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

August 4, 2015

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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Introduction

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.