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Republican Groups Outspend Political Parties, Drawing Protests

Senate Finance Committee Chairman Max Baucus. Photographer: Joshua Roberts/Bloomberg
Senate Finance Committee Chairman Max Baucus. Photographer: Joshua Roberts/Bloomberg

Sept. 30 (Bloomberg) -- Republican-leaning outside groups, under fire from Democrats, spent more to sway the Nov. 2 congressional elections during September’s first four weeks than the two political parties combined, federal records show.

The groups -- including Crossroads GPS, advised by Republican strategist Karl Rove, and the U.S. Chamber of Commerce -- spent more than $33 million, mainly on advertising. That compares with less than $20 million spent by the Republican and Democratic congressional fundraising committees.

Many of the organizations are registered as nonprofits that don’t disclose their donors, spurring protests from Democrats including President Barack Obama and Senate Finance Committee Chairman Max Baucus, who yesterday asked the Internal Revenue Service to probe whether the groups are violating tax laws.

Baucus’s call for an investigation is a “warning shot” designed to curtail groups that “may currently be acting as pass-through entities for campaign cash,” said Rogan Kersh, a public policy professor at New York University in New York City. “It’s unlikely that the IRS will produce a detailed report before the elections.”

Baucus, of Montana, said his committee may hold hearings or draft legislation in response to what the IRS finds.

‘Hiding’ Behind Cloak

“Special interests hiding behind the cloak of independent nonprofits threatens the transparency our democracy deserves and does a disservice to fair, honest and open elections,” Baucus said in a statement issued by his office.

Obama has used two of his recent weekly addresses to blast Republicans for blocking legislation that would make groups engaged in political activity report their contributions.

Outside organizations so far have focused most of their fire on Senate races, particularly in California, Colorado, Florida, Missouri, Nevada and Pennsylvania, according to reports they filed with the Federal Election Commission.

As a trade group, the Chamber of Commerce doesn’t have to disclose its donors even though it is playing a major role in the campaign, with plans to spend $75 million. Crossroads GPS said it engages in issue advocacy and grassroots lobbying. Neither of the Washington-based groups has to disclose its contributors to the FEC, though they do have to report some political activity.

Boxer, Bennet

The chamber has spent about $4 million on ads targeting Democratic Senators Barbara Boxer in California and Michael Bennet in Colorado, among others. Crossroads GPS on Sept. 28 reported spending almost $1.2 million on television ads to oppose Democratic candidates Robin Carnahan in Missouri and Joe Sestak in Pennsylvania and Senator Patty Murray in Washington.

Some of the organizations “seem to be testing the limits of what they can do, so pushback was inevitable,” said Linda Fowler, a government professor at Dartmouth College in Hanover, New Hampshire.

The groups themselves say they are acting legally.

“We comply with all rules and regulations,” said J.P. Fielder, a spokesman for the chamber, the nation’s biggest business lobbying group. “The chamber has been and will continue to be engaged in the issue debate.”

Crossroads GPS spokesman Jonathan Collegio said “the law is clear, and we follow it carefully.”

Addressing Advantage

The outside spending is making up for a $20 million cash advantage the three main Democratic Party fundraising committees had over their Republican counterparts heading into September. In the first four weeks of September, the Democratic committees spent more than $11 million, compared with $8.2 million by their Republican Party rivals.

Democratic-leaning outside groups spent less than $6 million in that same time period on activities that must be reported to the FEC.

Some of the Republican-leaning groups have focused more on House races. Americans for Job Security, an Alexandria, Virginia-based group that says it promotes free markets and “pro-paycheck public policy,” has reported spending about $4 million in House districts in Indiana, New Mexico, New York, North Carolina, Ohio, Pennsylvania and Virginia.

“Our primary purpose is still issue advocacy,” said Stephen DeMaura, the group’s president. “Our goal is to talk about issues, whether through issue advocacy or electioneering communications or independent expenditures.”

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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