First the cause:
Court decision opens floodgates for corporate cash
By: Kenneth P. Vogel
January 21, 2010 10:25 AM EST
The Supreme Court on Thursday opened wide new avenues for big-moneyed interests to pour money into politics in a decision that could have a major influence on the 2010 midterm elections and President Barack Obama’s 2012 reelection campaign.
The long-awaited 5-4 decision overruled all or parts of two prior rulings by the court that allowed governments to restrict corporations and unions from spending their general funds on ads expressly urging a candidate’s election or defeat. But the decision upheld disclosure requirements for groups like the one that brought the case.
The decision, handed down in a special session of the court, is generally expected to boost Republicans more than Democrats, because corporations and corporate-backed outside groups tend to align with conservatives and also often have access to more money than unions or liberal outside groups.
“No sufficient governmental interest justifies limits on the political speech of nonprofit or for-profit corporation,” Justice Anthony Kennedy wrote for the majority.
In a stinging dissent, Justice John Paul Stevens wrote that the ruling “threatens to undermine the integrity of elected institutions across the nation. The path it has taken to reach its outcome will, I fear, do damage to this institution.”
President Obama led a chorus of Democrats and public interest groups attacking the decision, saying in a statement that the court “has given a green light to a new stampede of special interest money in our politics,” and vowing that he will work with congressional leaders “to develop a forceful response.”
“It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans,” the president said. “This ruling gives the special interests and their lobbyists even more power in Washington—while undermining the influence of average Americans who make small contributions to support their preferred candidates."
The case stems from a lawsuit against the Federal Election Commission brought by an obscure conservative group called Citizens United. It alleged that its free speech rights were violated when the FEC moved to block it from using corporate cash to promote and air "Hillary: The Movie," a feature-length movie harshly critical of then-Sen. Hillary Clinton – the current secretary of state – during her 2008 campaign for the Democratic presidential nomination.
The FEC asserted that the movie expressly opposed Clinton’s election and therefore was subject to campaign laws that bar the use of corporate cash to air election ads, and require donor disclosure. Citizens United disagreed and sued.
Lower courts sided with the FEC, and the Supreme Court first heard the case in March. But in June, instead of coming back with a ruling, Chief Justice John Roberts asked the parties to return for a rare re-argument of the case — with a much broader focus.
Instead of merely arguing whether federal election laws should have applied to “Hillary: The Movie,” Roberts asked the parties to argue whether the court should reverse rulings in two prior cases upholding the government’s ability to limit corporate and union election spending.
The court divided along ideological lines on the decision with Justice Anthony Kennedy casting the deciding vote and writing the majority opinion. He was joined by Roberts and fellow conservative justices Samuel Alito and Antonin Scalia.
Another conservative justice, Clarence Thomas, filed a separate opinion that mostly concurred with the majority, but made the case for going even further by striking down disclosure requirements.
The dissent was written by Justice John Paul Stevens, who was joined by liberal justices Ruth Bader Ginsburg, Stephen Breyer and Sonia Sotomayor.
The decision reverses a 1990 ruling by the court that allowed the government to bar corporations and unions from spending general treasury funds on ads expressly urging a candidate’s election or defeat. And it overruled part of a 2003 decision that upheld restrictions on independent corporate expenditures enacted the preceding year in the seminal campaign finance overhaul act known as McCain-Feingold.
Fred Wertheimer, a longtime advocate of McCain-Feingold, called today’s ruling “the most radical and destructive campaign finance decision in Supreme Court history” and said the court’s majority had “abandoned longstanding judicial principles, judicial precedents and judicial restraint.”
The authors of the law, Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wis.), expressed disappointment in the ruling, with Feingold calling it “a terrible mistake.”
The decision is expected to boost Republicans and offset the campaign cash advantage enjoyed last year by Obama’s fundraising juggernaut, as well as the financial edge Democrats had enjoy heading into November.
Though it’s unclear which groups will take advantage of the spending flexibility created by the decision, many corporations and corporate-backed groups have signaled their opposition to initiatives pushed by Obama and the Democratic congress.
For instance, the U.S. Chamber of Commerce, which spent $36 million on ads and get-out-the-vote activities in 2008, pledged this week to organize the largest, most aggressive election campaign in its history targeting congressional Democrats who support Obama administration proposals to overhaul health insurance and the financial system and limit carbon emissions.
The Chamber, as well as the GOP-aligned National Rifle Association, filed briefs in the case supporting the conservative non-profit group challenging the rules, though so did the American Federation of Labor and Congress of Industrial Organizations, or AFL-CIO.
The Democratic National Committee, however, in a brief filed by then-DNC general counsel Bob Bauer, who has since gone to work at the White House, argued in favor of keeping the rules, asserting that opening the door to more corporate spending in elections would discourage the types of small donors he contends helped power Obama to victory in 2008.
The ruling, which had been expected months ago, will force campaign operatives, lawmakers, campaign finance advocacy groups and regulators to quickly assess the new campaign spending landscape heading into the midterms. They don’t have much time to adapt — or try to tighten — the new loopholes, because some states have congressional primaries as early as February and March.
Lawyers for all manner of corporations, unions, outside political groups and parties immediately began poring over the decision to determine how their clients could best take advantage of the increased flexibility it afforded them.
Additionally, the FEC will have to decide whether it will be necessary to write new rules or guidance explaining what regulated groups need to do to remain compliant under the new ground rules. After the last major Supreme Court campaign finance decision, a 2007 ruling that expanded the types of ads that corporations and unions could fund in the run-up to Election Day, it took the FEC about five months to write new rules.
Advocacy groups that support stricter campaign finance regulations cited the decision as an added reason to push for new reforms, including a bill that would provide taxpayer money for congressional campaigns.
“We need to change the way America pays for elections,” said Bob Edgar, president of the nonprofit government watchdog group Common Cause. His group supports a public funding bill introduced by Sen. Dick Durbin (D-Ill.) and Rep. John Larson (D-Conn.). “Congress must free itself from Wall Street's grip so Main Street can finally get a fair shake," he said.
Rep. Chris Van Hollen (D-Md.) and Sen. Chuck Schumer (D-N.Y.), said Democrats also would work to push through legislation to try and reverse the decision in time for the 2010 midterm elections, though they said it wasn’t clear what shape the legislation would take.
One option could be requiring shareholders to vote before a corporation could give money directly to a candidate, said Schumer.
Van Hollen called the decision “radical” and said it proved the conservative majority did not respect precedent, contrary to assertions made in recent years by Roberts and Alito during their confirmation hearings.
Meanwhile, the decision brought praise from many Republicans, as well groups that view campaign finance rules as infringements on free speech.
Rep. Mike Pence (R-Ind.) said the ruling “takes us one step closer to the Founding Fathers’ vision of free speech, a vision that is cherished by all Americans and one Congress has a responsibility to protect.”
“This is a great day for the American people and free speech,” said Cleta Mitchell, a top Republican election lawyer. She said that through the decision the court “has ripped the duct tape off the mouths of the American people.”
AND NOW THE EFFECT:
3 billionaires who'll drag out the race
By: Kenneth P. Vogel
January 12, 2012 04:42 AM EST
Meet the three billionaires who could drag out the GOP presidential primary, bloody up front-runner Mitt Romney and weaken the odds of defeating President Barack Obama: Sheldon Adelson, Foster Friess and Jon Huntsman, Sr.
The three men are contributing millions of dollars to a trio of outside groups flooding the airwaves in early voting states with brutal ads attacking Romney and ads backing the candidates they would prefer to win the Republican nomination.
Adelson, a Las Vegas casino mogul, has written a $5 million check — and has considered giving much more — to a so-called super PAC backing Newt Gingrich’s presidential campaign.
Huntsman, Sr., who made his fortune at the helm of an eponymous chemical and manufacturing company, reportedly has invested millions in a super PAC supporting the presidential bid of his son, former Utah Gov. Jon Huntsman, Jr.
And Friess, a Wyoming mutual fund master, acknowledged to POLITICO that he is a major financial backer of a super PAC supporting Rick Santorum called the Red, White and Blue Fund and is preparing to give more, but declined to say how much he has given or plans to give.
Operatives say that without the super PAC air cover funded by these deep-pocketed political patrons and their associates, their favored candidates would have a tough time keeping their bare-bones campaigns going as long as they have — let alone beyond the next couple of contests in South Carolina and Florida.
The prospect that these candidates could carry on is a testament to the new world of campaign money ushered in by a pair of federal court rulings in 2010: A single wealthy donor can now prop up a presidential campaign with unlimited cash, even if the candidate is getting little traction with voters.
“I guess if Newt’s got $5 million, it makes sense that Rick [Santorum] should have a little bit,” said Friess, who has known Santorum since the 1990s and shares his conservative views on social and foreign policy issues. He became among the first major donors to the Red, White and Blue Fund because, he said, “I believe that Rick Santorum is the most electable candidate. And I’m just thrilled to be able to have played a role so far.”
Friess did not shy away from the characterization that the $537,000 spent by the Red, White and Blue Fund in Iowa — which dwarfed the $22,000 spent by Santorum’s campaign on ads in the state — helped propel Santorum to a close second to Romney in the state’s caucuses. But Friess laughed off a story on the liberal Daily Kos headlined “Meet Foster Friess, Billionaire Who Bought Iowa for Santorum.”
“I told my wife ‘Wow, I got a bargain,’” he said, noting that the super PACs and campaigns supporting Romney, a former Massachusetts governor, and Texas Gov. Rick Perry spent far more and asserting that such a headline “completely discounts that Rick Santorum went to 381 town halls” in the run-up to the caucuses.
Friess conceded that Santorum lacks a big donor network that can compete with “the cadre of pals like Perry or Romney” has, who have filled the coffers of super PACs backing their respective campaigns.
The propping up of super PACs by Adelson, Friess and Huntsman, Sr., has some establishment Republicans grumbling privately that the men may be hurting the party by setting the stage for a long and damaging primary battle that won’t block Romney from winning the nomination but will leave him limping into a general election tilt.
In fact, Obama’s allies have at times seemed to be working in tandem with Romney’s Republican foes, particularly the pro-Gingrich super PAC backed by Adelson, which is called Winning Our Future. It’s spending millions of dollars in South Carolina airing hard-hitting ads derived from a half-hour documentary that depicts Romney as a cold-hearted vulture for his days heading an investment firm called Bain Capital.
Adelson hasn’t seen the documentary or the ads, said a spokesman, who declined to comment Wednesday on the hand-wringing by Republicans worried about the impact of his super PAC giving.
But last month, when he was talking with operatives about opening his checkbook wide to Winning Our Future, Adelson told POLITICO that his political efforts were motivated by his support for Gingrich, rather than antipathy toward any other candidate.
“I’m a guy who practices loyalty,” said Adelson, a 78-year-old worth upward of $20 billion, who’s been friendly with Gingrich since the mid-1990s, when the former Georgia congressman was speaker of the House. They’ve bonded over a shared enmity for labor unions and support for Israel, and Adelson was the biggest donor — giving $7.7 million — to Gingrich’s main political vehicle over the past few years, the now-defunct fundraising juggernaut American Solutions for Winning the Future.
“I wouldn’t step away from Gingrich because I think another candidate is the best. I think that Gingrich is the best candidate and he’ll make the best president,” Adelson said in a telephone interview. “That doesn’t mean that the other guys would make lousy presidents, OK? But on a scale of one to 10, I got to make a priority of who I think will make the best president.” If Gingrich doesn’t win the nomination, Adelson said, “I would certainly support the Republican candidate. The idea is to avoid another four years of Obama, because this won’t be the same country.”
While Adelson described himself as “the kind of guy that would prefer to stay under the radar,” both Friess and the elder Huntsman have taken more public roles in the campaigns of their beneficiaries.
Friess campaigned with Santorum in the days before the Iowa caucuses, speaking on behalf of the former Pennsylvania senator at a local event, then scoring a prime spot on stage behind the candidate during his triumphant speech after his second-place caucus finish.
A longtime donor to social conservative causes dear to Santorum, Friess and his wife Lynn, both 71, built a $15.7 billion investment management firm. He told POLITICO that he is putting together a challenge grant to encourage other wealthy donors to give to the Red, White and Blue Fund, which he said received a $1 million check Wednesday.
The group intends to announce Thursday that it has bought $600,000 more in ad time in South Carolina, bringing its total buy to about $800,000 in the state, which is considered fertile ground for Santorum’s socially conservative message. The ads — combined with a Santorum campaign buy in the Palmetto State fueled by a post-Iowa fundraising surge — offer a distinctly different feel for a campaign that has scraped to get by.
The Red, White and Blue Fund’s ads have been positive, pro-Santorum messages to date, and, though Friess conceded “negative ads are more impactful five to one,” he said he’s told the operatives running the super PAC that “any money that I’m connected to, I want the ads to be dignified, and I want them to be honest. I’m fine with contrast ads, but I’m very, very adverse to some of the ads that I think are destructive.”
Suggesting he was uncomfortable with Winning Our Future’s attacks on Romney, he praised Santorum for being “the only competitor who didn’t jump on that bandwagon to stomp on Romney.”
Jon Huntsman, Sr., has been a presence throughout the campaign of his son, and they appeared most recently together on stage at a Manchester, N.H., restaurant during a Tuesday night party celebrating the son’s third-place finish in the Granite State.
Our Destiny PAC, the super PAC supporting Huntsman, aired more than $2 million worth of ads in New Hampshire supporting Huntsman and ripping Romney. And while Huntsman has declared himself “mighty thankful” for the “air cover,” he also has said he and his father do not discuss Our Destiny or campaign strategy — communications prohibited under election rules barring coordination between campaigns and super PACs.
The elder Huntsman “communicates daily with his son” and “continue[s] to be a major contributor” to Our Destiny, said Fred Davis, a veteran GOP adman who is a key adviser to the super PAC.
But the father has “no official role” and “no unofficial role” with the super PAC, Davis said, adding that neither Huntsman, Sr., nor any of the other donors have any input in the PAC’s decisions.
“Only the board [has],” he said. The donors are told only “that they are helping the candidacy of Jon Huntsman. They trust the organization and professionals to spend the money wisely,” Davis said.
But Romney allies and others in the conservative establishment in recent days have suggested that the super PACs supporting Huntsman and Gingrich could be vulnerable to Federal Election Commission complaints alleging violations of the coordination rules.
Friess called the FEC rules “goofy government regulations” but said he’s not worried about being targeted by a coordination complaint, explaining he neither knows “what the [Santorum] campaign is doing” nor tells Santorum “what I’m doing or what I’m thinking” about the super PAC. Nor is he worried about scrutiny from Santorum opponents, he said, proclaiming “so far, I’m getting a big kick out of” the attention brought by his donations to the pro-Santorum super PAC.
But Adelson’s camp seemed less amused when asked about recent comments by a top Romney surrogate, former New Hampshire Gov. John Sununu, who seemed to signal the possibility of retribution from Romney supporters.
“Does he think people don’t remember when you attack them and pay for the attacks in the primary? Especially when one of the parties receiving that attack is the same investment community that he likes to go to to finance his expansions,” Sununu railed on Fox News. “There’s just no common sense in this process, and you kind of feel sorry for people that aren’t that bright.”
While Adelson spokesman Ron Reese said his boss is “no more concerned about” heightened scrutiny resulting from his super PAC donations “than he is about having his iced tea in the afternoon,” he did take a swipe at Sununu.
“Mr. Adelson is one of the world’s leading entrepreneurs and has risen from humble beginnings to become one of the wealthiest people on the planet,” said Reese, “so apparently there’s still some hope for the ‘not so bright’.”