April 22 (Bloomberg) -- Two childhood friends are bankrolling Paige Kreegel’s bid to win a U.S. House seat.
They set up a $1 million super-political action committee that spread Kreegel’s message on Florida television, by automated telephone calls and in the mail when his own campaign couldn’t afford to do so. Their contributions to the super-PAC, Values Are Vital, amounted to about 10 times the sum Kreegel raised from other donors for the race.
Today, they will find out if there’s a return on their investment in a Republican primary that will likely determine the next representative, given the district’s partisan bent. Kreegel, who lost a run for the same seat in a crowded primary in 2012, benefited this year from the super-PAC’s intimidating role, he said in a videotaped interview last month with the Naples Daily News editorial board.
“It did keep us from becoming a six-way race,” said Kreegel, who is facing two serious competitors in tonight’s vote. “It’s done its job.”
Such candidate-specific super-PACs in congressional and Senate races are the latest development in the changing campaign-finance landscape. A Bloomberg review of U.S. Federal Election Commission filings has identified at least 40 such entities, with more forming each week.
Eight of the 12 most competitive Senate races are buzzing with individual super-PAC activity as Republicans work to pick up the six seats they need to take control of the chamber in November. Democrats are also starting outside groups. Wolfheel PAC, a group that will assist Democratic Senator Kay Hagan’s re-election in North Carolina, registered with the FEC in January.
The risks of such dependence on wealthy backers, who may later have legislative interests before Congress, alarms campaign-finance and government watchdog groups.
“It is a ridiculous charade to think that super-PACs don’t lead to corruption,” said Paul S. Ryan, senior counsel for the Campaign Legal Center, a nonprofit based in Washington that favors restricting outside groups.
In addition to friends, families are getting into the action. Nebraska Senate candidate Ben Sasse’s great uncle gave $100,000 in March to get a super-PAC going to help his relative win a contested Republican primary. Representative George Holding, a North Carolina Republican, won his 2012 election after a super-PAC called American Foundations Committee helped with ads. Its donor list reads like a family reunion: cousins, uncle, aunt.
The down-ballot action is an echo of the 2012 presidential election in which dedicated super-PACs boosted Republican primary challengers Newt Gingrich, Rick Santorum and Mitt Romney, as well as President Barack Obama.
Federal court rulings and regulatory action in 2010 cleared the way for individuals, corporations and labor unions to make unlimited contributions in federal races through outside groups such as super-PACs.
The organizations can’t coordinate with candidates, who are still legally confined to federal contribution limits of $2,600 per election. Yet they can view each other’s public documents such as TV ad buys at local stations and FEC filings to develop synchronized strategies.
Some super-PACs have been using advertising footage, called b-roll, provided by the campaign itself through public postings on YouTube.com. Two Washington-based campaign-finance watchdogs, Campaign Legal Center and Democracy 21, recently filed FEC complaints about the practice, which they say is tantamount to illegal coordination.
For television-viewing voters, it can be almost impossible to tell the difference between the candidate and the assisting group, said Elizabeth Wilner, a senior vice president at Kantar Media’s CMAG, an ad tracker based in New York. “Viewers will see the same images, hear the same message over and over, and it just all blends together.”
One pro-Kreegel ad shows him in a white coat and stethoscope interacting with patients. Later, footage of the candidate, his wife and children appears on screen. “Three candidates for Congress, but only one true conservative, Dr. Paige Kreegel,” a narrator says in the Values Are Vital ad.
The super-PAC’s TV commercials debuted almost three months before the candidate’s ads and ran five times more frequently, according to data compiled by CMAG. And Values Are Vital is just one of four super-PACs formed exclusively for the 19th congressional district contest.
“The Florida-19 situation with all of these outside groups will be more common than not by the end of the year,” Wilner said.
The financial backing for Values Are Vital comes from two of Kreegel’s childhood friends from Miami, he told the Daily News editorial board, which later endorsed him. FEC filings identify the initial donors as Ronald Firman and Martin Burns. Firman used a Miami post-office box as his address. Burns lives in Las Vegas, where he is a lawyer.
Firman said in a brief telephone interview that he is in the financial services industry. Burns didn’t return telephone calls and e-mails.
“We support Dr. Kreegel because we know that he would make a great Congressman because he is a true conservative, highly intelligent, knowledgeable, capable, and is an individual of high integrity,” Firman said in an e-mail.
In the Daily News interview, Kreegel said he needed his friends’ help.
“This is going to be a vastly foreshortened race, and the idea of collecting money again once you’ve lost a race becomes much more difficult,” said Kreegel, whose FEC disclosure reports show he had raised $126,005 through April 2.
Campaign manager Alex Melendez said in an e-mailed response to questions from Bloomberg for this article that “Paige will not owe them anything if elected.”
To donor John Jordan, that rings true. Jordan, a California winery owner, spent $1.5 million on a pop-up super-PAC to help Massachusetts Senate candidate Gabriel Gomez last year. Gomez, a Republican, lost.
“I have no legislation pending before Congress, so why would I want to buy anybody? What would I do with them?” he asked, adding that his political donations reflect his patriotism.
“Anyway, major donors will tell you that candidates who receive help are so sensitive to that image that they almost go out of their way to screw donors to prove it is above board,” Jordan said.
Because outside groups can activate quickly, with just one or two big checks, it’s easier for them to jump into an election early with a bout of TV advertising.
That’s the state of play in Kentucky, where Senator Mitch McConnell faces a competitive Republican primary in May and, if he prevails, a well-funded Democratic opponent in November.
Two McConnell supporter groups have focused on the general election, and they’ve been chipping away at Democratic hopeful Alison Lundergan Grimes for almost a year. While Grimes has yet to air a single ad, pro-McConnell forces -- his campaign, the super-PAC Kentuckians for Strong Leadership, and a nonprofit Kentucky Opportunity Coalition -- have broadcast about 5,000 ads, CMAG data shows.
The commercials paint Grimes as a yes-woman for Obama and Democratic Senate Majority Leader Harry Reid.
Kentuckians for Strong Leadership isn’t so much a group of Kentuckians; a Bloomberg review of its initial fundraising showed only 2 percent of its receipts came from in-state. Its most recent FEC filing, for the first three months of this year, shows that about 80 percent of the money still comes from out of state. One of the biggest check-writers was Joseph Craft III, president and chief executive officer of Alliance Resource Partners LP, a Tulsa-based coal producer. He gave $100,000 through his JWC III Revocable Trust.
To contact the reporter on this story: Julie Bykowicz in Washington at firstname.lastname@example.org
To contact the editors responsible for this story: Jeanne Cummings at email@example.com Mark McQuillan