Washington — A pair of political action committees supporting former Texas Gov. Rick Perry has raised nearly $17 million to propel him to the 2016 Republican presidential nomination, with almost all of that super PAC cash still available to spend.
But last week, Perry stopped paying the workers he had hired for his campaign because it’s running short of money.
That the effort to elect Perry can be at once both rich and poor illustrates the dramatically changing world of presidential election financing. And the way in which Perry, his supporters and government officials react to the situation could carry major implications for Perry’s Republican rivals, including Gov. Bobby Jindal.
“Money in politics is like water: It will find its way into the process no matter how many regulations or dikes you might put up,” said John McGlennon, chairman of the government department at the College of William & Mary in Virginia.
More than ever before, the run for the White House in 2016 is a campaign dominated by single-candidate super PACs, which can accept unlimited contributions but are supposed to operate independently of the candidates they explicitly support.
In actuality, campaigns and the single-candidate super PACs aligned with them are “joined at the hip,” said Paul S. Ryan, of the Campaign Legal Center, a nonpartisan, nonprofit Washington group that favors vigorous enforcement of campaign finance laws.
Yet with regulators hamstrung by partisan deadlock and congressional hostility, “The laws on the books are virtually meaningless,” Ryan said.
As super PACs increasingly engage in the kind of basic election activity central to a candidate’s official campaign, the lines between them blur, he said.
“The reason all this is a problem is that for decades, federal law has limited contributions to the candidates to prevent corruption of the candidates,” Ryan said.
Super PACs owe their genesis to federal court decisions since 2010 that have undone much of the system that was largely created in the aftermath of the Watergate scandal of the mid-1970s. That system banned political contributions or election spending by corporations and labor unions and sharply limited contributions by individuals to candidates’ official campaign committees. It also required full disclosure of contributions and expenditures by campaigns and political action committees.
The courts have left intact the restrictions on campaign committees: no corporate or union contributions, and a limit — now $2,700 per election — on donations from individuals. The disclosure rules, too, remain in effect for campaigns and PACs.
But the courts, in recognition of the constitutional right to freedom of speech, have opened up elections to unlimited giving and spending from almost any source. In acknowledgement of the potential for corruption from unrestricted donations to candidates, the courts have said the liberalized activity is legal only if it is independent and not carried out in coordination with candidates or their campaigns.
Super PACs are vehicles for unlimited, independent political activity. Increasingly, they are dedicated to the election of a single candidate, as with Perry, Jindal and every other Republican candidate of note, as well as with Democrat Hillary Clinton.
At this point in the 2012 presidential cycle, there were two single-candidate super PACs — one for Republican Mitt Romney, the other for Democrat Barack Obama — and they had raised a total of $15 million, said Anthony Corrado, a professor of government at Colby College in Maine.
In the current election cycle through July 31, according to reports filed with the Federal Election Commission, single-candidate super PACs and similar independent groups dedicated to a dozen Republican contenders had taken in nearly $250 million; a pro-Clinton super PAC had amassed $17.1 million.
Seven-figure donations from individuals are sprinkled among the super PACs, with a few reaching $10 million or more. Of Perry’s $17 million in super PAC money, more than $15 million has come from just three donors. Several candidates are backed by multiple super PACs.
Before this year, an election in which a single-candidate super PAC outraised a candidate’s campaign committee was the exception; now, it is more the rule, with the Republican super PACs collectively pulling in four times the amount donated to campaign committees. The imbalance is especially pronounced with Perry, whose campaign committee has received just over $1 million — and is now running out of money.
Jindal’s campaign committee raised just under $600,000 through the end of the reporting period on June 30. The pro-Jindal Believe Again single-candidate super PAC, organized in January, and the similar American Future Project, set up a few months later, drew a total of $4.7 million in donations through June 30, or eight times as much.
Before this year, Corrado said, the single-candidate super PACs generally focused on political advertising. But that has changed, too, with Believe Again a pioneer: It has sponsored more than a dozen town-hall meetings featuring Jindal with voters across Iowa, the state that goes first in the nomination process.
“That’s about as traditional a campaign activity as you can get,” Corrado said. “They’ve outsourced it to the super PAC.”
A super PAC backing former Hewlett-Packard CEO Carly Fiorina in the Republican race has rounded up endorsements and displayed Fiorina stickers, posters and balloons at political events.
But with the Perry campaign going broke, the pro-Perry super PACs could set a new standard of involvement in activities historically the province of official candidate committees: The director of one of those super PACs has said as much, pledging to hire field staff and build a ground game for Perry in Iowa, which holds its caucuses Feb. 1.
The FEC is responsible for enforcing the rules against coordination, but a 50-50 partisan split on the commission has meant deadlock and inaction. FEC Chairwoman Ann Ravel has described the commission as “worse than dysfunctional.” In any event, she has said, the coordination rules are “sadly murky.”
Technically, there is a barrier between a candidate’s campaign and the super PACs supporting the candidate, said Costas Panagopoulos, director of the Center for Electoral Politics and Democracy at Fordham University in New York.
“The question is: Where do you draw the line for what that barrier is?” he said. “At this point, that’s more subjective than objective.”
Believe Again raised nearly $3.7 million in the first half of the year, according to FEC reports. The largest single contribution came from Gary Chouest, the owner of a Bayou Lafourche boatbuilding and offshore oilfield services company, who gave $1 million.
“The outsourcing of campaign activities to super PACs renders meaningless the $2,700 contribution limit and poses a serious threat of corruption of these candidates,” Ryan said.
But there are drawbacks for Perry and others who may be forced to run their campaigns through single-candidate super PACs, McGlennon said.
“It does make it more difficult to maneuver as a campaign,” he said. “Presidential campaigns have to have the ability to respond quickly, and if you have to go through a third party to schedule events, to move your candidate around, it’s going to limit your ability to respond.”
It’s also more costly in terms of television advertising, as super PACs are not eligible for the substantial discounts provided to official campaigns, he said.
Beyond that, McGlennon said, is the question of who’s calling the shots for the super PACs.
A campaign committee may raise tens of millions of dollars, but no single contributor can donate more than $2,700, limiting the ability of a deep-pocketed donor to throw his or her weight around. As the support for Perry’s super PACs and, to a lesser extent, for Believe Again demonstrates, those constraints don’t come into play with the outside groups.
“When you are relying on a handful of people who are effectively undertaking the funding of your campaign, they’re going to expect a lot of influence,” McGlennon said.
But a candidate who lacks the broad appeal represented by a well-financed campaign committee probably is in trouble anyway, he said.
“I don’t think a candidate who has failed to generate a substantial amount of grass-roots support is going to be able to sustain a campaign just based on a third-party group,” he said.
Charlie Cook, who produces the national Cook Political Report, said the news from the Perry campaign shows that it “is in its death throes.”
“This is a campaign that’s not long for this world,” Cook said.
Yet one effect of the evolving financing environment may be to make that death, if it is one, longer and slower, Corrado said.
“In the past, candidates who didn’t get off to a good fundraising start were pretty quickly winnowed out of the field,” he said, “whereas in this type of environment, the candidates can stay in much longer because they basically have a safety net in terms of super PAC funds.”
Both Perry and Jindal have lagged behind most of the large Republican field in the polls, consistently registering in the low single digits. Neither qualified for the prime-time TV debate on Fox News on Aug. 6, which was limited to the candidates in the top 10, based on an average of national polls before the event.
When the Jindal camp talks about the resources at its disposal, it includes another pot of money, too: the $4 million raised by the nonprofit America Next since its formation in 2013.
And here the waters get murkier still.
America Next serves as a platform for Jindal’s policy proposals, publishing them on its website. Jindal was listed as its original “honorary chairman.” Baton Rouge publisher Rolfe McCollister, a longtime Jindal ally who has served as finance chairman in past campaigns, sits on its board, as do other members of Jindal’s network.
America Next is registered not as a political committee but as a “social welfare” organization. It files reports not with the FEC but with the IRS, under section 501(c)4 of the tax code. But under IRS rules, it need not disclose its donors, making it a so-called “dark money” group.
IRS regulations allow America Next to spend money on political activity outside its social-welfare function, so long as that spending accounts for less than half of the group’s work.
But if enforcement by the FEC is hobbled by partisan discord, regulation of dark-money groups by the IRS is paralyzed by a hostile political environment, Ryan and Corrado said.
Those groups were the subject of mishandled IRS investigations that erupted into the tea party-targeting scandal and made agency official Lois Lerner a household name before she was forced from her job in 2013. With Congress now controlled by Republicans, who led the attack on Lerner, the agency is highly unlikely to probe for dark-money violations, Ryan and Corrado said.
“The IRS has been bullied into submission,” Ryan said.
The outside groups, whether under FEC or IRS oversight, effectively have free rein to do almost as they wish, he said.
The super PACs will still be required to disclose their contributors and spending, but the dark money potentially can flow freely — and stay dark.
“The idea was always that exposure was enough: Letting people know who was paying for campaigns was enough of a check for the public,” McGlennon said. “Now, we don’t even have that.”
Follow Gregory Roberts on Twitter, @GregRobertsDC.
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