Dark Money Rising

Posted: Feb 02, 2014 8:37 AM

Once leery about the supposed evils of unlimited campaign cash, liberals are now embracing a larger view of money's role in politics, the Washington Free Beacon's Lachlan Markay reports for the February issue of Townhall Magazine.

October 28, 2013 the governors of California, Oregon, Washington, and the premier of British Columbia signed a pact pledging to take a variety of actions to reduce carbon emissions.

Supporters hailed the agreement as a landmark effort to move away from fossil fuel-based energy and “green” the states’ various economies.

California already had a cap and trade regime, and British Columbia had imposed a carbon tax in 2008. Supporters of the plan worried that the actual policies it called for would get tied up in Oregon and Washington.

Republicans controlled the Washing- ton state senate, supporters noted, and they’d been cool to some of the more am- bitious emissions reduction ideas.

Billionaire environmentalist Tom Steyer was no doubt aware of the dynamics and the stakes when he began pouring money into a pivotal special election for a single state Senate seat in Washington.

Steyer cut his teeth at Farallon Capital Management, a massive hedge fund that he founded and led until 2012. He has since become the most politically potent environmentalist moneyman in the country.

Farallon has come under fire for what critics say are environmentally destructive business practices, but Steyer is a darling of the environmental Left (Bill McKibben calls him “daddy greenbucks”) for the money he has poured into the cause.

In Washington, Steyer’s group, NextGen Climate Action, funneled money through two other independent expen- diture groups to support the reelection campaign of Democrat state Sen. Nathan Schlicher, and to attack his opponent, Republican state Rep. Jan Angel.

The race, Democrats in the state predicted, would decide which party enjoyed a de facto majority in the state Senate (two Democrats caucused with Republicans at the time, effectively giving the GOP its majority).

NextGen gave $250,000 to a group called She’s Changed PAC, which bought ads and paid for polling and canvassing for Schlicher. It also gave $275,000 to the Washington Conservation Voters Action Fund, which paid for similar services, and itself donated to She’s Changed.

Angel prevailed despite the sums spent against her. But she was one blemish on Steyer’s otherwise impressive track record on Election Day 2013.

Steyer would end up spending more money on a per-vote basis in 2013 than prominent conservative financier Sheldon Adelson did the year before.

In the month before the election, though, major news organizations devoted little attention to Steyer’s huge contributions to dark money groups working to elect Democrats around the country.

The New York Times mentioned Steyer twice in the month of October, both in an off-hand fashion in articles about the fight against the Keystone pipeline, the billionaire’s cause ce´le`bre.

Liberals dominated the third party expenditure game in 2013, but one could be forgiven for being completely unaware of that fact. Few news organizations outside of the beltway are paying Steyer much mind. Meanwhile, liberal super PACs are crushing their conservative counterparts in the run-up to 2014.

The Times, a microcosm of the media trend, didn’t find Steyer’s involvement in a key Washington state race noteworthy, but it did devote more than 1,100 words on page A1 to “Koch group” Americans for Prosperity’s involvement in elections in Iowa two days before voters went to the polls.

Koch Industries, the company owned by fraternal libertarian billionaires Charles and David Koch, says the Times has singled out the company or its owners 286 times since March 2011. That month, the paper wrote a glowing piece on Steyer, headlined “A Foil for the Koch Brothers?”

Steyer, wrote the Times’ Todd Woody, was “itching to take on...the secretive billionaire brothers and bankrollers of conservative causes.”

Despite their ideological ambivalence to more expensive elections, conservative groups are actually spending less money in 2013, and, probably, 2014 than they did in 2010 and 2012.

Much of the reticence on the part of business groups like the U.S. Chamber of Commerce or more moderate Republican outfits like Crossroads stems from divisions among conservatives, highlighted and exacerbated by October’s federal government shutdown.

The fight pit those groups against more ideological, Tea Party-aligned organizations. The Chamber and similar groups such as the Business Roundtable opposed the shutdown because they saw it as harmful to business interests.

The resulting hesitation to finance Republican candidates was therefore emblematic of a shift in the GOP, for better or worse, away from corporate capture. To the extent that Republicans were responsible for the shutdown, they were defying some of their most prominent financial backers.

The Times, though, seemed determined to tie the Kochs. On October 5, investigative reporter Mike McIntire and congressional correspondent Sheryl Gay Stolberg revealed a “blueprint to defunding Obamacare,” devised by “a loose-knit coalition of conservative activists.”

“It articulated a take-no-prisoners legislative strategy that had long percolated in conservative circles,” the Times reported, “that Republicans could derail the health care overhaul if conservative lawmakers were willing to push fellow Republicans—including their cautious leaders—into cutting off financing for the entire federal government.”

Americans for Prosperity, Heritage Action, Tea Party Patriots, FreedomWorks, and other conservative groups were involved. So were “the billionaire Koch brothers,” as the Times identified them before noting their first names. A group “linked to the Kochs” also gave large do- nations to groups ostensibly involved in the Obamacare defunding effort.

Nowhere did the authors say that any member of the Koch family helped craft or execute the shutdown strategy. Koch Industries says that’s because none of them did.

Neither did Americans for Prosperity, the group insisted. President Tim Phillips said AFP was working to repeal, not defund, the law.

By the next morning, though, the blogs had picked up on the Koch angle. “Among those behind the effort are, predictably, the Koch brothers,” wrote Los Angeles Times cartoonist David Horsey.

“There really IS a vast right-wing con- spiracy,” declared Arkansas Times blogger (and former editor) Max Brantley.

Over the next three days, congressional Democrats attacked the Kochs by name, citing the New York Times piece and often alleging more direct involvement than the story reported.

“According to the news article,” said Senate Majority Leader Harry Reid (D- NV), “the Koch brothers...have been rais- ing and spending hundreds of millions of dollars to get us where we are right now.”

In fact, the group that spent hundreds of millions of dollars was the Freedom Partners Chamber of Commerce, a business group similar in structure to the lib- eral Business Forward and the Center for American Progress’ Business Alliance. Like Koch Industries, Freedom Partners was not involved in the defund effort, though it had given money to groups that were.

The most animated Koch antagonist was Sen. Bernie Sanders (D-VT), who railed against Charles and David Koch for days after the Times ran its story.

“A handful of people with incredible sums of money like the Koch brothers and others, are undermining what this democracy is supposed to be about,” Sanders said in a statement.

The shutdown strategy, he claimed on MSNBC, was “planned by the Koch brothers.” Sanders’ comments on cable news and the Senate floor were of course picked up by other news organizations and left-wing pundits.

By the third day, Koch Industries knew it had a problem. It sent a letter to senators noting that it never advocated a government shutdown.

Stolberg published a 250-word blog post noting the statement, and that AFP also denied having any part in the conservative shutdown strategy. The Times shifted its coverage the next day: the Kochs weren’t architects of the shutdown, they were emblematic of a split in the Republican ranks.

The Kochs had represented both sides of that split in the pages of the Times in just four days: first the unwavering ideologues who would shut down the government rather than fund Obamacare, then as the business interests attempting to rein in rogue Republicans.

Throughout 2013, Steyer helped bankroll the successful campaigns of Sen. Ed Markey (D-MA) and Governor-elect Terry McAuliffe (D-VA) through NextGen and donations to other dark money groups such as the League of Conservation Voters, another left-wing heavyweight.

Markey benefitted tremendously from Steyer’s support, but he was forced to jump through rhetorical hoops to explain away the massive loopholes his “People’s Pledge.”

The liberal Massachusetts Democrat made an issue of his opponent Gabriel Gomez’s refusal to sign the pledge, which said candidates would have to donate half the cost of any advertisement funded by an independent expenditure group on their behalf to a charity of his opponent’s choice.

But Markey’s dark money take dwarfed Gomez, it was just spent on activities other than advertising. Independent expenditure groups dropped more than $5 million supporting Markey or opposing Gomez and Rep. Steven Lynch (D-MA), Markey’s primary opponent. Gomez’s IE support totaled about $1.7 million.

In October, Steyer was focused on electing McAuliffe. He helped bankroll a media effort for McAuliffe that drowned out his Republican opponent, state Attorney General Ken Cuccinelli, in the final weeks of the gubernatorial race.

McAuliffe and money are synonymous in political circles. Al Gore called the former DNC chairman “the greatest fundraiser in the history of the universe.” McAuliffe boasted in his book of raising $30 million for the Democratic Party in a single night.

So some observers guffawed when McAuliffe lamented, “there’s just way too much money in politics.”

This was the same McAuliffe who once left his wife in a hospital delivery room to attend a fundraiser. “I felt bad for Dorothy, but it was a million bucks for the Democratic Party,” he wrote.

Steyer spent nearly as much in Virginia as the Republican Governors Association. And as the Washington Post’s Chris Cilizza wrote, “The key lesson [in Virginia] is that the candidate with the most money usually wins.” Cilizza included a chart showing that McAuliffe’s spending totals were closer to that of Republican Gov. Bob McDonnell when he ran in 2009. Cuccinelli’s tracked closer to McDonnell’s opponent,

Democratic state senator Creigh Deeds. In four years, the balance of money in the race had shifted almost completely from Republican to Democrat, thanks in no small part to Steyer. That shift was seen in third party groups’ involvement in races around the country.

Liberal super PACs spent twice as much as conservative ones in 2013, according to a tally by the Center for Responsive Politics. “For better or worse, people are getting comfortable with the new campaign-finance landscape,” said CRP’s Sheila Krumholz.

A more accurate phrasing might be that liberals are getting comfortable with it. Most conservatives never had ideological qualms with what they see as fewer regulations on free political speech by third party groups.

The Left, though, saw the Supreme Court’s decision in the 2010 case Citizens United vs. FEC as a body blow to democracy itself.

Many on the Left are careful to preserve their image as reluctant campaign financiers. “There’s no doubt that come next year, Republicans are going to out- spend, outraise Democrats by extraor- dinary sums,” Priorities USA chief Bill Burton recently insisted.

But as conservatives pull on the reins of their campaign finance apparatus, liberals are already lining up to bankroll not just 2014 campaigns but an expected 2016 run by former-Secretary of State Hillary Clinton.

“Seeing her in the White House is a big dream of mine,” liberal billionaire Haim Saban told Politico. Saban, who donated $1 million to Priorities USA in 2012, is pledging massive financial support for Clinton’s likely White House run.

“The early signal from Saban is a re- minder that Clinton will have plenty of outside cash to help her in a potential campaign,” Politico noted. “And unlike Obama, who had an uncomfortable relationship with Priorities USA that kept a number of donors at bay, the Clintons have historically had no such worry.”

Former-President Bill Clinton provided a desperately needed infusion of cash and credibility for Priorities as the super PAC struggled to attract donors in 2012, headlining a “briefing” for potential do- nors in August.

The group’s initial struggles stemmed from many liberals’ hesitation to back the Democratic embodiment of a campaign finance regime that many on the Left reviled, at least publicly.

The president professed the same hesitation, and his campaign pledged that no administration officials would be soliciting contributions on behalf of Priorities or any other super PAC.

The president wouldn’t even attend Priorities events, campaign manager Jim Messina insisted. “The President opposed the Citizens United decision,” he wrote, but Republicans were taking full advantage of the new campaign finance regime, and so too would Obama’s reelection effort.

Administration officials would attend super PAC events, Messina said, but the president himself would not.

Obama violated that pledge, attending an October 2012 event at the home of DreamWorks CEO Jeffrey Katzenberg’s home, which the affluent Obama bundler used to solicit $1 million in contributions for Priorities.

Katzenberg himself donated $3 million to the group during the 2012 election cycle. He also bundled more than $500,000 for the campaign, as he had for the president’s 2008 effort. That support, the White House said, had nothing to do with its decision to hold an official event at DreamWorks’ California headquarters in November.

“The center of power in the Democratic Party in terms of money really has moved to Katzenberg,” a top Democratic strategist recently remarked. He has personally pledged his full support for Hillary Clinton if she opts for a 2016 run.

Priorities is also poised to throw its full weight behind a Clinton White House bid. Katzenberg will reportedly continue working with the group.

Rumors swirled in November that Priorities was looking to pick up some of the top Democratic political talent in Washington. Center for American Progress chairman John Podesta may have to forego the gig now that he has accepted a position as a “counselor” to the president.

The group was also in talks with Messina, the Washington Post reported in November. If he opts to sign on with Priorities, Messina will be leaving a group, Organizing for Action, that offered high-dollar donors access to the president and top administration officials.

All of which is to say, top Democrats are busy perfecting the dark (money) arts for what is sure to be an expensive presidential election cycle.

The shift might require more liberals to come to terms with expensive elections and the involvement of groups shaped by the Citizens United decision.

Election observers will have to acknowledge the same. If conservatives dominated the third party political spending arena in the immediate aftermath of Citizens United, liberals have quickly leveled the playing field.

That’s a story that might interest New York Times readers, if reporters there tire of attacking the Kochs.

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