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Shadow Campaigns: The Shift in Presidential Campaign Funding to Outside Groups

Outside groups set up to bene­fit specific candid­ates have raised twice as much as the candid­ates them­selves so far in the 2016 pres­id­en­tial race — and groups repor­ted to have close ties to a candid­ate account for 96 percent of total outside fundrais­ing. This connec­tion to the candid­ates is crucial to the fundrais­ing success of the highest-perform­ing outside groups. In the past, groups and candid­ates were more reluct­ant to expli­citly tie them­selves together. But this cycle, shadow campaigns seem more brazen than ever about tele­graph­ing their connec­tions to candid­ates — and big donors are reward­ing those groups that have close ties.

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Fundrais­ing in the 2016 pres­id­en­tial race is unlike anything seen before. Just a few months into the pres­id­en­tial race, ostens­ibly inde­pend­ent groups have raised hundreds of millions of dollars, greatly outpa­cing the candid­ates’ own campaign commit­tees. The vast major­ity of the money raised so far has been collec­ted by outside groups not subject to contri­bu­tion limits. Although these groups are purportedly inde­pend­ent of the campaign, the real­ity is that most of them have ties to the candid­ate. While it is still early in the campaign cycle, these numbers appear to reflect a funda­mental shift in how pres­id­en­tial campaigns are funded in the United States, a consequence of the explo­sion in outside money ignited by the dereg­u­lat­ory Citizens United decision.

Although there has already been some import­ant report­ing on how much lead­ing candid­ates and the groups support­ing them have raised, this analysis is the first to system­at­ic­ally exam­ine the repor­ted links between all the candid­ates and outside groups. This allows us to meas­ure the extent to which finan­cial resources so far this cycle are held by outside groups that have repor­ted ties with the candid­ates they support — we call these groups “shadow campaigns.” We use recently-released FEC data to do this in the aggreg­ate in Part I, as well as for each campaign in Part II.

Across all 21 pres­id­en­tial candid­ates, campaign commit­tees raised $129 million in 2015 while outside groups support­ing partic­u­lar candid­ates raised more than twice as much: $283 million. Almost all of the outside money, $273 million, is going to groups repor­ted to have ties to one partic­u­lar candid­ate. And 95 percent of the outside money, or $270 million — has been collec­ted by groups not subject to contri­bu­tion limits. The numbers raise ques­tions about whether big donors are attempt­ing an end-run around the strict limits on contri­bu­tions to candid­ates’ formal campaign commit­tees. Import­antly, despite the massive sums repor­ted here, we know that our analysis under­es­tim­ates the true extent of fundrais­ing by outside groups, includ­ing those that are not subject to contri­bu­tion limits and may have ties to their favored candid­ate, because “dark money” organ­iz­a­tions have not yet been required to report their revenue.

The advant­age of funds raised through unlim­ited-contri­bu­tion groups is obvi­ous. One wealthy donor can write a check for millions. Campaign commit­tees, on the other hand, are limited to dona­tions of $2,700 for the primary elec­tion. In theory, candid­ates are not permit­ted to “coordin­ate” with groups that can raise unlim­ited funds. But with flawed coordin­a­tion rules that go almost entirely unen­forced, in real­ity the path is open for candid­ates to work closely with, and even exert control over, support­ive outside groups — even to the point of assign­ing close advisers to run them.

To find a preced­ent for the prolif­er­a­tion of groups backed by wealthy donors and dedic­ated to elect­ing a specific candid­ate, it is neces­sary to look back to the pre-Water­gate era, when candid­ates formed many supposedly inde­pend­ent commit­tees, each of which could take a contri­bu­tion up to the limit (effect­ively multiply­ing the cap by the number of commit­tees). The Federal Elec­tion Campaign Act of 1971 put a stop to that prac­tice by limit­ing all candid­ates to a single author­ized commit­tee.

Citizens United admin­istered a shock to the post-Water­gate system whose full effects we are only now begin­ning to see — although Congress and the Federal Elec­tion Commis­sion share the blame due to their fail­ure to effect­ively regu­late outside groups even within the bounds set by the Supreme Court. As a result, as the first set of fundrais­ing totals reflects, donors can now offer finan­cial support to candid­ates far in excess of candid­ate contri­bu­tion limits. The full impact of this trend in the race for 2016 remains to be seen.

Shadow Campaigns: The Shift in Pres­id­en­tial Campaign Fund­ing to Outside Groups