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

Election '16

On Monday night, Jim Messina, Barack Obama’s 2012 campaign manager, threw in the towel for a candidate who only two years ago faced the U.S. Supreme Court during his State of the Union and criticized its Citizens United ruling expanding independent spending in federal elections.

Messina blogged that his team would do exactly what Newt Gingrich's did after Iowa’s caucuses. He decried the newest legal entity used to launder big money in the 2012 campaign, the super-PAC, which Citizens United helped to create, and then announced that Obama had no choice but to respond in kind.

Of course, campaign nanager Messina did not quite put it that way. Instead, he said Obama was a good guy, believed in campaign finance reforms like disclosing donations and even amending the U.S. Constitution to give Congress authority to limit spending, and he whacked the Citizens United ruling. But then, using the same mutually assured destruction logic that Richard Nixon and other arms race-embracing cold warriors held above American heads for decades, Messina said Obama had to match the GOP’s stealthy tactics step by step, including super-PACs.

“We can't allow for two sets of rules in this election whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm,” he said. “Our campaign has to face the reality of the law as it currently stands.”

If you want to understand how campaign money shapes the national political culture and why federal lawmakers are so reluctant to change the system that gave them power, don’t look at what they and their campaign managers say about reform: look at what they do about raising campaign money.

“When you think about the history of big money in politics, the Democrats and Republicans trade innovations with each other,” said Bill Allison, who oversees the Sunlight Foundation’s Reporting Group. “The reason Obama is blessing the super-PAC is he’s worried about money.”

Messina’s post was filled with pragmatic justifications. Nearly 98 percent of the Obama campaign’s donations were $250 or less. Not so with Mitt Romney’s 2011 fourth quarter donations, according to their FEC reports, showing 9 percent were under $200. On the Republican side of the aisle, the super-PACs behind various candidates and the even more secretive non-profits (like Karl Rove’s American Crossroads GPS) had raised nearly $50 million, and much of that in six- and seven-figure increments.

So now the ever-reluctant president, according to Messina, would send top administration officials to their super-PAC fundraising events, including cabinet members, where very wealthy people will be asked to write some very big checks to super-PACs help re-elect Obama.

“What this change means practically: Senior campaign officials as well as some White House and Cabinet officials will attend and speak at Priorities USA fundraising events,” Messina said. “While campaign officials may be appearing at events to amplify our message, these folks won't be soliciting contributions for Priorities USA. I should also note that the president, vice-president, and first lady will not be a part of this effort; their political activity will remain focused on the president's campaign.”

Messina’s blog-post is a big deal. It shows, once again, that regardless of political party, political promises, and reformist hopes by one’s supporters, that unless candidates do everything to win—and that starts with raising as much money as they can or having supporters do it in secretive ways for them— nothing else matters. Indeed, in 2008, it was Obama who had the upper hand in fundraising and became the first presidential candidate ever to reject public funds, as they would be less than what he was able to raise from donors.

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.

What Obama could do as president is issue an executive order requiring federal contractors, which include some of the biggest corporations in America, to disclose political donations in federal campaigns. And he might even have the IRS take a closer look at a pending application from Rove’s 501c4—Crossroads GPS—concerning its non-profit status. The Washington Post reported this week that it is operating as a non-profit without a federal license to do so, including buying millions of dollars in anti-Obama TV ads.

As candidate Obama, he could do something else. In 2008, it was Obama who had the big money momentum behind him, raising millions from small donors because he genuinely excited ordinary people with his candidacy. He could recall what excited people so much and campaign as a populist.

But now he will do what most politicians do after decrying tactics they later embrace. He will hope that raising big money from a selected few will ensure his re-election. And the progressive political reform community will hold its breath, hoping that if he is re-elected, he will finally get behind some meaningful reform. 

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