As Republican campaigns spend millions, PACs rise in importance
WASHINGTON (Reuters) - Republicans raised and spent money for the presidential race at a frenetic pace in January, according to new financial disclosures that also show why Democrats are concerned about the flagging "Super PAC" that supports President Barack Obama.
The breathtaking pace of fundraising and spending in the race for the Republican presidential nomination also revealed why campaigns are likely to increasingly rely on independent political action committees, or PACs, to boost their efforts.
Unlike campaigns, PACs have no limits on what they can raise or spend, so a few wealthy donors to a PAC can have a dramatic impact on a race.
The evolving nature of campaign funding was particularly evident in January with Mitt Romney's campaign and its ally, the aggressive Super PAC known as Restore Our Future.
Financial reports filed Monday with the Federal Election Commission indicate that Romney's campaign spent $19 million in January -- nearly three times as much as it raised -- as the former Massachusetts governor defeated Newt Gingrich in New Hampshire, lost to him in South Carolina and then topped him in Florida.
Restore Our Future, meanwhile, raised $6.6 million and spent $13.5 million, mostly on ads attacking Gingrich that helped Romney win the Florida primary. By the end of January, Romney's campaign had $7.7 million on hand and the pro-Romney PAC had $16.3 million.
The campaigns of Gingrich and Rick Santorum stayed in the game by raising $5.6 million and $4.5 million, respectively. But in Gingrich's case, the PAC supporting him -- called Winning Our Future -- was at least as influential as his campaign.
The pro-Gingrich PAC attracted $10 million in donations from the family of Las Vegas casino mogul Sheldon Adelson, and funded attack ads on Romney that helped Gingrich, a former U.S. House of Representatives speaker, win South Carolina's primary.
The fundraising and spending free-for-all among Republicans contrasted with the January performance of the Super PAC that supports Obama. The PAC, called Priorities USA Action, reported raising only $59,000 -- $50,000 of that from one donor.
Priorities USA had just $1.3 million in cash on hand at the end of January, the FEC filings show.
The pro-Obama PAC's report revealed why the White House scrambled earlier this month to start pursuing PAC donations more aggressively, something Obama -- a critic of the 2010 Supreme Court decision that allowed unlimited donations to PACs -- previously had been unwilling to endorse.
The good news for Obama is that his campaign's war chest -- built on donations of no greater than $2,500, the federal limit for individual contributions -- is far larger than that of any Republican candidate. At the end of January, Obama's campaign had $76 million on hand, the FEC filings show.
"What (Obama's team has) come to realize is that given the strength of the Super PAC fundraising on the Republican side, a major financial advantage is no longer guaranteed," said Anthony Corrado, a campaign finance analyst and professor at Colby College in Maine.
In unleashing millions of dollars into the Republican campaign, Super PACs largely have taken over the dirty job of running poll-changing attack ads.
Restore Our Future, the best-organized and deepest-pocketed PAC, now has raised nearly $37 million, heavily funded by the investment community. Romney is a former private equity executive.
Rival Super PACs supporting Gingrich and Santorum, who has become Romney's biggest challenger for the Republican nomination, each have relied largely on the donations of one or two wealthy donors.
Adelson's family has been the dominant donor to the pro-Gingrich group Winning Our Future, although Harold Simmons -- a billionaire Dallas businessman who supported Texas Governor Rick Perry before Perry left the race last month -- has given $1 million.
The pro-Santorum Red, White and Blue Fund has raised $2.8 million, including donations of $1 million each from Wyoming investor Foster Friess and William Dore, founder of Global Industries, a Louisiana-based oil and gas equipment company.
Many of these very rich donors are eager to oust Obama from the White House and are prepared to support the eventual Republican nominee, regardless of whom they backed before.
Another formidable player, focused heavily on the congressional races but likely to also get involved in the presidential campaign, is American Crossroads.
The Republican PAC supported by Karl Rove, former top adviser to president George W. Bush, raised $51 million together with its non-profit arm, Crossroads GPS. In January, American Crossroads alone raised just over $5 million and had more than $20 million on hand, Monday's filing showed.
Harold Simmons, who together with his company, Contran Corp., previously had given $7 million, donated another $5 million to American Crossroads in January. It was a busy month for Simmons: Besides making the $5 million donation to American Crossroads and a second $500,000 donation to the pro-Gingrich PAC, he gave $100,000 to Restore Our Future, the PAC that supports Romney.
BIG DONORS FROM INVESTING
The FEC filings show that Restore Our Future continues to rake in big donations from those with ties to the investment community.
The pro-Romney PAC has received donations of $1 million or more from at least nine contributors, plus other large contributions from Romney's friends in investing.
New donors in January included Bruce Kovner, manager of hedge fund Caxton Global Investments until last September, who donated $500,000 to Restore Our Future. Kovner donated heavily to the Republican Party last year, including $100,000 to defend Wisconsin Governor Scott Walker, a Republican, from a recall.
Hedge-fund manager David Tepper of Appaloosa Management LP gave $375,000 last month. Tepper contributed to Romney's campaign last year. The Tepper School of Business at Carnegie Mellon University in Pittsburgh was renamed after Tepper in 2004 in honor of his $55 million gift to the school.
Tiger Management Investment's Julian Robertson added $250,000 to the pro-Romney PAC in January.
Two Utah-based firms with a shared address and ties to former Nu Skin executives, F8 LLC and Eli Publishing, each gave $1 million to the pro-Romney PAC.
Restore Our Future also has received $750,000 each from brothers J.W. Marriott Jr. and Richard Marriott, of the international hotel chain.
(Additional reporting by Alexander Cohen; Editing by David Lindsey and Philip Barbara)
- Tweet this
- Share this
- Digg this