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Court Opened Door to $933 Million in New Election Spending

The Supreme Court’s Citizens United decision unleashed nearly $1 billion in new political spending in the 2012 election, with media outlets and a small number of political consulting firms raking in the bulk of the proceeds.

The Supreme Court’s Citizens United decision unleashed nearly $1 billion in new political spending in the 2012 election, with media outlets and a small number of political consulting firms raking in the bulk of the proceeds.

Spending records released by the Federal Election Commission show that throughout the 2012 election, corporations, unions and individuals that could take advantage of the high court’s ruling were responsible for about $933 million of the estimated $6 billion spent during the contest.

Nearly two-thirds of the new money — about $611 million — went to 10 political consulting firms, according to a Center for Public Integrity analysis. All but one of the top 10 recipients bought advertising in various media markets on behalf of super PACs and nonprofits. Eighty-nine percent of the expenditures made to the top 10 went to spots attacking candidates, the data show.

“For some in the industry, it has been a definite boon,” said Dale Emmons, president of the American Association of Political Consultants. “This election appears to have set a new benchmark on the amount of money that could be spent, because there were no limits on what could be spent.”

The 2010 Citizens United decision and a lower-court ruling allowed unlimited donations to super PACs and nonprofits, independent groups that used the funds primarily to fund ad campaigns.

Media buyers keep only a fraction of the total spending — usually 15 percent, according to Federal Communications Commission records, with the rest going to media outlets.

The winners

The top recipient of independent spending among media buyers was Mentzer Media Services, the Towson, Md.-based media placement firm run by longtime GOP consultant Bruce Mentzer.

Mentzer attracted nearly $204 million from conservative super PACs and other outside groups. In a tough year for Republicans, only 26 percent of the candidates who were supposed to benefit from the ads won their races, according to a Center for Public Integrity analysis.

The firm was the preferred vendor for the pro-Mitt Romney super PAC Restore Our Future, which paid Mentzer nearly $132 million to purchase air time in presidential battleground states.

A Mentzer employee who answered the phone declined to comment on the firm’s involvement in the 2012 election.

Second was Crossroads Media, which was paid about $163 million to buy media time for conservative super PACs and nonprofits in 2012. The firm is run by Michael Dubke, the former president of Americans for Job Security — a pro-Republican nonprofit and one of Crossroads’ top clients.

Waterfront Strategies, which worked for Democratic groups, ranked third, at $81 million.

Democratic-aligned Mundy Katowitz Media, fourth on the list, was the preferred vendor for the pro-Obama super PAC Priorities USA Action, placing more than $57 million in television ads for the group.

American Media & Advocacy Group, a favorite of conservative groups, ranked No. 5 at $27 million.

Target Enterprises — a Los Angeles-based media buyer for conservative super PACs — was paid $17 million, ranking it No. 6. The firm had a dismal success rate, coming in dead last among firms catering to super PACs and nonprofits. Seven percent of its preferred candidates won on Nov. 6.

A woman who answered the phone at Target Enterprises Tuesday said both principals of the company were “mid-flight” and unavailable for comment.

The Center analyzed FEC data compiled by the Sunlight Foundation and the Center for Responsive Politics. The $933 million in spending came from super PACs, nonprofits, and to a lesser extent, “527” organizations that were the favorite independent spending vehicle in past elections.

FEC coordination law a ‘joke’

The Citizens United decision opened a huge new potential market for consultants, but there was a catch. Consultants who work for candidates — but also work for “independent” groups that support those same candidates — have to be careful.

The high court’s decision did not affect the ban on donations to candidates from corporations and unions, nor did it affect contribution limits from individuals. Instead, it focused on spending by independent groups, unaffiliated with candidates.

As long as super PACs act independently of the candidate, there is no danger of corruption, the high court reasoned.

But sometimes the separation between the campaign and the like-minded super PAC or nonprofit can be hard to discern.

Waterfront Strategies, for example, in its FEC filings lists the same address as GMMB — a well-known Democratic media consulting firm and the preferred vendor for President Barack Obama’s 2008 and 2012 campaigns.

Waterfront was the beneficiary of $81 million paid by some of the biggest Democratic outside spending groups — including Majority PAC, a super PAC backing Democrats running for Senate, and the League of Conservation Voters.

The Huffington Post reported that Waterfront is an internal branch of GMMB. It was incorporated in Delaware, and its president is listed as Raelynn Olson, GMMB's managing partner.

Both Waterfront and its parent company, GMMB, worked to elect Democrat Richard Carmona in his unsuccessful bid for Arizona’s open U.S. Senate seat. Majority PAC hired Waterfront to purchase airtime for ads supporting Carmona and attacking his Republican opponent, then-Rep. and now Sen. Jeff Flake. Carmona’s campaign hired GMMB for its ad buys in the same race.

One Majority PAC ad used the same childhood photo of Carmona that was featured in an official Carmona campaign ad.

GMMB did not reply to requests for comment.

Setting up spinoffs is more about “optics” than skirting coordination rules, said Paul S. Ryan, senior counsel for the nonpartisan Campaign Legal Center.

Under current law, as long as a firm assigns each client separate consultants — and those two don’t coordinate their activities — that constitutes a satisfactory firewall, according to Ryan.

“That’s a pretty ridiculous and modest constraint on campaign coordination,” Ryan said.

Texas two-step

American Media & Advocacy, which also has no website, received nearly $27 million to buy media for super PACs and other outside groups.

The organization worked for the Congressional Leadership Fund, a super PAC that paid for ads attacking Pete Gallego, a Democrat who defeated Republican Francisco Canseco in the race for  U.S. House of Representatives in Texas’ 23rd District. The firm also worked for Canseco’s campaign.

Records show that at least one of American Media’s buyers purchased media in the San Antonio market for both the Congressional Leadership Fund and the Canseco campaign.

Records show that American Media shares an Alexandria address with the high-profile, bipartisan consulting group Purple Strategies. Purple Strategies failed to respond to the Center’s repeated inquiries about any affiliation that it might have with American Media & Advocacy Group.

American Media and Advocacy is “well aware of the FEC coordination rules, including the common vendor rules,” said Jim Kahl, the group’s attorney, “and they have procedures in place to comply with them.”

In Ohio, American Media & Advocacy Group was paid by the Congressional Leadership Fund to purchase ads slamming Democrat Betty Sutton in the House race for District 16. American Media was also working for Sutton’s Republican opponent, Rep. Jim Renacci.

The same person was listed in records as buying media in the Cleveland market — at the same TV station in at least one case — for both the Renacci campaign and the Congressional Leadership Fund.

Candidates and super PACs can avoid charges of coordination altogether by sending up smoke signals in cyberspace.

For example, one of Target’s top clients was Freedom PAC, a super PAC that paid the firm nearly $3.4 million for ad buys supporting Rep. Connie Mack, the unsuccessful Republican candidate in the Florida Senate race.

Freedom PAC released an ad containing some of the same footage that was on the Mack campaign’s YouTube channel.

Under FEC coordination rules, campaign committees and the outside groups that boost their candidates may share material as long as it is publicly available.

“It’s a pretty big joke that anyone would really believe that these groups are truly independent from the candidates,” Ryan said. “They’re not.”

Reprinted by Permission © 2013, The Center for Public Integrity®. All Rights Reserved.

TRENDING LEGAL ANALYSIS


About this Author

James R. Soles Fellow The Center for Public Integrity

Reity O’Brien is the Center’s 16th James R. Soles Fellow. She graduated from University of Delaware in May 2012 with an Honors degree in political science and economics and minors in Spanish and journalism. She worked for The Review, the university’s student-run newspaper, where she served as city editor and covered Delaware’s turbulent Senate contest in 2010. Reity has been the recipient of awards from the Maryland Delaware DC Press Association and the William P. Frank Scholarship Fund. She has held internships at Fortune Small Business Magazine, The Cecil Whig and The Philadelphia...

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Data Reporter

Andrea Fuller joined the Center for Public Integrity in September 2012 as a data reporter. She previously worked at The Chronicle of Higher Education in a similar role. There, she oversaw the publication’s award-winning analysis of presidential pay at non-profit colleges. She also worked on stories and interactive graphics about a number of other higher-education issues, including student debt, conflicts of interest, and fraud. Andrea previously interned for The Chronicle, The New York Times, The Hill, and The Asheville-Citizen-Times. She...

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