Outside Spending Hits $137 Million in Key Senate Races: Report

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By Kenneth P. Doyle

Aug. 31 — With a little more than two months to go until Election Day, super political action committees and other outside groups already have spent at least $137 million to impact the eight closest races that will determine control of the Senate, according to a new analysis.

The study by the Brennan Center for Justice at New York University School of Law looked at outside spending in eight Senate races currently rated as toss-ups. It found $109 million in spending reported to the Federal Election Commission and another $28 million in spending announced by groups but not reported to the FEC.

Outside spending in 2016 is running significantly ahead of spending at a comparable point two years ago, the study noted. This cycle, the FEC-reported outside spending total of $109 million in the eight closest Senate races was almost 50 percent more than the $72 million in reported outside spending at the same point in 2014 in nine toss-up races.

“Outside spending in Senate elections is on track to shatter last cycle’s records,” said Ian Vandewalker, the Brennan Center counsel who authored the new analysis.

Even more important, he said, there is an increasing concentration of spending among a few major players, including groups closely linked to Senate Democratic and Republican leaders. Also among the top spenders are the U.S. Chamber of Commerce and a super PAC linked to the Koch network of conservative donors. Both the Chamber and Koch network support Republicans in the key races.

Key Seats Held by Republicans

The study looked at the eight Senate races listed as toss-ups by the Cook Political Report, which are in Florida, Illinois, Indiana, Nevada, New Hampshire, Ohio, Pennsylvania and Wisconsin. All but the Nevada race involve a seat currently held by a Republican incumbent. Democratic victories in at least five of these races could tip control of the Senate to Democrats.

The Brennan Center collected FEC data on independent expenditures in primary and general elections through Aug. 12 and also relied on data from the Center for Responsive Politics as a reference. It looked only at expenditures made by an entity other than a candidate’s campaign committee, including party committees, though parties were excluded from some parts of the analysis.

Vandewalker said the rise of outside spending—including money from groups that don't disclose their donors—showed the ease of circumventing limits on direct contributions to candidates and parties and also showed how easy it is to conceal donors. This highlights the risk that candidates and outside groups are illegally coordinating their activities, he said.

Super PACs must report their donors to the FEC, but nonprofit groups don't disclose their funding sources. Nonprofits can sponsor political ads directly or provide untraceable money to super PACs.

Campaign Finance ‘Outsourced.'

“A large part of the campaign finance system is being outsourced to these groups,” Vandewalker told Bloomberg BNA in a phone interview. He noted that candidates in the most expensive races often are being outspent by outside groups, which can raise unlimited amounts from wealthy individuals, corporation and unions.

The post-Watergate campaign finance laws enacted in the 1970s were based on contribution limits and disclosure of sources of campaign money, Vandewalker said, but these principles have eroded under the current system. Regulations on independent political spending have been struck down by court decisions over the last decade, including the 2010 Supreme Court ruling in Citizens United v. FEC.

The Brennan Center supports stronger regulation of campaign financing. Vandewalker said the center's new analysis indicated that “voters are right to see effective campaign finance reform as one of America’s biggest—and most necessary—challenges today.”

The latest patterns in spending show continued growth in “shadow parties”—groups closely linked to Democratic and Republican leaders, according to the Brennan Center study. These include the super PAC Senate Majority PAC on the Democratic side and the nonprofit group One Nation and super PAC Senate Leadership Fund on the Republican side.

One Nation Has Spent Most

The Brennan Center found that One Nation has announced spending of nearly $22 million in spending in key Senate races—the most of any outside group—but has not reported any spending to the FEC. The group has been able to avoid FEC reporting by avoiding words of express advocacy for or against candidates in its messages and sponsoring political ads outside the reporting period for “electioneering communications” aired close to an election.

Meanwhile, the Republican super PAC, the Senate Leadership Fund, which has links to Majority Leader Mitch McConnell (R-Ky.), has collected large contributions but has reported relatively little spending so far. The Republican super PAC's spending is expected to pick up as the election draws closer, the Brennan Center study suggested.

The Senate Leadership Fund and One Nation both were created in 2015 and have ties to American Crossroads and Crossroads GPS—groups founded by top Republican adviser Karl Rove that were among the biggest pro-GOP outside spenders in previous election cycles, according to the Brennan Center. Steven Law, a former top aide to McConnell, now heads the Crossroads groups, Senate Leadership Fund and One Nation.

The second largest outside spender in key Senate races is the Democratic super PAC Senate Majority PAC, the Brennan Center found. The super PAC, which has links to Minority Leader Harry Reid (D-Nev.), has reported $19.6 million in spending in key Senate races. Reid has personally solicited donations for the Senate Majority PAC, according to the Brennan Center.

Koch Super PAC, Chamber

The next biggest spender was Freedom Partners Action Fund, a super PAC funded by the network of conservative donors linked to Charles and David Koch, who head Koch Industries Inc. The Koch super PAC has reported spending $18.1 million in key Senate races, so far, the Brennan Center found. Its biggest donor is Charles Koch, who has given $6 million.

Close behind is the U.S. Chamber of Commerce, the nation's largest business lobby, which has spent $16.6 million on the key Senate races, according to the Brennan Center. As a nonprofit trade association, the Chamber doesn't disclose the funding sources for its political ads, though its members include many of the nation's largest corporations.

As in previous elections, much of the outside spending in the current campaign is not transparent, the Brennan Center found. Reported spending funneled through groups that don’t reveal their donors, sometimes called “dark money,” amounted to $26.8 million, or one-quarter of total outside spending in toss-up Senate races, with pro-Republican groups more likely to hide their donors.

Adding expenditures detailed in press releases and news reports but not in FEC data increases total expenditures by groups that hide their donors to at least $55.4 million. That was 40 percent of the approximately $137 million total of both FEC-reported spending and spending not reported to the FEC, the Brennan Center found.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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