­tion, so the fact that few races have seen high inde­pend­ent spend­ing is not partic­u­larly surpris­ing. The pattern of last-minute outside spend­ing was starkly illus­trated by one race, FL-19, where inde­pend­ent expendit­ures in the three weeks prior to the elec­tion were five times the amount for the entire first quarter.
  • Dark money contin­ues to be a factor where there has been signi­fic­ant outside spend­ing: 45 percent of inde­pend­ent expendit­ures in the first quarter came from groups that disclose either none or only some of their donors.

Of course, all first-quarter spend­ing was completed before the block­buster Supreme Court decision in McCutcheon v. FEC. At the conclu­sion of this docu­ment, we discuss in further detail how that decision may impact the patterns iden­ti­fied in this analysis.

The 16 races were selec­ted from a longer list of compet­it­ive primar­ies compiled by the Sunlight Found­a­tion, which categor­ized a primary as compet­it­ive if there were two or more viable candid­ates, mean­ing candid­ates that had raised $100,000 by the end of 2013. Our analysis includes all compet­it­ive races where the viable candid­ates together raised more than $2 million as of the end of March 2014. The 16 races in our analysis are there­fore among the races with the highest levels of money raised in House primar­ies so far.[1]

I. Candid­ate Fundrais­ing

Candid­ates in the 16 examined races raised a combined $44.5 million in the first quarter. Large contrib­ut­ors, those who gave more than $200, account for the major­ity of candid­ate fundrais­ing, 52 percent (see Figure 1). Candid­ates who self-financed their race account for over one-quarter of the combined fundrais­ing total. PAC contri­bu­tions and small indi­vidual contri­bu­tions account for 12 and 9 percent respect­ively. Unsur­pris­ingly, since these are primary races that will determ­ine the party’s nominee, party spend­ing is virtu­ally nonex­ist­ent.

Figure 1: Candidate Money Raised by Source

Of the 16 races that satis­fied our criteria of high fundrais­ing by viable candid­ates, most are Repub­lican primar­ies; only four are Demo­cratic contests. Of the primar­ies in our sample that feature a chal­lenge to an incum­bent, four are Repub­lican and two are Demo­cratic. Among the Repub­lican primar­ies, two-thirds feature candid­ates iden­ti­fied as Tea Party favor­ites, conson­ant with the wide­spread expect­a­tion that Tea Party senti­ment will be an import­ant factor in the midterms.[2] Money has not been quick to flow to Tea Party candid­ates, however. In all but two of those eight contests, the Tea Party candid­ate has been signi­fic­antly outraised (see Appendix). Examin­ing only the four Tea Party races where candid­ate self-finan­cing was less than 30 percent of the total raised, Tea Party candid­ates on aver­age were outraised by a margin of almost 2 to 1, with Tea Party favor­ites rais­ing just over $650,000 on aver­age and other candid­ates rais­ing almost $1.2 million on aver­age.[3]

Small Contrib­ut­ors

Of the 16 races analyzed in this brief, small contri­bu­tions made up a minor portion of aggreg­ate fundrais­ing in each race through the end of March (see Figure 2). We define small contri­bu­tions as those from donors of $200 or less, and clas­sify all other indi­vidual contri­bu­tions as large contri­bu­tions.

Nine percent of candid­ate money came from small contrib­ut­ors, dwarfed by large dona­tions. This is consist­ent with the percent­age of small contri­bu­tions to House races for the past several elec­tion cycles. One excep­tion was Utah District 4, where small contri­bu­tions account for approx­im­ately 55 percent of candid­ate funds. This is driven almost entirely by Repub­lican Mia Love, who raised an impress­ive $1.3 million from contrib­ut­ors of $200 or less. Over­all, Mia Love raised seven times more than her oppon­ent in the first quarter and went on to win the nomin­a­tion at the state conven­tion. 

Figure 2: Total Contributions by Individuals

Candid­ate Self-Finan­cing

In several of the races we examined, candid­ates are in large part fund­ing their own campaigns — in some cases to a strik­ing degree (see Figure 3). As noted, across all 16 races, 27 percent of funds come from the candid­ates them­selves in the first quarter. In the 16 high-dollar primar­ies, 12 candid­ates have spent $200,000 or more on their own bids. Four candid­ates expen­ded more than $1 million on their campaigns. In the Flor­ida District 19 race, Tea Party candid­ate Curt Clawson put up more than $2.6 million of his own money and went on to win the nomin­a­tion.

The import­ance of self-finan­cing across these races illus­trates the unique abil­ity of wealthy indi­vidu­als to pass the barri­ers to entry into viable candid­acy. The amount we report for candid­ate self-finan­cing includes both contri­bu­tions from candid­ates to their own campaigns and loans from candid­ates to their campaigns. Of course, loans may even­tu­ally be paid back. But for a candid­ate to be able to loan a campaign a large amount of money even in the short term requires signi­fic­ant finan­cial resources.

Figure 3: Candidate Self-Financing vs. All Money Raised

II. Inde­pend­ent Spend­ing

Across the 16 high-dollar House primar­ies, outside spend­ing totaled $1.8 million, account­ing for 8 percent of all spend­ing through the end of March. This spend­ing was not evenly distrib­uted across all races, however (see Figure 4). The analysis of inde­pend­ent expendit­ures is based on the Bren­nan Center’s review of data files from the Sunlight Found­a­tion, examin­ing total expendit­ures that have been repor­ted to the FEC.

Three races — ID-02, FL-19 and MI-03 — attrac­ted most of the outside spend­ing in the first quarter. In the Idaho contest, outside spend­ing accoun­ted for just under half of all spend­ing (48 percent). The inde­pend­ent spend­ing in Idaho’s 2nd District reflects the divide between Tea Party and estab­lish­ment Repub­lic­ans, with busi­ness groups spend­ing in favor of the incum­bent Mike Simpson and Tea Party groups support­ing chal­lenger Bryan Smith. Inde­pend­ent expendit­ures accoun­ted for 17 percent of spend­ing in Michigan’s 3rd District, where they all favored Tea Party incum­bent Justin Amash or attacked his oppon­ent. Outside spend­ing comprised approx­im­ately 11 percent of spend­ing in Flor­id­a’s 19th, where the lead­ing candid­ates all had their own candid­ate-specific outside money groups.

Figure 4: Overall Spending - Candidate vs. Outside Spending

However, in recent elec­tion cycles, inde­pend­ent expendit­ures have peaked in the weeks imme­di­ately preced­ing the elec­tion, so for most contests there will likely be more of such spend­ing next quarter, as we get closer to the primary elec­tions them­selves. Since inde­pend­ent expendit­ure filings are more frequent than campaign filings, we were able to analyze outside spend­ing in the begin­ning of the second quarter. In FL-19, where the primary was held on April 22, there was $2 million in outside spend­ing in the three weeks before the elec­tion (this spend­ing is not included in Figure 4, because it came after the end of the first quarter). That was more than five times the amount of inde­pend­ent expendit­ures prior to that point (see Figure 5). 

Figure 5: Florida District 19 - Outside Spending

As noted, the outside spend­ing totals in our analysis count only expendit­ures repor­ted to the FEC. It is possible there have been signi­fic­ant outside expendit­ures in these races on sham issue ads, which stop short of call­ing for a vote for or against a candid­ate. Only express advocacy — mean­ing expli­cit calls to vote for or against a candid­ate — must be repor­ted to the FEC. Sham issue ads, which praise or attack a candid­ate without using the “magic words” of express advocacy, are not repor­ted and so are not coun­ted in our analysis. There­fore, the spend­ing totals cited in this issue brief under­state the actual amount of outside spend­ing thus far in the elec­tion cycle.

For example, the spend­ing total repor­ted here for Michigan’s 3rd District — one of the top races for outside spend­ing — does not include signi­fic­ant spend­ing on at least one issue ad. Elec­tion spend­ing heavy­weight Amer­ic­ans for Prosper­ity put out ads support­ing Tea Party incum­bent Justin Amash. The group announced in Febru­ary that it would spend about $230,000 prais­ing the incum­bent. Because the ads don’t mention votes but only ask view­ers to call Amash and thank him for fight­ing against Obama­care, they were not required to be repor­ted to the FEC. Simil­arly, there were unre­por­ted expendit­ures in ID-02.

Even for spend­ing that is repor­ted, however, there is less than full trans­par­ency. Inde­pend­ent spend­ers have ways of hiding the sources of their money. Nonprofit 501(c) entit­ies, like trade asso­ci­ations and “social welfare” groups, are not required to disclose their donors at all. In the first quarter, the spend­ing of one such group in the Idaho District 2 primary, the U.S. Cham­ber of Commerce, accoun­ted for one-fifth of outside spend­ing across all 16 high-dollar primar­ies (see Figure 6).

PACs and super PACs are required to disclose their donors. Together, they account for about 80 percent of first-quarter outside spend­ing, although as noted, signi­fic­ant outside spend­ing appeared in only a hand­ful of races. However, super PACs have the abil­ity to shield their donors’ iden­tit­ies by accept­ing money from organ­iz­a­tions that do not report their donors. For example, the organ­izers of a super PAC may also create an affil­i­ated nonprofit organ­iz­a­tion. The group then soli­cits secret dona­tions to the nonprofit, and the nonprofit makes a dona­tion to the super PAC. On its FEC reports, the super PAC lists only the name of the nonprofit, not the ulti­mate source of the money. To capture this, Figure 6 breaks out super PACs that only partially disclose their donors accord­ing to the Center for Respons­ive Polit­ics; these partial disclosers account for over one-quarter of outside spend­ing through March. Adding in the dark money groups that disclose none of their donors shows that the spend­ing for which there is inad­equate disclos­ure accounts for 45 percent of inde­pend­ent expendit­ures.

Figure 6: Outside Spending by Source

Finally, the phenomenon of single-candid­ate super PACs, where an organ­iz­a­tion devotes all of its outside spend­ing to support­ing one candid­ate or attack­ing his or her oppon­ents, appears in our sample. These single-candid­ate spend­ers, in some cases run by indi­vidu­als with connec­tions to the candid­ate, make a mock­ery of contri­bu­tion limits, as convin­cingly argued by Columbia Law Professor Richard Briffault. After the large role that candid­ate-specific super PACs played in the 2012 pres­id­en­tial elec­tion, there was spec­u­la­tion that the influ­ence of such groups would continue to grow, partic­u­larly in congres­sional contests; our analysis yields evid­ence that this predic­tion may be coming true.

Across all 16 races, 23 percent of outside spend­ing came from single candid­ate groups. However, this is driven entirely by the FL-19 primary, where virtu­ally all the inde­pend­ent expendit­ures came from single-candid­ate groups. In that race, several of the indi­vidu­als who made six-figure contri­bu­tions to candid­ate-specific super PACs also gave the maximum contri­bu­tion to their favored candid­ate’s primary campaign. This phenomenon illus­trates the concern that these groups can be used to circum­vent indi­vidual base limits on contri­bu­tions. In the coming days, we will release a case study of this race that illus­trates the role of candid­ate-specific organ­iz­a­tions in elec­tions.

Conclu­sion

This analysis shows the continu­ing impact of Citizens United v. FEC and other import­ant Supreme Court campaign finance decisions on polit­ical spend­ing in Congres­sional races, from the way wealthy indi­vidu­als use their own money to support their candid­a­cies to the abil­ity of donors to circum­vent contri­bu­tion limits through single-candid­ate super PACs.

The role of big money in Amer­ican polit­ics contin­ues to evolve. This month, the Supreme Court changed the rules again with its decision in McCutcheon. The case will undoubtedly have an impact on how much money candid­ates raise and where they raise it from. Some have spec­u­lated that the decision will allow more money to flow to the parties and may begin to dry up outside spend­ing. Chief Justice John Roberts was optim­istic that ending aggreg­ate limits will not make the base contri­bu­tion limits mean­ing­less by allow­ing donors to circum­vent them through trans­fers among commit­tees. Next quarter’s campaign finance filings will likely begin to answer ques­tions about the effects of the decision. The amount and import­ance of trans­fers between candid­ates, joint fundrais­ing commit­tees, and lead­er­ship PACs after McCutcheon will be focuses of our future empir­ical invest­ig­a­tion. Neither consti­tu­tional inter­pret­a­tion nor policy plans should be drawn up in a vacuum, lack­ing the bene­fit of evid­ence about how the fund­ing of elec­tions actu­ally works.

Through­out the 2014 elec­tion cycle, the Bren­nan Center will continue to exam­ine the ways that money influ­ences polit­ics to inform decisions about how to make demo­cracy work for all of us.


Appendix

The follow­ing charts high­light spend­ing patterns in the eight Repub­lican primar­ies with Tea Party candid­ates. Tea Party candid­ates are denoted by a “TP” follow­ing a candid­ate’s name, and incum­bents are denoted by an aster­isk.

AL-06: Candidate Dollars by Source

 

CA-52: Candidate Dollars by Source

 

FL-19: Candidate Dollars by Source

 

ID-02: Candidate Dollars by Source

 

MI-3: Candidate Dollars by Source

 

MI-11: Candidate Dollars by Source

 

NJ-03: Candidate Dollars by Source

 

PA-09: Candidate Dollars by Source


[1] This analysis is specific to the House primar­ies included on the Sunlight Found­a­tion’s list of compet­it­ive primar­ies, avail­able here. We confirmed our analysis by check­ing data from the Center for Respons­ive Polit­ics. The Bren­nan Center has iden­ti­fied at least two races with “viable” candid­ate funds exceed­ing $2 million that were not on Sunlight’s list: CA-33 and VA-08. These races, respect­ively, had 6 and 8 candid­ates in the primary contests in ques­tion.  

[2] In AL-06, Chad Mathis has secured Tea Party endorse­ments and outside spend­ing. In CA-52, Kirk Jorgensen has been connec­ted with the Tea Party and picked up PAC support from a Tea Party group. In FL-19, Curt Clawson was considered the Tea Party candid­ate. In ID-02, Bryan Smith is mount­ing a Tea Party chal­lenge to an estab­lish­ment incum­bent. In MI-03, Tea Party incum­bent Justin Amash has picked up an estab­lish­ment chal­lenger. In MI-11, another Tea Party incum­bent, Kerry Bentivolio, is facing a busi­ness-friendly chal­lenger. In NJ-03, Steve Lonegan is the Tea Party favor­ite. In PA-09, Art Halvor­son is making a Tea Party-backed run against a well-estab­lished incum­bent.

[3] The four primar­ies included in these aver­ages are: AL-06, ID-02, MI-03 and PA-09.