Dollarocracy (11 page)

When the outsized players in national politics wade into state and local politics, it is no longer possible, let alone appropriate, to see contests for state senate seats in Ohio or school board posts in Milwaukee as footnotes to stories about campaign spending. Those races need to be seen as part of a whole. A big part. There are now networks of wealthy donors who, freed from much of the oversight provided by the campaign-finance laws that the U.S. Supreme Court has scrapped, pour money into state and local races, writing checks to gubernatorial and mayoral candidates every bit as furiously as they do to presidential contenders.

The 2012 election season in the states began with historic recall elections in Wisconsin, where Governor Scott Walker and his state senate allies were targeted for removal from office by labor and progressive groups infuriated by the governor's assault on collective bargaining rights and his implementation of a Greek- or Spanish-style austerity program of deep cuts to public service and education funding, combined with de rigueur rounds of additional tax cuts for millionaires, billionaires, and corporations. Walker did not mount a traditional fight back, with appeals to Wisconsin's conservative contributors. He “went national,” jetting around the country for meetings with the same right-wing donors who funded presidential and congressional races: folks like Texas homebuilder Bob Perry, who drew national attention in 2004 when he wrote $4.45 million in checks to fund the Swift Boat attack campaign against Democratic presidential nominee John Kerry. Perry, who gave $7 million to help Karl Rove get his American Crossroads combine started in
2010 (and another $6.5 million to keep it going in 2012), wrote a $250,000 check to support Walker as the recall fight got started. A few weeks later, he chipped in another $250,000. And at $500,000, Perry was not even Walker's biggest donor. Or all that uncommon. Thirty-seven individuals, the vast majority of them from outside Wisconsin, each gave the embattled governor contributions of more than $50,000.
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Walker took advantage of a loophole in Wisconsin election law that created precisely the sort of no-holds-barred campaign circumstance proposed by Mitt Romney and other defenders of the Supreme Court's rulings in cases such as
Citizens United
. As the Wisconsin Democracy Campaign explained, “Walker drew massive contributions above the usual $10,000 calendar year limit on individual donations because state law allows recall targets to collect unlimited cash to pay bills that come in before a recall election is approved.”
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Before the June 2012 vote, Walker's personal campaign committee raised and spent $36.1 million—three times the largest amount ever previously spent on a gubernatorial candidate in the state and more than had ever been spent by all the candidates in any previous gubernatorial campaign. According to the Wisconsin Democracy Campaign's study of the spending, “Nearly $22 million or 64 percent of the individual contributions he raised since January 2011 and spent mostly on the recall came from out-of-state banking, manufacturing, construction, real estate and other powerful special interests hailing from Florida, Texas, New York, Missouri, Nevada, Wyoming and New Jersey, among other states.” But that was only the first wave of the national money that flowed into the state. Another $22.6 million was spent on Walker's behalf by party organizations and so-called independent groups that backed him, bringing the total spending on the governor's behalf to $58.7 million.
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In contrast, the campaign of Walker's Democratic challenger, Mayor Tom Barrett of Milwaukee, spent $6.6 million, while party organizations and independent groups that explicitly backed Barrett spent in the range of $10 million.
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Walker's money advantage was always dramatic, and it was especially large in the early stages when the direction of the fight was defined. No serious observer doubted that Walker's money, most of it from out of state, made it possible for the controversial governor to prevail with 53 percent of the vote in June 5. But for our purposes here, let's add the Walker and Barrett spending, as well as the spending for the post of lieutenant governor and for four
Wisconsin state senate races that played out on the same date. What do we get? A cool $93.5 million.
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And that's one state. By the end of 2012, other states with closely contested gubernatorial races had seen similarly dramatic spending: roughly $50 million in Washington State, roughly $30 million in Missouri, roughly $25 million in North Carolina, and roughly $25 million in tiny New Hampshire.
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In a dozen states during the course of 2012, the candidates alone spent more than $200 million on gubernatorial races.
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Moreover, independent groups often equaled or exceeded candidate spending. Clearly partisan organizations such as the Republican Governors Association (RGA) consistently top the lists of
federal
super-PAC donors. How? “The Republican Governors Association's appearance on a list of top donors to super PACs—which were formed to spend money on federal races—at first glance appears to be a mistake. But a close look at the Washington, D.C.–based 527 organization's disclosure filings shows it is using super PACs to funnel funds into state races,” explained a Center for Public Integrity examination of how the group operates. “The recipient of the RGA's generosity is a super PAC called ‘RGA Right Direction PAC.' The super-PAC takes the money it receives from the RGA—which as a 527 can accept unlimited funds from corporations and wealthy individuals—and spends it on state races.” Via the RGA in 2012, million-dollar corporate donations flowed on a regular basis to gubernatorial candidates in states that were still trying to maintain some limits on the size of donations and on corporate dominance of their elections. Similarly, groups such as the Republican Lieutenant Governors Association, the Republican Attorneys General Association, the Republican Secretaries of State Association, the Republican Legislative Campaign Committee, and the Republican State Leadership Committee (RSLC) joined the RGA in moving tens of millions of dollars from corporations and wealthy individuals into state contests.

Indeed, these groups bragged about the money they moved into the states. After the Republican State Leadership Committee celebrated the fact that it had raised almost $40 million for the 2012 election cycle,
Politico
explained in late October:

           
RSLC's political spending has increased 36 percent over last cycle—even more than the group's overall fundraising.

                
RSLC is among the Republican independent groups that have risen in prominence in an age of looser campaign finance rules and Democratic control of the White House. Along with its Democratic counterpart, the Democratic Legislative Campaign Committee, and the Republican and Democratic Governors Associations, RSLC has channeled new levels of national money into state campaigns.

                
Matt Walter, the RSLC's political director, predicted the heavy national investment in state races would continue past 2012 and “heading into 2014, when the focus returns much more significantly to the state level.”

                
“I think people have bought into that in part because of the lack of action in Washington, at the federal level, but there is also an increased interest and polarization, in general, in the political process,” Walter said. “It's difficult to see that trajectory changing.”
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In our discussions with dozens of candidates, party operatives, and consultants working at the state and local levels, the consistent response was that these are the real “growth” areas for campaign spending in the
Citizens United
era. Corporations and wealthy individuals seeking to influence policy can be talked into writing checks for state races. And not just the high-profile gubernatorial contests. Democratic state attorneys general—notably but not exclusively New York attorneys general Eliot Spitzer and Eric Schneiderman—have been in the forefront of fights to hold Wall Street traders, credit card companies, polluters, agribusiness giants, and gun manufacturers to account.
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So it should not come as much of a surprise that the Republican Attorneys General Association has been collecting big-dollar donations from corporations such as Aetna U.S. Healthcare, Brown & Williamson, Microsoft Corporation, SBC Communications Inc., and, of course, the National Rifle Association. Indeed, as the
Washington Post
revealed after a study of internal fund-raising documents, Republican state attorneys general have engaged in the solicitation of contributions from corporations and trade groups that have been the subject of lawsuits and regulations by their states.
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After the 2012 election, the Republican state-based groups declared, “In West Virginia, we unseated a five-term incumbent Attorney General.”
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Darrell McGraw, a Democrat who over five terms in office had “consistently drawn the ire of industry groups for his office's consumer protection litigation,”
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did indeed lose by a 51–49 margin to Republican Patrick Morrisey. A lawyer with a politically connected Washington, DC, law firm, Morrisey bragged during the campaign that he had assisted states challenging the federal Affordable
Care Act (Obamacare) and that he “continues to counsel Members of Congress on strategies to repeal the law.” But he obtained his license to practice law in West Virginian only four days before he filed papers to seek the state's chief law-enforcement position.
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Morrisey's candidacy would have been absurd by traditional measures of credible candidates in West Virginia. But he had an advantage: virtually unlimited—and unaccountable—outside money. More money from outside the state poured into Morrisey's race for attorney general than into races for governor or potentially competitive congressional seats.
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One group alone, the Virginia-based Center for Individual Freedom, poured at least $1.6 million into anti-McGraw television ads that aired before the election. As the
Charleston Daily Mail
noted, “The Center got its start as a front group for the tobacco lobby and now funds conservative candidates and causes. It does not report its donors, though former Bush political operative Karl Rove's political action committee has given money to the Center, according to spending information made public by Rove's Crossroads GPS.”
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Another group, the Des Moines, Iowa–based American Future Fund, spent almost $600,000 in ads that benefited Morrisey.
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The organization, which registers with the IRS under laws governing charitable institutions as a nonprofit, runs something called the “AG Project” for the purpose of “bringing attention to the important constitutional issues facing our state and federal courts, as well as identifying and supporting those candidates for states attorney general who defend the constitutional principles that founded our nation.”
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Left unmentioned was the project's essential purpose: the movement of huge amounts of money into the states for the purpose of electing law-enforcement officials who would take their cues from corporate special interests and national conservatives rather than from their constituents.

In addition to the West Virginia race, the American Future Fund made itself a big player in Missouri, where the group bought $250,000 in advertising to attack the state's Democratic attorney general, Chris Koster. A former Republican who was rated “100 percent pro-gun” by the National Rifle Association, Koster was no liberal. But he was targeted all the same, and in a common reaction, Koster ramped up his fund-raising to more than $5 million. It was part of a spending spree on down-ballot races in Missouri, where initial reports on formal spending by the committees of candidates for state posts totaled more than $65 million.
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Add on the known interventions by outside groups, and the spending pushed well past $70 million, roughly the combined amount
spent by the campaigns of Republican presidential candidates Rick Santorum, Newt Gingrich, and Ron Paul on their races for the party's 2012 nomination.
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The pattern was the same in state after state, where spending records were met and exceeded by candidates, party organizations, and independent groups. Many of them were funded by national donors who did not even know where their money was going or whom it was being spent for or against. In California, there were no statewide contests, just races for the legislature. But the fund-raising by candidates for the state Assembly and Senate still topped $102 million, with at least $23 million spent by outsiders.
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So that's, very conservatively, $125 million for California legislative races. In Texas, legislative candidates raised $93 million. In Florida, it was $60 million. Just the formal fund-raising by state legislative candidates and their committees, according to the National Institute on Money in State Politics, totaled $800 million.
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Couple that figure with the independent expenditures of outside groups playing on issues ranging from abortion rights to farm policy to labor rights and, above all, privatization of education, and there is little question that the money flowing in and around the contests for the 7,382 state legislative seats that were chosen in 2012 exceeded $1 billion. Even the most conservative estimates of candidate and party spending on gubernatorial and down-ballot statewide races exceed $300 million. Add on outside spending and the state-based equivalents of dark money in those contests and legislative races, and the overall figure for state races surpasses $1.4 billion. With federal spending, transparent and dark, that takes us to around $8.5 billion.