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Obama Campaign Copies Gingrich -- Decries Then Embraces Super-PACs

The 2012 money race is on, with both sides looking to secretive groups to fuel their ad wars.

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Political Money Laundering, the 2012 Version

On January 31, the various campaign committees associated with the 2012 presidential race filed their contribution and expenditure reports for the last quarter of 2011. These reports show many things, the first of which is who has given really big money to the various candidate-backed efforts. There’s great reporting on those trends, such as the Sunlight Foundation’s tracking of individual donors and PRWatch’s coverage of how individuals—more than corporations—have been providing the early money, and how political consultants are using different kinds of legal entities to hide contributions and donors' identities like a child’s shell game where a pea is hidden and shuffled on a desktop.

The big picture, if you look back over the past two decades of presidential campaigns, is that in every presidential election a new "legal" vehicle emerges that enables candidates to get bigger and bigger checks. The Supreme Court has helped to create these new vehicles, in ruling after ruling since the mid-1970s – rulings that mostly deregulated campaign finance law under the guise of protecting free speech.

In the late 1980s, the Democrats pioneered the use of what was then called “soft money,” or five- and six-figure contributions to the national political party for TV ads that were just outside the line of what would invoke campaign contribution limits. (The Democratic lawyer who helped create that was Bob Bauer, who was Obama’s campaign attorney in 2008, and presumably was among those advising candidate Obama to reject presidential public financing.) No effective campaign finance loophole goes unnoticed in Washington, and the GOP copied the Democrat’s soft-money regime. That, in part, led to the McCain-Feingold campaign reform law in 2002, which imposed broadcast advertising rules that the Supreme Court threw out in its Citizens United ruling in 2010.

So now, in 2012, it is the Democrats—led by the Obama re-election campaign—who are copying the Republicans' tactics. And even though super-PACs have been the largest recipient thus far of big individual checks—not direct donations from corporations as many progressive activists have feared—they may not even be where the big and most secretive political money will flow in 2012.

It appears that a form of non-profit called a 501c4, named after that part of the federal tax code, will become this year’s other political money-laundering vehicle of choice, because even though c4 rules impose some boundaries on direct advocacy of federal candidates (as opposed to raising issues associated with those same candidates), the c4s are not required to disclose donors. Indeed, in 2011 Karl Rove’s c4 organization, American Crossroads GPS, raised $32.6 million compared to $18.4 for its super-PAC.

“I think c4 spending will go up and I think we will see a lot more of it,” Allison said. “It is preparing the battlefield. They are going to try to create the truths, on the left and on the right, about what’s wrong with the opposition party. And what’s wrong with the candidates.”

On Tuesday, many progressive organizations, such as People for the American Way and Public Citizen lauded the president’s support for a constitutional amendment to give the authority to Congress to regulate campaign spending. But people who have worked on money and politics issues for years are more than exasperated.

“We are now in the midst of a Citizens United-induced democracy death spiral,” said Public Citizen president Robert Weissman, blogging about Obama’s announcement.

He praised the president for supporting a constitutional amendment to allow Congress to regulate campaign donations. But like everybody who has watched these issues closely knows very well, the president once again is saying something positive about that which he has no control over. Congress proposes and states ratify constitutional amendments. Presidents cannot veto constitutional amendments.

 
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