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Thursday, September 29, 2011

Red money, blue money: The making of the 2012 campaign


2012 Elections

Red money, blue money: The making of the 2012 campaign

Karl Rove

The hidden infrastructure of the 2012 campaign has already been built.

A handful of so-called Super PACs, enabled to collect unlimited donations by the continued erosion of campaign finance regulations, are expected to rival the official campaign organizations in importance this election. In many cases, these groups are acting essentially as outside arms of the campaigns.

These are America's best-funded political factions, their war chests filled by some of the richest men (and almost all are men) in the country.

More than 80 percent of giving to Super PACs so far has come from just 58 donors, according to the Center for Responsive Politics analysis of the latest data, which covers the first half of 2011. The Republican groups have raised $17.6 million and the Democratic groups $7.6 million. Those numbers will balloon, with American Crossroads, the main Republican Super PAC, aiming to raise $240 million.)

The exceptions are two public employee labor unions, whose massive donations match those of some of the largest moguls. The rest are individuals with vast fortunes at their disposal. They constitute two different tribes.

The conservative red tribe is dominated by businessmen who have built or inherited fortunes. They also include Wall Street investors, oil and gas men, construction magnates, and retail executives. Mormons are well represented.

The liberal blue tribe is dominated by men from Hollywood and media entrepreneurs -- often Jewish -- and the leaders of the American Federation of State County and Municipal Employees (AFSCME) and the Service Employees International Union (SEIU).

The Super PACs are not paragons of transparency, but what has been disclosed gives a sense of where the money is coming from and the interests of those giving it. Based on the donors and the origins of these groups, we can already discern what messages the Super PACs will generate in the home stretch of the campaign.

What follows is a pocket guide to the big money tribes of American politics, what they will tell you -- and what they won't.


Staffed by former officials from the Republican National Committee and the U.S. Chamber of Commerce and associated with Karl Rove. Many consider it more important than the RNC itself. Certainly American Crossroads and Fox News control the GOP's message in a way the Republican National Committee does not and cannot. It is not unfair to say that during a presidential election year, the Republican Party is more an adjunct to American Crossroads, than vice versa.

The funders:

  • Jerry PerenchioJerry Perenchio, the former CEO of Univision, has already given a whopping $2 million to the group. Perenchio has been attacked by some right-wing commentators for his moderate stances on immigration issues. Befitting his more moderate politics, Perenchio in August signed on to the Jon Huntsman campaign as a member of the "California finance team" to help with fundraising. That move came four months after his contribution to Crossroads. Given Huntsman's failure to pick up any steam, it's not clear at this point what role Perenchio will play in the 2012 race.
  • Bob Perry: A Texan who made a fortune in the construction business, he has given $500,000 to Crossroads. A longtime friend of Rove, he's been a huge donor to GOP causes for years. In 2010, he gave a staggering $7 million to Crossroads in a six-week period before Election Day. As for what issues he cares about, a spokesman once described his philosophy this way: "People call him and pitch him, and if he likes what he hears, he'll write a check." That includes unsavory efforts like the 2004 Swift Boat Veterans for Truth attack campaign against John Kerry, which Perry bankrolled.
  • Robert RowlingRobert Rowling: Another familiar name in the world of GOP fundraising, the Dallas billionaire has given $1 million to Crossroads -- on top of the $2 million he gave the group during the 2010 campaign. He inherited a family oil fortune and has since become a successful investor in the hotel business, among others. The fact that Rowling's company, TRT Holdings, owns Gold's Gym generated a backlash in October 2010 when gay activists pointed out that Rowling's contributions were funding "some of the most vehemently anti-gay politicians in the country." Several San Francisco Gold's franchises subsequently left the company. Interviewed on Fox at the time, Rowling suggested his support of Crossroads was all about "fiscal sanity" not "social issues."

What you'll hear: "Corrupt liberal elites squandered your hard-earned dollars on the socialist in the White House who appeases Muslims."

Look for Crossroads to focus relentlessly on economic issues. Recent Web ads by the group hitting Obama for the stimulus package, for proposing new taxes on the wealthy, and imposing too many regulations on business offer a taste of what's to come.

Crossroads' favored form is the attack ad. The group has already bought billboards and radio airtime targeting Sen. Claire McCaskill, who is seen as a vulnerable Dem in 2012, for a scandal involving unpaid taxes on her private plane.

What you won't hear: "Let's ban abortion." "George W. Bush was a good president." "Time to reinstate 'don't ask, don't tell.'"


Founded by former aides to Mitt Romney, this group is expected to maintain the minimum legal distance between itself and Romney's official campaign. Romney himself even spoke at a Manhattan fundraiser for the group, though -- apparently for legal reasons -- he left the room before an explicit appeal for money was made, the Times reported.

The funders:

  • Ed Conrad: A former executive at Bain Capital, Romney's old firm, he originally gave $1 million to Restore Our Future through a shell company, W Spann LLC, before coming forward amid media scrutiny of the transaction. Conrad is reported to be a longtime Romney friend and contributor who has otherwise not been particularly active as a GOP fundraiser or donor.
  • Steve LundSteve Lund and Jeremy Blickenstaff: The co-founder of the Provo, Utah-based skin care firm Nu Skin -- which claims to have "unlocked the science behind the secret to looking and feeling young" -- gave Restore Our Future $1 million. Lund has bankrolled Romney's political career from the very beginning: his race against Ted Kennedy in 1994. He and his wife have given tens of thousands of dollars to Romney over the years. He is also a leader in the Mormon church and reportedly owns a valuable early copy of the Book of Mormon.

    Also pitching in $1 million to Restore Our Future is Jeremy Blickenstaff, Lund's son-in-law and an attorney who has worked at Nu Skin. He does not have a history of political giving, but Blickenstaff did do a stint at the Marriage Law Foundation, a Utah-based group that "provides legal resources to defend and protect marriage between a husband and wife."
  • John Paulson: A hedge fund billionaire who placed a successful bet on the crash of the housing market, he gave Restore Our Future $1 million. He's given generously to members of both parties for years, and his firm also spent hundreds of thousands of dollars lobbying on Capitol Hill on financial regulatory matters. He was also a major figure in the SEC's fraud case against Goldman Sachs last year, which the company settled by paying a $550 million fine.
  • Paul and Sandra Edgerly: Paul Edgerly, a top executive at Bain Capital, with his wife gave $1 million to Restore Our Future. He and his wife have made well over $200,000 in political donations in the past 20 years, primarily to Romney and the national and Massachusetts Republican parties. Both Harvard Business School graduates, the Edgerlys were featured in the school's alumni magazine for building a "family clubhouse" in their backyard that features a full gymnasium, a tennis court, a batting cage, a sauna and other amenities.
  • Bob Perry: The Texas construction magnate hedged his bets with Rick Perry by giving the Romney PAC $500,000.

What you'll hear: "We need a man who has run a business running the White House."

The group is legally barred from coordinating expenditures -- such as buying ads -- with the Romney campaign, but look for it to echo Romney's message closely. Its bare-bones website, for example, declares that "It is time that we restore our future by supporting candidates who have worked in the private sector and created jobs, who understand the economy, and who believe in America, American workers, and American values." That candidate is Mitt Romney, the group made clear in its formation announcement in June:

Our nation is burdened by a struggling economy; our job creators who are tied up with red tape, and a growing federal government is stifling the private sector. President Obama has failed to fix the problems that affect Americans. ... Restore Our Future will support our next president, Mitt Romney.

Restore Our Future appears to have kept its powder dry -- so far. As of its most recent Federal Election Commission filings, which cover the first half of 2011, the group has not bought any ad time or spent money on other substantive political action.

What you won't hear: "Mitt's healthcare plan is superior to Barack's."


A Democratic response to Rove's American Crossroads, this group was founded in April by former White House deputy press secretary Bill Burton and former Rahm Emanuel aide Sean Sweeney. It will essentially function as an outside arm of the Obama reelection campaign.

The funders:

  • Jeffrey KatzenbergJeffrey Katzenberg: The Dreamworks Animation CEO and former Walt Disney Studios chief gave Priorities USA Action $2 million, making him the single biggest Super PAC donor on the Democratic side and the source of over half of Priorities USA's budget to date. He has also reportedly agreed to help raise money from others for the group, in keeping with his past as a major Democratic donor and bundler, having personally given at least $1.5 million over the past two decades. "The stakes are too high for us to simply allow the extremism of a small but well-funded right wing minority to go unchallenged," he told USA Today.
  • Mary Kay HenryService Employees International Union: The 2 million-member union known for its loyalty to the Democratic Party and President Obama -- it spent $60 million to elect him in 2008 -- gave $500,000 to Priorities USA Action. "We think we have to back this president in order to get America back to work," SEIU president Mary Kay Henry explained on C-SPAN in June. And she told the Times this week, "We're solely focused right now on trying to get the national debate focused on jobs and everybody paying their fair share. It's important for us to keep our eyes on who's standing in the way of working people. It's not President Obama. It's the corporations and the wealthy and the politicians they back who aren't willing to pay their fair share and are applauding efforts to dismantle government."
  • Fred Eychaner: He amassed a fortune of hundreds of millions of dollars through his Chicago media company, Newsweb Corp, that started out printing newspapers and eventually bought up radio and TV stations. So far he has given $500,000 to Priorities USA Action. Often described as reclusive and press-shy, Eychaner's Chicago mansion has been the site of big Democratic fundraisers for years, and last year he was rewarded by President Obama with an appointment to the board of trustees at the John F. Kennedy Center for the Performing Arts in Washington. His political roots are in the gay rights movement of the late 1970s, according to a Chicago Tribune profile. Eychaner is gay and has called his philanthropy on HIV/AIDS the "most important issue in my life."

What you'll hear: "The GOP will cut your Medicare to fund tax cuts for the rich."

It has already run a few ads, including a spot blaming Republicans for opposing economic reforms, giving tax breaks to the wealthy, and favoring a plan to "essentially end Medicare." Previewing the themes of Obama's reelection campaign if Mitt Romney is the nominee, the group bought ads in South Carolina -- timed for a visit by Romney -- attacking Romney's support of Rep. Paul Ryan's plan to end Medicare.

What you won't hear: "Maintain status quo for Wall Street." "Forever war in Afghanistan." "Yes, we can ... lead from behind."


Founded this year by former aides to Senate Majority Leader Harry Reid, Majority PAC is devoted to helping Democrats win in contested Senate races. "The best Senate strategists in the country are coming together for 2012 to make sure Senate races have every tool needed to win," Susan McCue, one of the leaders of the effort and a former Reid chief of staff, told Politico. "We are approaching this as a team led by those who know how to win in the toughest, most competitive races across the country." Reid himself along with Sen. John Kerry have sent out fundraising solicitations for the group, with Reid's pitch explicitly framing Majority PAC as a means to counter "the deep pockets and nasty tactics of Karl Rove, the Koch Brothers and their network of corporate-backed special interest groups."

The funders:

  • Steve BingSteve Bing: Another loyal Democratic donor from Hollywood, Bing inherited a family real estate fortune and has been a successful film producer through his company, Shangri-La Entertainment. He gave $250,000 to Majority PAC. Besides the millions of dollars he has given to the Democratic Party over the year, he has also put big money behind a 1998 California ballot initiative to tax tobacco products to pay for new government programs. In 2006, he spent a record $49 million to push Proposition 87, another California initiative that would have used new taxes on oil companies to develop alternative fuels. It was defeated.
  • SEIU: The union (see description above) has given $250,000 to Majority PAC so far.

What you'll hear: "Tea Party bullies want to cut your Medicare and Obamacare to pay for tax cuts for Wall Street."

Noting that 23 Senate Democrats are up for reelection in 2012 -- compared to just 10 Republicans -- Majority PAC says it will run "a transparent, low-overhead, take-no-prisoners Independent Expenditure campaign, [to] aggressively contest critical open seats, exploit opportunities to take over Republican seats and expand our firewall, and respond to attacks from Rove and his allies on Democratic Senate candidates." So far the group's website features state-specific ads from an affiliate group seizing on the GOP plan to end Medicare.

What you won't hear: "America yearns for Harry Reid's Las Vegas gravitas."


Yet another liberal Super PAC with deep ties to Democratic officialdom, it was founded this past spring by Ali Lapp, the former campaign director at the Democratic Congressional Campaign Committee, along with a couple of other former DCCC officials. The goal: win a Democratic majority in the House.

The funders:

  • AFSCME: The 1.6 million-member American Federation of State County and Municipal Employees has given House Majority PAC $200,000. It recently launched its own ad campaign arguing that passing Obama's "American Jobs Act" would also have the effect of increasing government revenues and decreasing the deficit. Expect to see the name of the public-employees union keep popping up in campaign finance reports: In 2010, it spent nearly $90 million helping Democratic candidates.
  • Donald Sussman: The head of multibillion-dollar Connecticut hedge fund Paloma Partners and the husband of Rep. Chellie Pingree, D-Maine, Sussman has given $150,000 to House Majority PAC. His giving to Democrats predates his marriage to Pingree this year: Sussman has contributed hundreds of thousands of dollars to Democratic groups and candidates in the last 20 years. He was thrust into Maine politics in 2010 when Pingree was criticized for taking trips on his private jet. He is on the board of the Israel Policy Forum, an American liberal Zionist group, and the liberal think tank the Center for American Progress.
  • SEIU: The union (see above) has given $185,000 to the House Majority PAC.
  • Fred Eychaner: The Chicago media mogul (see above) has given $100,000 to the House Majority PAC.

What you'll hear: "Eric Cantor and Tea Party bullies want to wreck government and Medicare to pay for tax cuts for the rich."

Like the other Dem Super PACs, the House Majority PAC has seized on Paul Ryan's plan to end Medicare. Its website says, "We're fighting against the recently-passed Republican budget, which provides trillions in new tax cuts for corporations and the wealthiest Americans, but ends Medicare as we know it by turning it into a voucher program and forcing seniors to find and purchase private health insurance." The House Majority PAC already ran an ad in New York's special election attacking Republican Bob Turner on Medicare, and another ad against Wisconsin Republican Sean Duffy for his vote in favor of tax cuts for the wealthy. The Duffy spot also echoed President Obama's recent focus on private jet owners.

What you won't hear: "Greenlight Israel's annexation of the West Bank." " America yearns for Nancy Pelosi's San Francisco style."

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Of course, the red and the blue tribes are hardly the only players in the political campaign. They have the deep pockets to dominate the airwaves with their advertising. But with the spread of the Internet, the influence of broadcast television is weakening.

There's an invisible tribe too. There are a slew of political nonprofits that will also be running campaign ads in 2012 who, because of their classification in the tax code, do not have to release donor information. So it's worth remembering there will be a lot of anonymous money in the game.

We'll look at them in a future article .

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