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Friday, October 3, 2014

How Out-of-State Money Steals the Election(s) from In-State Voters

We were warned of this happening before passing the 17th Amendment!

Super PAC(ked) With Out-of-State Money

midterms-compressorThey may be called super PACs, but they can’t be everywhere at once. It’s become fashionable for these committees, which can spend unlimited amounts on ads backing or attacking candidates anywhere in the country, to tout their allegiance to a state. But as often as not, an OpenSecrets Blog analysis found, they run mainly on out-of-state money.

We tallied up all the super PACs with a state or regional reference in their name that have spent money on ads this election cycle. Out of 34 of these supposedly home-grown super PACs, only 17 had received at least half of their contributions of more than $200 from within the state.

The three top spenders of the 34 — Put Alaska First PAC, Kentuckians for Strong Leadership and Mississippi Conservatives – all relied overwhelmingly on out-of-state funds. Meanwhile, seven of the super PACs are even registered outside the state they claim to be affiliated with: We Are Kentucky is run from Washington, D.C., for instance, and Empower Nebraska is based in Tampa. Yes, Florida.

State-affiliated super PACs: Top 10 spenders in 2014 cycle

*Percentage of contributions of more than $200 from individuals and committees according to groups’ most recent FEC filings. Expenditures are as of Sept. 30, 2014.

Some super PACs rely mostly on money from other super PACs, which muddies the trail. Put Alaska First, which supports Sen. Mark Begich (D-Alaska), has gotten the lion’s share of its funds from a single PAC. Out of a total $5.5 million it had collected by the middle of the year, $5.3 million came from Senate Majority PAC, a group with close ties to Senate Majority Leader Harry Reid (D-Nev.). The Alliance for a Better Minnesota, backing Sen. Al Franken (D) in his re-election bid, has raised nearly $21,000 this cycle, all from a single source: another super PAC called Win Minnesota PAC. Though it files from Minnesota, that group has received big checks from Washington, California and New York.

Dan Innis stumped New Hampshire before being defeated in his bid for the House. He received the backing of New Hampshire Priorities, a group founded by a Californian mortgage magnate.  (
Dan Innis stumped New Hampshire before being
defeated in his bid for the House. He received the
backing of New Hampshire Priorities, a group
founded by a Californian mortgage magnate.
Tracing these super PACs can be something of a scavenger hunt. Though they like to file from an in-state address, many of them — nine, exactly — would have you believe their office is run from the cramped quarters of a P.O. box.

Kentuckians for Strong Leadership — the super PAC backing Senate Minority Leader Mitch McConnell‘s (R) re-election bid — lists a DC-area phone number on its FEC forms along with a Louisville address. When OpenSecrets Blog dialed the number, we were connected to a friendly aide at American Crossroads — itself a major outside spender tied to well-known GOP strategist Karl Rove. As of mid-year, American Crossroads had given $380,000 to these ostensibly state-focused super PACs this cycle. Multiple requests for comment from Kentuckians for Strong Leadership went unanswered.

For their part, out-of-state donors tend to emphasize their in-state connections. New Hampshire Priorities, a group that backed Republican Dan Innis in the state’s First District House race, was created and bankrolled by California mortgage mogul Peter T. Paul. In an interview with OpenSecrets Blog, Paul stressed his ties to New Hampshire and his personal affiliation with the candidate. Innis served as dean of the business school at the University of New Hampshire — Paul’s alma mater — when it was renamed Peter T. Paul College of Business and Economics after a $25 million gift from his future benefactor. Paul, who shelled out more than $300,000 for the super PAC, said the New England state offers a better investment opportunity than the sprawling West Coast. “I kind of like the scale and the scope of New Hampshire versus here,” where the most impact he could have is to “put some swing set on a local park.” His impact seems to have ended with Innis’ loss in the GOP primary.

The super PACs themselves, not surprisingly, stress their strong ties to the states whose names they bear and their obliviousness to the geographic source of their groups’ funds. 

“All those connected to the operations of Mississippi Conservatives are longtime Mississippi political operatives,” said Brian Perry, treasurer of the group that helped Sen. Thad Cochran (R-Miss.) eke out a narrow victory during a primary runoff in June, and has received large checks from liberal New York donors like Napster co-founder Sean Parker and the city’s former Democratic mayor, Michael Bloomberg. “Mississippi is our home; we live here and work here,” Perry added in an email.

“Mark Begich and I have known each other since we were 13 or 14 years old,” said Jim Lottsfeldt, the senior advisor of Put Alaska First. “[Y]es, I have received money from the Senate Majority PAC, and have partnered with them,” he told OpenSecrets Blog in an email. But, “we are Alaska-centric.” 

Lottsfeldt is the only paid staff member of a group that has raised over $5.5 million and spent upwards of $6 million since it was created last May.

Sen. Mark Begich (D-Alaska) is facing a tough re-election race with help from a super PAC backed by party leadership. (
Sen. Mark Begich (D-Alaska) is
facing a tough re-election race
with help from a super PAC
backed by party leadership.

Arthur Hackney, who manages Alaska’s Energy /America’s Values, a rival group backing Begich’s Republican challenger Dan Sullivan, was even more emphatic about his super PAC’s authentic Alaska-ness.

“We are all born and raised Alaskans so we are all very involved in talking to Alaskans in an Alaskan language,” Hackney said in an interview. “So it’s an Alaskan super PAC.” The super PAC has received only 8 percent of large individual contributions from inside the state as of mid-year. 

Much of it – $375,000– came directly from Sullivan’s family, who are listed as Ohio residents. Sullivan’s parents also gave $300,000 to American Crossroads.

But their gifts to the Alaska group were topped recently by a whopping $500,000 donation from more than 3,000 miles away, according to the Alaska Dispatch News. An Alaska connection? Not so much, apparently. In fact, the contribution from the owner of the Houston Texans, Bob McNair, appeared to be something of a bank shot: McNair is a supporter of South Carolina GOP Sen. Lindsey Graham, and Graham is fond of Sullivan, Hackney told the paper, saying he simply got a call one day and the money was offered.

Still, Hackney insisted to OpenSecrets Blog, “None of the people giving the money have ever impacted the message.”

CRP Researcher Andrew Mayersohn contributed to this report. Source