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Sat May 26, 2012
Election 2012

Outside Money Making The Race A Billionaire's Game

Originally published on Thu May 31, 2012 9:59 am

Hotshot political consultant Matt Mackowiak is a rising star in the very lucrative world of political consulting. His firm, the Potomac Strategy Group, helps Republicans win elections, but he's not working with Gov. Mitt Romney's campaign this election year.

People who are part of Mackowiak's tribe — the strategists, the opposition researchers, the pollsters — are discovering that they can have a much bigger impact working for outside groups that can raise unlimited amounts of money, unencumbered by the rules that restrict what a presidential campaign can do.

These political money men are already changing the way elections are won and lost.

"That's one of the interesting things about this," Mackowiak says. "These outside groups are playing an outsized role on the campaign right now. Campaigns and candidates themselves have less control over the narrative, less control over the media, less control over the story — and you now have this finance system that's unlike any we've ever seen."

The Supreme Court's 2010 decision Citizens United v. Federal Election Commission allows outside groups to raise and spend unlimited amounts of money to advocate for a particular issue or even candidate.

Now strategists and donors are going where the money's going, and growing evidence suggests that this election year — not just on the presidential level, but also for congressional races — will be dominated by superPACs.

Right now, more than 80 percent of the money raised by superPACs has gone to pro-GOP groups. And, according to the Center for Responsive Politics, 80 percent of all the money raised by these groups has come from just 100 individuals — the wealthiest people in America. People like Texas billionaire Harold Simmons.

A Billionaire Businessman

Simmons is believed to be the single largest donor to Karl Rove's superPAC, Crossroads GPS. He's probably best known for being one of several large donors to Swift Boat Veterans for Truth, the group that dogged Massachusetts Sen. John Kerry's 2004 presidential bid.

Several donors from that group and other Karl Rove projects are back this election year, too, says Charles Homans, who wrote a piece about Simmons for The New Republic. "If you look at the top of the list, it's got most of the Swift Boat Veteran donors on it. And Harold Simmons is one of them."

Simmons is also a philanthropist, giving money to a performing arts center in Dallas and area hospitals, as well as Republican candidates. Homans tells weekends on All Things Considered host Guy Raz that it's hard to say what motivates the billionaire; he doesn't give many interviews.

"If you look at his record you can make a pretty strong case that he's not a terribly ideological guy. He has sort of business-minded, kind of old-school conservative sensibilities, but in some respects, he's fairly socially liberal," Homans says.

As a businessman, however, he's constantly rubbing up against government regulations.

"He learned fairly early on that it was important to have a say in the political process if his businesses were going to run the way he wanted to run them," Homans says.

Homans estimates Simmons has donated around $18 million to $19 million to Crossroads GPS. "It's sort of dicey to put a dollar figure on a lot of these big donors right now, because a huge amount of the money that's flowing into this race is going into these organizations that don't actually need to account for where the money's coming from," he says.

'This Way, I Can Give More Money'

Simmons wouldn't comment for this story, but we found another billionaire who would. Julian Robertson is No. 16 on the list of the top individual donors in the U.S. this election year, giving $1.25 million to Restore Our Future, a pro-Romney superPAC.

"I'm a little bit in the time of life when one thinks about giving away money," he says, "and I can't think of a more worthy cause than to try to get this country into the hands of the best possible man that can run it. I think Barack Obama is a smart man that the electorate put into power without any qualifications to run the biggest business in the world, which is the United States of America."

He's not allowed to give as much as he'd like to Romney's campaign itself, so he gives to outside groups instead. "This way, I can give more money," he says. The volume of private money being poured into the election does bother him some, though.

"I think part of it bothers us all," he says. "Look, all I see is that here is a chance for me to affect a leadership change that is sorely needed in America, and I'm just taking advantage of that particular thing."

The Most Expensive Election In U.S. History

Try to guess how many superPACs are operating in the U.S. today. Dave Levinthal, who covers money and politics for Politico, says there are about 450 — at the moment.

"The number is growing by the day," he tells Raz. "It's something where people have really become very aware of the fact that, No. 1, they exist, and frankly, that it's not all that hard to form one."

And how much money have Simmons, Robertson and other donors spent so far in this election cycle? More than $100 million, Levinthal says. "And if you check back with me tomorrow, that number will probably have gone up in the interim." Without question, he says, this is the most expensive federal election in U.S. history.

While both parties are pouring outside money into the race, the Republicans are outspending Democrats by about 10 to 1, Levinthal adds. "Republicans have been much quicker to the punch, to embrace the new rules and regulations that now exist in the United States," he says.

That spending has already made its influence felt. Take Iowa, Levinthal says, where pro-Romney superPACs blistered the airwaves to tear down rival Newt Gingrich. "The whole complexion of the Iowa caucuses — and then New Hampshire and South Carolina and the various other states — it changed significantly."

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Transcript

GUY RAZ, HOST:

It's WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

Our cover story today: how unlimited money is already changing the way elections are won and lost.

MATT MACKOWIAK: Test, test, test.

RAZ: A few days ago, we called up a hotshot political consultant named Matt Mackowiak. He's a rising star in the very lucrative world of political consulting. His firm is called the Potomac Strategy Group, and he helps Republicans win elections.

OK. So you are a Republican consultant. Why aren't you working on Romney's campaign?

(SOUNDBITE OF LAUGHTER)

MACKOWIAK: I haven't been asked.

RAZ: Matt Mackowiak is laughing not because he doesn't want Romney to win. To the contrary, he really does want him to win. But people who are part of Mackowiak's tribe - the strategists, the opposition researchers, the pollsters - increasingly, they're discovering that they can have a much bigger impact working for outside groups that can raise unlimited amounts of money. I asked Mackowiak if he had a choice, either work the Romney campaign or for an outside group backing conservative values, which would he pick?

MACKOWIAK: Boy, that's, you know, an interesting question because, I think, probably before this cycle, before the Citizens United decision, which, I guess, was just before the 2010 cycle, in most cases, you'd say presidential campaign. The outside groups and the independent expenditures were seen as sort of a backwater. I think that's changed. You don't have to deal with candidates. You don't have to deal with candidates' spouses.

Generally, they're well-funded, if you have some major backers. You're able to really kind of do what you want and do it in a way where you also have control of your life. That's the other thing about presidential campaigns, is they're entirely consuming. You know, it's a 24/7 job for, you know, six, nine, 12, 15 months. I suspect these folks that are working for outside groups now are working hard, but they're not missing a lot of the things that you would miss if you worked on a presidential campaign.

RAZ: Matt Mackowiak is consulting for an outside group called Let Freedom Ring. It calls itself nonpartisan. And according to its website, it promotes constitutional government, economic freedom and traditional values.

Now, the Supreme Court's 2010 decision that allows outside groups to raise and spend unlimited amounts of money to advocate for a particular issue or even a candidate has meant that strategists and donors are going where the money's going.

MACKOWIAK: That's one of the interesting things about this, is that you're having these outside groups are playing an outsized role. Campaigns and candidates themselves have less control over the narrative, less control over the media, less control over the story - and you now have this finance system that's unlike any we've ever seen.

RAZ: There's growing evidence that this election year, not just on the presidential level, but also for congressional races, this year will be dominated by superPACs.

Right now, more than 80 percent of the money raised by superPACs has gone to pro-GOP groups. And according to the Center for Responsive Politics, 80 percent of all the money raised by these groups has come from just 100 individuals, the wealthiest people in America.

In a moment, we'll talk to one of those donors. He gave $1.25 million to a superPAC supporting Mitt Romney. But first to Charles Homans, a reporter who writes for The New Republic. Recently, he profiled one of those donors - in fact, one of the biggest - a Texas billionaire named Harold Simmons. In mid-2010, Simmons was summoned to a meeting in Dallas.

CHARLES HOMANS: Yeah. There was this sort of interesting meeting between Karl Rove and a number of these very wealthy business types from the sort of Dallas business community who had been longstanding supporters of the campaigns that Rove had run over the years. And he was basically coming around. He had this new organization called American Crossroads, which was going to be this sort of independent campaign organization. And he was looking to basically build a campaign war chest, and he gave this pitch to these guys. And several of them anted in with what ultimately proved to be very large donations. And one of them was this guy named Harold Simmons.

RAZ: Who is Harold Simmons?

HOMANS: Harold Simmons is - he was pretty well-known in business circles as one of the sort of corporate raiders of the mid-'80s. And sort of in his later years, he'd become a more kind of conventional businessman where he had this constellation of companies, you know, including many of these sort of big industrial properties. So there was a lead company, you know, sugar beet concern and nuclear waste disposal was his other big business - sort of big industrial businesses basically.

RAZ: We believe he is the single largest donor to Crossroads, the superPAC run by Karl Rove.

HOMANS: Yeah.

RAZ: But this is not the first time he's made waves in national politics, right? I mean, 2004...

HOMANS: Right. I mean, he's best known for being one of several very large donors to the Swift Boat Veterans for Truth, which, of course, was this group that came out of sort of nowhere in 2004 to challenge Senator John Kerry's record in Vietnam.

I mean, if you look at the people who donated to that campaign, they were, you know, several of these Texas guys who, you know, donated to Karl Rove campaigns in the past. And a lot of them are the very big figures in sort of the upper echelons of donors this year. If you look at the top of the list, it's got most of the Swift Boat Veteran donors are also on it. And Harold Simmons is one of them.

RAZ: And here's something interesting that I find articles that on the one hand, he's a huge contributor to these political superPACs; on the other hand, a huge philanthropist. I mean, he is one of the single biggest donors to the new sort of performing arts center in Dallas.

HOMANS: And many of the hospitals in the Dallas area.

RAZ: And hospitals.

HOMANS: He's contributed a great deal to medical research there too.

RAZ: Tell me about what it is that motivates him. Is he ideological?

HOMANS: It's hard to say because he gives very, very few interviews. And he gave an interview to The Wall Street Journal recently, which was the first, I think, he'd given to a major national newspaper in probably 10 years, something like that. And so you kind of have to go on the record of what he's done over the years. And he's been a reliable political contributor for quite some time now.

RAZ: Mostly to Republicans.

HOMANS: Yeah. And I think that, I mean, if you look at his record, you can make a pretty strong case that he's not a terribly ideological guy. He has sort of business-minded, kind of old-school conservative sensibilities, but in some respects, he's fairly socially liberal.

RAZ: Pro-choice, you write.

HOMANS: Yeah. He's described himself as saying he would probably be pro-choice if he had to pin himself down on the abortion issue. But he does have these business interests, many of which, as I said, sort of very large industrial properties, and they tend to, you know, come up against government regulation. And you can see how he learned fairly early on that it was important to have a say in the political process if his businesses were going to run the way he wanted to run them.

RAZ: You write that he is motivated in part by a commitment to free markets, open markets, free trade, less government regulation. That's really at the core of who he is, right?

HOMANS: Yeah. I mean, if you look at sort of his early business dealings, you know, there were cases where he described himself in these court documents that I was looking at, his reasoning for contributing all this money to politicians. And he talked about the fight that his companies had in Congress every year over issues like agricultural tariffs. And, you know, this was a case where he was coming down on the side of what would be called protectionism.

RAZ: He owned a sugar beet processing company, yeah.

HOMANS: Processing company, yeah. And, you know, their business was very much tied up in whether or not there would be tariffs on imported sugar. And so he was, in this case, you know, his interest in Congress was that these tariffs remain in place, which was...

RAZ: He wanted imported sugar to be taxed so he could be protected, his sugar...

HOMANS: Yeah. And his - and he said this, that his business would do quite poorly if they were to face that competition. So, yeah, he was pro-free market, except for when that got in the way of being in favor of his business interests.

RAZ: Right. How much money has he given so far...

HOMANS: I think...

RAZ: ...that we know of?

HOMANS: Yeah. That we know of, the number is sort of in the general neighborhood of 18, 19 million. You know, it's sort of dicey to really put a dollar figure on a lot of these big donors right now, because a huge amount of the money that's flowing into this race is going into these organizations that don't actually need to account for where the money's coming from. So that's sort of our best guess based on what he's told other reporters who he's spoken with and what's in the federal documentation right now.

RAZ: Talking to people who know him - and most of them talk to you on background because, as you write, they were afraid - they're essentially afraid of him - do you get the sense that Harold Simmons really believes this time, the amount of money he gives will have a proportional impact on the outcome in November?

HOMANS: You know, it's hard to say, but I think if you look back to 2004 - and one of his sort of close associates, you know, told me this - that the impact that the Swift Boat Veterans campaign had on the 2004 election was, you know, that was sort of eye-opening for him. And I think, you know, he's said in interviews that he regrets not spending more in 2008 and that he thinks he could have stopped the election of Obama in 2008.

And so I think that he's probably not inclined to make that mistake again. And based on what he's given so far, it seems like he's prepared to put a great deal of money into this race.

RAZ: Charles Homans wrote about Harold Simmons in a recent issue of The New Republic.

(SOUNDBITE OF MUSIC)

RAZ: Now, we wanted to speak with Simmons, but he wasn't available. So we went down the list of the top 100 individual donors to outside political groups until we reached...

(SOUNDBITE OF TELEPHONE RING)

UNIDENTIFIED WOMAN: Mr. Robertson's office.

RAZ: ...another billionaire. Hello. This is Guy Raz from NPR. Is Mr. Robertson available? Julian Robertson, who runs a hedge fund in New York. Hello, Mr. Robertson.

JULIAN ROBERTSON: Yes, sir.

RAZ: Hello. This is Guy Raz from NPR...

RAZ: Julian Robertson is number 16 on the list of the top individual donors in the U.S. this election year. He's given $1.25 million to Restore Our Future, a pro-Romney superPAC. And this is why.

ROBERTSON: I'm a little bit in the time of life when one thinks about giving away money, and I can't think of a more worthy cause than to try to get this country into the hands of the best possible man that can run it. I think Barack Obama is a smart man that the electorate put into power without any qualifications to run the biggest business in the world, which is the United States of America. I think he's shown that while he's been in there.

RAZ: Why not just give money to Governor Romney's campaign directly?

ROBERTSON: Well, I can't give very much. So I'm - this is the way I can - this way I give more money.

RAZ: As you know, there's a lot of - there's been a lot of conversations, discussions about all of the private money in politics this election cycle. What's your general feeling about it? Do you think that it is potentially a good thing for the future of America, or does part of it bother you?

ROBERTSON: Oh, I think part of it bothers us all. I mean, look, all I see is that here is a chance for me to effect a leadership change that is sorely needed in America, and I'm just taking advantage of that particular thing.

RAZ: Julian Robertson, he's currently among the largest individual donors to the pro-Romney superPAC Restore Our Future.

Coming up, Dave Levinthal, who covers money and politics for Politico, on just how much money is in the superPAC game.

DAVE LEVINTHAL: It's the American way. If you are successful, you have a lot of money, why should your ability to say what you want be any more limited than anyone else, even if we're talking about politics? And herein lies the crux of an argument that has been raging for years and certainly is going to rage for many years going forward.

RAZ: That's in the next part of ALL THINGS CONSIDERED from NPR News.

(SOUNDBITE OF MUSIC)

RAZ: It's WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Guy Raz.

Back to our cover story now about the money spigot and outside political groups. Here's a question: How many superPACS do you think there are in the country today? Take a guess. Fifty? Seventy-five? Here's Dave Levinthal, who covers money and politics for Politico.

LEVINTHAL: There's about 450, and that number is growing by the day. We'll see two, three, sometimes five, even eight, 10 superPACS show up in a given week, even in a given day. And it's something where people have really become very aware of the fact that, number one, they exist, and frankly, that it's not all that hard to form one.

RAZ: So we just heard about Harold Simmons. He's among the biggest fish in terms of donations to superPACs and so on this year. He and his wife have given a combined total of $19 million. Do we have an idea of the amount of total money people like him have contributed so far this election season?

LEVINTHAL: We do, and it's more than $100 million. And if you check back with me tomorrow, that number will probably have gone up in the interim. There's an incredible influx of money of this kind going into superPACs this election cycle.

RAZ: And the only thing that they cannot do is directly coordinate with a campaign.

LEVINTHAL: That's what the law says. You can't get into a boardroom with the campaign that you're supporting and...

RAZ: So Restore Our Future, which supports Mitt Romney, can't get into a boardroom with Mitt Romney's team and say, hey, let's talk about what we're going to do.

LEVINTHAL: And chart out a course and put marks on the calendar - can't do that. But what they can do is they can hire people who used to work with Mitt Romney or work with Barack Obama or work with any of the congressional candidates who are out there running right now.

RAZ: And, in fact, Restore Our Future is run by people who did work on Romney's campaign.

LEVINTHAL: As is Priorities USA, the Democratic superPAC that's...

RAZ: Run by Bill Burton.

LEVINTHAL: ...run by Bill Burton and Sean Sweeney who used to work in the White House with Barack Obama. So both sides are doing this. Now, the Republicans have really been much quicker to the punch to embrace the new rules and regulations that now exist in the United States that have ushered this era in.

RAZ: How much more money is going to Republican and conservative-leaning groups than to Democrat-leaning groups?

LEVINTHAL: Oh, it's about a 10-to-1 proposition.

RAZ: Wow.

LEVINTHAL: And again, that ratio is changing, but it definitely has allowed the Republicans to have a massive footprint when it comes to the amount of outside money flowing into the presidential race and also to some key Senate and congressional races.

RAZ: OK. The Obama campaign has something like $100-plus million cash on hand and the Romney campaign has far, far less. The question is, does that matter?

I mean, if Restore Our Future, the Romney PAC or Crossroads, which is the Karl Rove PAC that supports - is going to support Romney, if those superPACs have a combined amount of, let's say, 50, $100 million, does it really matter how much money Obama has or Romney has in their own campaigns?

LEVINTHAL: Well, you talk to a lot of Republicans and they say, hey, this is great because we are running against a candidate in Barack Obama who is the most successful fund-raising candidate in the history of the United States, having spent more in the 2008 presidential election than any other candidate, any other presidential candidate or otherwise.

So in a way, they see this as an opportunity for people to really play a much more significant and greater role in American politics in a way that goes above and beyond what the candidates themselves are doing with their individual operations.

RAZ: Every election year, more money is spent by the primary candidates. This year, with many of the restrictions lifted, when you factor in what the candidates are spending and the outside groups are spending, I mean, how much money could this all total up to?

LEVINTHAL: Without question, this is going to be the most expensive federal election cycle in U.S. history. And what is that going to mean for the average voter? Well, you're going to see many more television ads, even more so than you probably ever thought that you could. You're going to hear them on the radio. Your favorite websites are going to just be plastered with digital advertisements.

So if your eyes can see it, candidates are probably going to go after that platform with as much advertising as they can possibly afford or, for that matter, superPACs can go after those platforms with as much money as they can afford.

RAZ: That's Dave Levinthal. He covers money and politics for Politico. Dave, thanks so much.

LEVINTHAL: Thank you. Transcript provided by NPR, Copyright NPR.

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