The top 50 political donors gave more than $440 million to the people and groups pushing candidates for state office in 2014, according to an analysis by the Center for Public Integrity. Here’s a look at who the kingmakers were.
The top 50 political donors gave more than $440 million to the people and groups pushing candidates for state office in 2014, according to an analysis by the Center for Public Integrity. Here’s a look at who the kingmakers were.
If money is influence, the Republican Governors Association wielded more of it than anyone else last year in state elections nationwide.
The group, led in 2014 by New Jersey Gov. Chris Christie, gave roughly $69 million to candidates, political parties and independent groups — more than double its Democratic counterpart — as it tried to elect Republicans to the top office in as many states as possible. The group gave more than any other donor to state-level elections last year — from races for governor to legislator to supreme court justice.
The association applied an effective strategy that’s becoming more common: giving money using multiple paths to circumvent limits on campaign contributions to candidates and parties, a Center for Public Integrity analysis has found.
In addition to the money it spent directly on TV ads and other campaign efforts, the group gave about $14 million to candidates including Illinois’ new Republican Gov. Bruce Rauner. It also gave more than $3 million to state parties, including those in Texas and Maine.
The bulk of the checks it wrote, however, totaling about $50 million, went to other political groups that in turn spent the money on state races.
Its efforts largely paid off. Republicans gained four governorships in 2014 and only lost two, leaving them holding the reins in 31 states.
The group “was designed to supplement what candidates could do on their own in the states,” said Dick Thornburgh, a former Pennsylvania governor who turned the association into a powerhouse in the mid-1980s. “Obviously, it’s grown beyond that.”
Its competitor, the Democratic Governors Association, gave $32 million and ranked second among the sugar daddies of 2014, according to the Center for Public Integrity’s analysis. The group only picked up one new governor’s mansion, with Pennsylvania’s Tom Wolf defeating incumbent Republican Tom Corbett. (Alaska’s Republican incumbent was beaten by an independent, Bill Walker.)
Together, the two governors’ groups and other national political organizations gave significantly more than political parties, unions, multimillionaires or corporations that also contributed heavily to influence state-level campaigns. The donations went beyond races for governor. The funds made their way into lower-ballot contests such as attorney general, state supreme court justice and state legislator.
The national groups also cropped up on the lists of the biggest donors in most states, outgiving homegrown political players in a sign that all politics may now be national.
In all, the top 50 political givers spread more than $440 million to the people and groups pushing candidates for state office, the Center for Public Integrity found. The list is thick with billionaires such as former New York City Mayor Michael Bloomberg, unions such as the American Federation of Teachers and corporations such as telecom titan AT&T Inc.
They also were more successful in backing winners than most donors, becoming the de facto kingmakers of state politics.
“It’s an amazing amount of power concentrated in a handful of organizations,” said Ed Bender, executive director of the National Institute on Money in State Politics that collected some of the data used for the analysis. “If people want to understand why government is dysfunctional, you don’t have to look much farther than this list.”
The Citizens United effect
To identify the kingmakers, the Center for Public Integrity looked at donations given to 2014 state candidates and political parties during 2013 and 2014, as tracked by the National Institute on Money in State Politics. Reporters also collected state and federal contribution records for 140 independent organizations that aired political TV ads during 2014 state elections.
The analysis does not include funders of groups that don’t disclose their donors to any state or federal agencies — so-called “dark money” groups. And it does not total overall contributions, because some donors received money from other donors on the list. [More details on the methodology.]
The findings paint a picture of independent groups playing a bigger role in financing state-level elections than even political parties or the candidates’ campaigns, one effect of the landmark U.S. Supreme Court case Citizens United v. Federal Election Commission. The 2010 ruling allowed many groups to accept and spend unlimited amounts of money from corporations, unions and wealthy patrons to influence elections as long as they did not coordinate with the candidates. Thus, they could bypass limits on giving to a candidate or political party and leapfrog ahead.
The top 50 donors identified by the Center for Public Integrity gave more than 40 percent of their contributions to independent political groups, surpassing what they gave to either candidates or political parties.
The strategy allows donors to multiply their influence, said Larry Noble, former general counsel of the FEC who now works as an attorney at the Campaign Legal Center.
“You give the maximum to the candidates, but then you want to give more,” he said. “You give to the party committee that’s also going to support the candidate. You give to outside groups that are also going to support the candidate.”
The mega-donors thus control more of the political messages that determine which issues are central to the campaign — roles previously played by candidates and political parties. And in exchange, they may expect the newly elected officials to dance with the ones that brought them.
Behind the curtain
National political groups have their own heavy-hitting donors. But because the groups function as the middlemen of political giving, voters often don’t know the original source of the cash behind a politician’s election.
The Republican Governors Association, for one, served as a conduit for billionaires and corporations looking to influence governors’ races.
The five largest contributors behind the group’s gargantuan giving power all appear separately on the Center for Public Integrity’s top 50 donor list: Las Vegas casino magnate Sheldon Adelson; billionaire David Koch, who runs the Kansas-based Koch Industries with his brother; electricity giant Duke Energy; investment firm ETC Capital, whose founder, Manoj Bhargava, also founded the company behind the 5-Hour Energy drink; and billionaire hedge-fund manager Paul Singer, according to IRS records from 2013 and 2014.
Meanwhile, four of the five largest contributors to the counterpart Democratic Governors Association were also familiar names from the top 50 list: Michael Bloomberg and branches of three labor unions — the American Federation of State, County and Municipal Employees, the National Education Association and the Service Employees International Union.
The Republican and Democratic governors’ associations employ another common strategy that both amplifies and obfuscates their giving: contributing to “an outside group with a good-sounding name” to make support of a candidate look more diverse and to help attract different constituencies, Noble said.
For example, state records collected by the Center for Public Integrity show that the Democratic Governors Association gave more than $6 million to a group called Making Colorado Great, while the Republican Governors Association gave nearly $5.5 million to Grow Connecticut. The Colorado and Connecticut organizations then spent millions airing TV ads in their states’ respective gubernatorial contests.
“It’s name branding,” Noble said. “If you were a teacher and you see an ad from a teachers union, you’re going to give it a lot more credibility than an ad from the DGA.”
Diverse giving becomes trendy
All but a handful of the top 50 mega-donors used more than one avenue to spread their gifts. And most gave money to influence races in more than one state.
Billionaire hedge-fund manager Kenneth Griffin, for example, gave more than $4.6 million before the election to the campaign committee of Rauner, the Illinois Republican gubernatorial candidate, according to data from the National Institute on Money in State Politics.
Worth about $5.5 billion, according to Forbes, Griffin and his soon-to-be ex-wife Anne also gave at least $2.2 million to independent political groups that backed state candidates, such as the Republican Governors Association, and more than $500,000 to state GOP parties in Illinois and Florida.
A representative for Griffin declined to comment.
Some of the top donors also gave widely. Sixteen of the top 50 contributors gave to 50 or more state-level candidates running in 2014.
Getting what they paid for
Nearly 85 percent of the candidates backed directly by the top 50 donors won their elections in 2014, a far better success rate than the typical political contributor, who backed winners only 52 percent of the time.
Duke Energy, for example, had a 94 percent success rate after supporting 381 different candidates.
For corporations, in particular, political giving is a way to ensure a seat at the table once a lawmaker is elected, said Loyola Law School Professor Justin Levitt. Giving across the aisle improves their odds of having an ally in office come January.
“They’ll give to the incumbent and also the challenger just in case the challenger wins,” Levitt said. “They’ll give more to leadership positions because leadership positions are gateways to access for committees, for legislation, for broader regulation.”
Mass media giant Comcast picked winners in 93 percent of the more than 1,000 candidates it backed. It gave nearly $1.7 million directly to candidates, spreading it widely in 36 states.
“The contributions that the company makes are because we operate in a highly regulated industry,” said Comcast spokeswoman Sena Fitzmaurice, adding that most candidates backed are incumbents. “The decisions that are made by legislatures control our business.”
In addition to its national giving, the Philadelphia-based Comcast gave heavily in its home state. Top recipients were Gov. Tom Corbett and running mate Jim Cawley, both Republicans, who together raked in $107,000 from the state’s top broadband provider but lost re-election. Hedging its bet, Comcast also gave $1,000 to Wolf, who won the governorship from Corbett.
Duke Energy, another company regulated by states, divvied up more than $500,000 among the hundreds of candidates it backed, many of whom ran for office in North Carolina, where the company is headquartered.
Additionally, the electric utility donated more than $210,000 to the Republican Party of Florida, according to the National Institute on Money in State Politics. Duke Energy may have been trying to boost its support in the Sunshine State, where it has faced massive criticism for charging customer fees for nuclear plants that do not — and may never — provide power. Florida’s governor and legislature are responsible for naming the members of the commission that regulates the utility and allows such fees.
“We do not make contribution decisions on single issues,” Duke Energy spokesman Chad Eaton said. “Our employee-led PAC considers an array of issues before any decisions are made.”
In general, he said, Duke Energy donates to candidates who demonstrate “support for public policy issues that are important to our business, customers and communities” in the six states where it provides electricity.
The International Brotherhood of Electrical Workers, meanwhile, gave nearly $2.7 million to 568 candidates in 34 states and had a 64 percent win rate. It contributed more than half million dollars to Democrat Pat Quinn’s failed bid to retain the Illinois governorship, but saw more success with the $410,000 it gave to Wolf’s successful run for governor in Pennsylvania. In both states, the Republican opposition had supported scaling back public pensions or preventing unions from deducting union dues directly from members’ paychecks.
Money does not always guarantee a win, of course, and a lack of funds doesn’t necessarily foretell a loss.
In Maryland’s governor’s race, former Lt. Gov. Anthony Brown, a Democrat, outraised Republican Larry Hogan several times over yet lost in one of the biggest upsets of election night. Brown was hurt by low popularity ratings that no giant war chest could fix, according to Todd Eberly, a political science professor at St. Mary’s College of Maryland. And because Hogan accepted public funds for his campaign, he was limited on how much money he could spend yet also freed up to spend time on the campaign trail, not the fundraising one.
And some of the top benefactors saw little return on their campaign investments.
Billionaire physicist Charles Munger Jr., son of the Berkshire Hathaway executive of the same name, gave nearly $300,000 to 45 Republican candidates in 2014. Only 13 won for a 29 percent success rate.
The nation’s largest teachers union, the National Education Association, also fared poorly when backing candidates directly — only three of their 13 candidates won.
Allies in office
Most of the more than 6,300 state officials elected in November began work this month, shaping and creating policy across the country in 50 governors’ mansions and 99 legislative chambers — 11 of which flipped from Democratic to Republican control in the 2014 election.
For some big donors, that means the candidates they backed can now fight for their causes in state office. Or they might just be more willing to take a phone call from a benefactor who has a legislative wish list.
Noble said candidates typically know which donors they have to thank for their success — even when patrons filter their donations through independent groups.
And now, for some top givers, the real campaigning is about to begin.
Rauner, the newly sworn-in Republican governor, for one, is already gearing up for battles with the veto-proof Democratic-controlled legislature in Illinois as he pushes his stated goals of plugging the state’s budget deficit and strengthening ethics laws. He isn’t just counting on good will or smooth talking to win over potentially reluctant legislators. He’s counting on cold, hard cash to help make the case.
Rauner and two top donors, Griffin and shipping supply magnate Richard Uihlein, poured $20 million into the governor’s campaign committee in the final two days of 2014, which Rauner reportedly plans to use to back other candidates who support his policies.
Rauner’s new war chest will enable the new governor to be in a state of “perpetual campaign” — to air commercials aimed at persuading state legislators or to donate to other lawmakers’ re-election campaigns in exchange for support of Rauner’s agenda, said Christopher Mooney, director of the Institute of Government and Public Affairs at the University of Illinois, Springfield.
In the past, a governor might have promised state legislators financial backing for development projects in their districts or helped them acquire contracts or new jobs.
“Instead of building somebody a playground in the school, he’ll be able to donate money to their campaign,” Mooney said.
And if they don’t do want he wants? “He’ll be able to fund an opponent,” he said.
Long before the campaign buttons and bumper stickers, today’s presidential candidates must create an outside fundraising committee. And while they aren’t always in total control of these groups, the names can be secret decoder rings that explain the central themes of the campaigns they are preparing.
Here’s a look at the names of five groups backing 2016 candidates and what they might signal.
Right to Rise
What is it? A leadership PAC and a separate super PAC
Who does it benefit? Former Republican Gov. Jeb Bush of Florida
Where does the name come from? The “right to rise” was coined by a historian to describe President Lincoln’s views on economic opportunity. After Rep. Paul Ryan used the phrase, Bush wrote a guest editorial about it in the Wall Street Journal in 2011.
What’s it mean? The name is a sign that Bush intends to focus on pocketbook issues for the middle class, which has been stuck with stagnant wages for more than a decade. The fact he embraced the term was also a key tipoff that Ryan was not going to run.
Our American Revival
What is it? A tax-exempt 527 organization
Who does it benefit? Republican Gov. Scott Walker of Wisconsin
Where does the name come from? Walker used the phrase “our American revival” in a recent statement critiquing President Obama’s State of the Union speech.
What’s it mean? The term “revival” has religious undertones that Walker, a preacher’s kid, surely recognizes. It’s also a sign he intends to run as a bold, populist counterpoint to Obama’s tenure in Washington.
Leadership Matters for America
What is it? A political action committee
Who does it benefit? Republican Gov. Chris Christie of New Jersey
Where does the name come from? Christie used the phrase “leadership matters” during his 2012 keynote speech at the Republican presidential convention for Mitt Romney.
What’s it mean? Christie is running on his own personality and leadership style. He intends to highlight his time as governor as well as his brash and sometimes confrontational style to contrast himself with Obama and his Republican opponents.
Stand for Principle
What is it? A super PAC
Who does it benefit? Republican Sen. Ted Cruz of Texas
Where does the name come from? In a 2014 speech before the Conservative Political Action Conference, Cruz argued that Republicans need to “stand for principle” in order to win elections.
What’s it mean? Cruz intends to run as the conservative choice among the Republican field, with an orthodoxy at the center of his message that will contrast him against past nominees such as Mitt Romney and John McCain, not to mention current contenders like Christie and Bush.
Ready for Hillary
What is it? A super PAC
Who does it benefit? Former Secretary of State Hillary Clinton
Where does the name come from? The super PAC was formed by Clinton supporters to build lists of grassroots supporters and recruit major donors before she announced a campaign.
What’s it mean? The name doesn’t portend much about Clinton’s campaign, since she didn’t choose it, at least not personally. But it does take on a central theme of the emerging Clinton juggernaut—the notion that America is now “ready” for a female president and that it’s Clinton’s turn after her 2008 primary loss.
Three likely presidential candidates defended the growth of outside spending in politics Sunday evening at a forum hosted by a group affiliated with the billionaire Koch brothers.
The “American Recovery Policy Forum” hosted by Freedom Partners Chamber of Commerce featured Senators Ted Cruz, Rand Paul and Marco Rubio making their case to an audience of well-heeled business owners and featured sharp divisions over foreign policy. But one area of agreement a defense of the rights of billionaires and millionaires who are playing an ever larger role in the political system.
“Do you think there is too much influence in politics by super wealthy donors on both sides,” ABC News’ Jon Karl asked the presidential hopefuls in his final question as moderator. “As opposed to Hollywood or the mainstream media, you mean, or other multi-million dollar entities that try to influence American politics everyday,” Rubio asked, eliciting the loudest applause of the night.
“I believe in freedom of speech: I think that political spending and political activism is a form of protected speech,” Rubio said, noting that Democrats have billionaire environmentalist Tom Steyer supporting their efforts. “The people who seem to have a problem with it are the ones who only want unions to be able to do it, their friends in Hollywood to be able to do it, and their friends in the press to be able to do it,” he added, to another big round of cheers.
Sen. Ted Cruz then got in on the action, lambasting Senate Minority Leader Harry Reid for his longstanding attacks on the Kochs, whose network is a powerhouse on the Republican side. “There are a bunch of Democrats who have taken as their talking point that the Koch Brothers are the nexus of all evil. Harry Reid says that every week. Let me be very clear: I think that is grotesque and offensive.”
“I would love to see more and more conferences five times this size, 10 this size, of citizens of small business owners across the country fighting to change the direction,” Cruz added.
Karl then asked the three whether they would guarantee that their supporters would not have special access to them should they win the White House. Rubio, speaking for the three, said that doesn’t happen. “We run for office and people buy into our agenda,” he said. “Most of the people who support us support us because they agree with what we are doing, not because we agree with what they’re doing.”
Sen. Rand Paul indicated he would support a narrow effort at campaign finance reform to restrict the political activities of those seeking government contracts.
“Special interests can have a bad influence on government,” he said. “The special interests that I’m concerned about are those who do business with government, get government contracts, get the government money, and then try to get more contracts. And I am for some limitations.”
Presidential candidates-to-be, and a passel of well-known clingers on, converged in Iowa this weekend with all the flash and fun the nation has come to expect of the Grand Old Party.
Wisconsin Governor Scott Walker, New Jersey Governor Chris Christie, former Arkansas Governor Mike Huckabee and former Hewlett-Packard CEO Carly Fiorina managed substantive introductions, alongside businessman Donald Trump, who declared there is “nobody like Trump,” and Sarah Palin, who struggled with diction and metaphor, offering phrases like “We don’t sit on our thumbs this next time when one of our own is being crucified.”
The real action, however, lay elsewhere, off the stage and out of sight, in an invisible primary taking place behind closed doors in states not known for their place in the nominating calendar. Candidates have been crisscrossing the nation and working the phones, dialing for dollars and loyalty in a contest that may prove far more consequential than speech that can be given before any crowd at this point.
The goal is not to win votes, but to win the support of Republicans like Bobbie Kilberg, who hosted an off-the-record event in Virginia for Christie last week with 96 corporate technology leaders. In recent months, she has taken not one, but two calls from Mitt Romney informing her of her thinking, as he edges toward another campaign. And having worked for the administrations of both Presidents Bush, she feels a special affinity for former Florida Governor Jeb Bush, whose son, George P. Bush, she recently supported in his race for Texas land commissioner.
“I have three wonderful friends in this race,” said Kilberg, who runs the Northern Virginia Technology Council, but supports candidates only in a personal capacity. “My expectation is that all three of them will run.”
But the physics of political fundraising does not allow for her fealty to be equally divided for long. Connecters like Kilberg now face enormous pressure to decide on a single candidate to benefit from their vast Rolodexes. “I think there is enough donor bandwidth for all three of them in the center right lane,” Kilberg explains of the three candidates. “The finite group are the bundlers.”
Securing the 2012 nomination cost Romney $76.6 million, raised in increments up to the legal limit of $2,500. His super PAC, Restore Our Future, which could accept unlimited contributions, added nearly $50 million to the tally.
Operatives affiliated with multiple campaigns say candidates will need at least $50 million to win the nomination this time around, but predict more of the spending will tilt toward the outside groups.
Bush, Romney and Christie are especially squeezed by the fundraising pressures, as their candidacies are set to rely heavily on their predicted ability to match Hillary Clinton’s formidable potential. The early start to the race — candidates are traveling the country earlier and more frequently than ever on the Republican side — adds strain across the board. Complicating matters further are changes to the nominating calendar with fewer debate opportunities and a compressed timeline that favor well-funded candidates once voters get to the polls.
Kilberg and her husband Bill, a prominent Washington lawyer, helped bundle together more than $100,000 in checks of less than $2,000 in 2004 for George W. Bush. In 2012, she helped lead Mitt Romney’s fundraising in Virginia, bringing in a reported $322,000 at just one event at her home. The Tuesday event Kilberg had with Christie and northern Virginia technology executives was not a fundraiser, she said, but a get-to-know-you session.
At almost the same time the event was happening, Bush was meeting in the offices of Dirk Van Dongen, a Republican fundraiser who runs the National Association of Wholesalers. Dongen, a Washington fundraiser for another White House aspirant, Marco Rubio, plans to support Jeb Bush this time, if he runs.
The Bush events were not fundraisers either, though forms were distributed inviting donors to begin bundling for Bush’s new political action committee, Right to Rise. The main purpose, as with the Virginia events, was to win over the networkers who traditionally hold the purse strings of presidential politics. According to people who attended, Bush spoke broadly about his views of the country and the best way to approach the presidential race. He said a winning candidate would have to connect with middle-class anxiety by walking in the shoes of regular people, said one attendee.
“The contrast was obvious,” the attendee said, explaining how Bush appeared to be contrasting himself with Romney’s 2012 campaign. “That’s 100 degrees from the 47% comment.”
Romney, meanwhile, has been reactivating his own donor base, having chosen a donor event in New York early in the month to formally announce his decision to begin pursuing a third presidential campaign. The former private-equity executive has been working the phones since then, telling donors he is serious about considering another bid.
Senator Marco Rubio, meanwhile, held his annual retreat for his top donors in Miami over the weekend, a move designed to keep his loyalists close while he considers his options. He later joined fellow Senators Ted Cruz and Rand Paul on stage in Palm Springs at the winter meeting of the Freedom Partners Chamber of Commerce, a spending vehicle for the billionaire GOP megadonor Koch brothers and their allies. Also in attendance, after a well-received appearance in Iowa, was Walker, who was making the first stop on a multi-day West Coast fundraising swing for his new fundraising committee, which will be announced as soon as Monday.
While Republican voters have more than a year to decide on the candidate they want to take on Democrats in 2016, the donors clock is ticking. Quarterly fundraising totals, which will come out early this summer and again in the fall, will help shape the race, determining which candidates have the money to mount serious contests, with the grassroots organizing ability and television firepower to withstand the early contests.
“It’s really what we would call in the business a pre-sell,” says a senior Republican strategist about Bush’s visit to Washington this week. “They’ll come back in the next 60 days and do some big fundraising, and they’ll hope to get a lot of those same people to be on their committee.”
For those keeping score, the results of such appeals will be the ones that count, not the applause of activist crowds. In this democratic process, the voices of the people only matter after the first waves of money have been counted.
It will take hundreds of millions of dollars to win the White House in 2016, and by that measure, Republican Mitt Romney is off to a rough start.
The 2012 Republican nominee is struggling to secure the financial backing even of the people who were his staunchest supporters.
The Center for Public Integrity in recent days attempted to contact roughly 90 top Romney fundraisers from his most recent presidential run, including every federal lobbyist who helped him raise $30,000 or more.
The vast majority willing to speak on the record say they haven’t decided whom to support in 2016. Almost all of these fundraisers said they’re wrestling with conflicting loyalties to Romney, former Florida Gov. Jeb Bush and other potential Republican hopefuls such as Sens. Marco Rubio and Lindsey Graham and Govs. Mike Pence, Scott Walker and Chris Christie.
If Romney hopes to win the nomination, he’ll have to work overtime to reconstitute the fundraising network that fueled his most recent White House bid and beat back potential competitors. Bush, in particular, is already trying to poach key Romney supporters who have the potential to raise, or “bundle,” millions of dollars for the candidate they ultimately decide to support.
To wit: Bush spent Tuesday afternoon courting some of Washington’s most powerful lobbyist-donors — including many top Romney 2012 fundraisers — around a dark-wood oval table in the bare-walled conference room at the offices of the National Association of Wholesaler-Distributors.
No food was served, but the presidency was on the table.
Bush provided fundraising-related material to those who wanted it. The material included fundraising tiers for his two recently formed political vehicles — a leadership political action committee and a super PAC. A person who was at the event said the top tier reached $500,000.
“Obviously, I’m biased, I’m supporting Gov. Bush, but I think if you were to talk to folks other than me that were in attendance they would say that he was impressive,” said Dirk Van Dongen, the president of the National Association of Wholesaler-Distributors, who organized the meetings.
Van Dongen, who raised more than $1.4 million for Romney’s campaign in 2012, said he is supporting Bush this time because of “a long-standing commitment.”
The meeting also provided Bush a chance to convince potential bundlers he could run a strong campaign. Multiple attendees say he did that, although several said they left the gathering still uncommitted.
At least one attendee said he was extremely impressed by Bush but added it’s difficult to raise large sums of money for someone who is not yet a declared candidate.
Bush spoke about his background in key national issues such as education and immigration reform and referred graciously to potential opponents, including Romney, while making the case that he could best connect with the electorate, according to two people who were there.
Representatives for Bush and Romney could not be reached for comment Thursday.
During the 2012 election cycle, Romney spent $104 million through the end of May, the period when he was working to clinch the nomination, according to the Center for Responsive Politics, which tracks campaign finance data.
Romney’s own campaign committee raised $446 million during the full 2012 election cycle, according to the Center for Responsive Politics, and President Barack Obama’s campaign committee raised $715 million for his successful re-election. To pull in such massive amounts of money — which doesn’t include party, super PAC or nonprofit cash — candidates need bundlers.
Romney does have some committed backers.
“I’ve been a strong supporter since day one of Mitt’s efforts, and I have made it clear that I wouldn’t … commit to any other candidate until Mitt decided what he wanted to do for 2016,” said Mark Baker, a Montana lawyer who was Romney’s Montana finance chairman in both 2008 and 2012 and bundled nearly $500,000 for the 2012 campaign.
Baker said he’s heard from members of Romney’s “inner circle” about the possibility for another run and has been reaching out to other donors in an attempt to hold support steady.
“People have contacted me, and I’ve contacted others,” he said, adding that he hasn’t yet organized any events. “Generally, there’s a lot of support for Mitt. A lot of folks who were supportive in 2012 certainly feel that we would be in a much better place as a nation had Mitt been elected president. I think there’s a lot of excitement about the potential that that could happen in 2016.”
Another high-profile bundler, lobbyist Bill Simmons of Dutko Grayling, told USA Today he would back another Romney run. He raised nearly $1.3 million in 2012.
Many other former Romney supporters, however, aren’t on board — at least not yet.
In interviews this month with the Center for Public Integrity, several ticked off long personal histories with both Bush and Romney. A few confirmed they’ve committed to other potential presidential candidates. Others signaled they’re still deciding.
Take Wayne Berman, a former lobbyist who is now a senior adviser for global government affairs at private equity company Blackstone Group. He raised nearly $500,000 for Romney in 2012 but now confirms he’s backing Rubio.
Texas developer Harlan Crow, a major donor in 2012 to Restore Our Future, a pro-Romney super PAC, is also still on the sidelines.
Robert Grand, the Indianapolis-based managing partner of Barnes & Thornburg, raised more than $1 million for Romney during the 2012 cycle. He is also uncommitted, and confirmed in an email that he is waiting to see if Pence, the governor of Indiana, becomes a candidate.
Annie Presley, the national deputy finance director for George W. Bush’s 2000 presidential campaign, raised $53,000 for Romney during the 2012 cycle. She said she hasn’t heard from any candidates yet but likely will when they work their way around to her home state, Missouri. She is still uncommitted, and said she is impressed by both Bush and Romney.
“Either of them would make excellent presidents,” she said, but mused aloud about the possibility of a run by California businesswoman and former U.S. Senate candidate Carly Fiorina.
Van D. Hipp Jr., chairman of consulting firm American Defense International and a former chairman of the South Carolina Republican Party, said he thinks the array of choices “shows the strength of the Republican field.” He served on Romney’s finance team in 2012 but hasn’t committed to Romney in 2016.
“I’ve got several friends looking at it mighty strong. I think the world of Romney,” Hipp said, while noting his ties to other prospective candidates, including Bush, Ohio Gov. John Kasich and former New York Gov. George Pataki.
Add Graham, the U.S. senator from South Carolina, to Hipp’s mix, too.
“I’ve talked with some folks in South Carolina this past week who said they had gotten phone calls [from Graham] telling them, quote, to keep their powder dry,” he said. Hipp says he personally hasn’t yet heard from Graham, but added, “we go back a long ways and he’s a good friend of mine.”
Someone who has been in touch with Graham: David Wilkins, who leads the public policy and international law group at Nelson Mullins Riley & Scarborough.
Wilkins bundled $87,000 for Romney in 2012. He was the state chair of the Bush-Cheney campaign in 2004 and was an ambassador to Canada under President George W. Bush. “I have great admiration and respect for Gov. Bush, but until Lindsey makes a decision, a lot of us are — we’re for Lindsey Graham,” Wilkins said.
Despite modestly describing himself as “way down the totem pole” of fundraising, Wilkins acknowledged he’d heard from people representing multiple candidates, including Bush.
Christie, the New Jersey governor, has also scored former Romney fundraisers: billionaire Home Depot co-founder Kenneth Langone is one of them, according to news reports, as is Dallas investor Ray Washburne, who reportedly stepped down as finance chairman of the Republican National Committee to headline Christie’s bid.
’I want to hear everyone out’
Gaylord T. Hughey Jr., a prominent campaign cash bundler from Texas, said he has heard from and met with “several” potential presidential candidates or their representatives.
None have yet won his support.
Hughey explained he’s looking for a candidate with “integrity and vision and policy positions that a majority of the voters can agree with … electability is obviously there but you also have to have a man of character and vision and principle that can be elected. I want to hear everyone out before I commit my time and resources to supporting an individual candidate.”
Hughey bundled more than $350,000 for Romney’s 2012 campaign. He also raised money for Texas Gov. Rick Perry, another possible 2016 presidential candidate, when Perry ran for president during the 2012 election cycle. Furthermore, he raised more than $200,000 for Bush’s brother, former President George W. Bush, during his 2004 campaign.
Hughey has also contributed to Sen. Ted Cruz of Texas, who is also reportedly eyeing a presidential run.
Asked about the number of potential candidates with Texas ties, Hughey said, wryly: “They all have Texas ties to the degree they want to raise campaign funds.”
David Beightol, a lobbyist who attended the meeting with Bush, raised nearly $1.6 million for Romney’s 2012 campaign, the second-highest amount on the lobbyist bundler list.
“I’ve got a really difficult decision” between Romney and Bush, Beightol said.
Beightol said he has not yet heard from Romney’s team. As for Bush’s organization: “The work ethics and the team that he’s building is the most aggressive that I’ve ever seen at this stage.”
Others agreed the race was getting underway early.
“I don’t think any of these guys have gotten into serious fundraising yet,” said Ken Kies, a lobbyist with Federal Policy Group who raised nearly $73,000 for Romney. “They are at a relatively early stage. Having said that, I think things will pick up fairly soon.”
Kies says he remains uncommitted.
Former Kansas Gov. Bill Graves, now the president and CEO of the American Trucking Associations, said he, too, has deep ties to both Bush and Romney.
Graves raised nearly $1.8 million for Romney in 2012, the highest amount on the list of lobbyist bundlers disclosed by the campaign. He also met with Bush on Tuesday in Washington, D.C.
He originally met Jeb Bush while working on former President George H.W. Bush’s 1980 campaign, which Graves describes as his “first political endeavor.”
Graves said he has heard from both the Bush and Romney camps and is still uncommitted.
Three Republican presidential hopefuls will address a gathering affiliated with billionaire Republican mega-donors Charles and David Koch this weekend, as they look to shore up financial backing in advance of their White House bids.
Texas Sen. Ted Cruz, Kentucky Sen. Rand Paul, and Florida Sen. Marco Rubio will attend the Freedom Partners Chamber of Commerce’s inaugural “American Recovery Policy Forum” on Sunday evening at the group’s annual winter meeting in Palm Springs. The closed-door event will bring together roughly 450 top donors and business leaders, the group said, and comes as it prepares to take on a more public role in the national political debate.
The trio will share the same stage for a discussion moderated by ABC News chief White House correspondent Jonathan Karl, Freedom Partners said, with the discussion focusing on economic issues, energy, healthcare, and as well as improving the GOP’s brand and bringing its message to non-traditional audiences.
“Our members care deeply about the future of our nation and we’re honored to host some of today’s most influential and respected leaders in shaping public policy,” Freedom Partners spokesman James Davis said in a statement. “We hope that this panel will give each participant the opportunity to lay out their vision of free markets and the role of government. Our goal in 2015 is to help inform the national debate around key domestic economic issues, and this forum is the beginning of that conversation.”
POLITICO, which first broke news of the senators’ attendance last week, reported that Wisconsin Gov. Scott Walker is also set to attend the gathering, but he will not appear at the forum.
The Koch-backed free market group released a Plan for Economic Growth last week which calls for balancing the federal budget and cutting back regulations.
The U.S. Supreme Court appeared to be divided on Tuesday over whether elected judges should be allowed to directly solicit campaign contributions in the latest campaign finance case to come before the high court.
Central to the case, Williams-Yulee v. The Florida Bar, is the question of whether Florida’s ban on judicial candidates from personally soliciting contributions is a lawful infringement on their free speech rights. If the court strikes down the ban, the decision could upend similar limits in 29 other states.
Proponents of the ban argue it protects the judiciary against quid pro quo exchanges between judges and the lawyers and litigants who donate to their campaigns, then appear before them in court.
Critics suggest that in the 39 states that elect judges, judicial candidates should be given the same free speech protections as candidates for legislative and executive offices where such personal pleas for assistance are standard.
The case stems from the 2009 campaign of Lanell Williams-Yulee, who signed a mass-mailed letter asking for contributions as she sought a county court judgeship. The Florida Supreme Court disciplined her with a reprimand and fine after The Florida Bar argued that her letter violated the state judiciary’s personal solicitation ban.
A majority of the justices seemed to agree that personal solicitations from judges and judicial candidates had a greater impact than financial requests from a separate campaign committee — an argument that may favor limiting what judges can do.
“When the judge says, ‘Can you please [give money to my campaign]?’ the answer is yes,” Justice Stephen Breyer said. “And if it’s the campaign manager, perhaps the answer is ‘no.’”
Representing Williams-Yulee, Andrew Pincus argued Florida’s ban amounted to hairsplitting. Thank-you notes from judges to donors, for example, are permissible.
“Once Florida says thank-you notes are okay, it can’t ban solicitations,” said Pincus.
However Breyer appeared to disagree. Writing a thank-you note, Breyer said, did not “put pressure” on an individual to the same degree as the initial ask for funding.
Pincus argued that Florida’s $1,000 contribution limit to candidates is an adequate protection against the type of corruption that could result from a judge directly asking a donor for money.
On the other side, Barry Richard, arguing for The Florida Bar, said that the Florida ban provides a vital block to the “direct link that threatens quid pro quo corruption,” coercion and judicial impartiality.
Richard said the law did not significantly impede judicial candidates’ First Amendment rights. The only speech restriction judicial candidates face, Richard said, was that the law says: “You can’t say to me, ‘Give me money.’”
Justices Breyer, Elena Kagan, Sonia Sotomayor, and Ruth Bader Ginsburg appeared sympathetic to the state’s efforts to insulate judicial candidates from the influence-peddling faced by candidates for legislative and executive offices.
Justices Samuel Alito, John Roberts and Antonin Scalia appeared sympathetic to the First Amendment arguments presented on behalf of Williams-Yulee. Justice Clarence Thomas, a member of the court’s more conservative-leaning bloc, did not ask any questions during oral arguments.
Roberts said that The Florida Bar was “under a great burden” to make its case without compromising the First Amendment.
Scalia also suggested that if lawyers were among the largest donors to judicial candidates that didn’t necessarily show corruption. Lawyers’ tendency to give in judicial races could show that “lawyers care more about electing good judges than the average citizen.”
Justice Anthony Kennedy, who could become the swing vote, also appeared to support that side.
Though at one point in the proceedings, Kennedy challenged Pincus for conceding to Ginsburg that a rule banning face-to-face solicitations — a more specific prohibition than the Florida code in question — would be valid under the First Amendment.
“It seems to me when you make the initial concession, you have a real problem in determining how to make this not over- or under-inclusive.”
A decision is not expected until spring at the earliest.
Michael Beckel contributed to this story.
The U.S. Supreme Court will hear oral arguments Tuesday in a case that could undo state laws around the country that limit judicial candidates from asking potential donors for campaign contributions.
The Florida case, Williams-Yulee v. The Florida Bar, stems from a 6-year-old ethics violation in a county court race that predated the high court’s 2010 Citizen’s United decision, which, along with a handful of other rulings, have upended many traditional limits on money in politics.
Unlike federal judges, who are appointed to lifetime tenure by the president, voters in Florida and 38 other states elect judges. Thirty of those states limit judicial candidates’ ability to personally raise money for their campaigns. Instead, “the ask” must come from a separate campaign committee, a system designed to insulate judges from bias toward the lawyers and litigants who donate — or choose not to — and then come before them in court.
At the heart of the case is the 2009 campaign of Lanell Williams-Yulee, who signed a mass-mailed letter asking for contributions as she sought a Hillsborough County trial court judgeship. The Florida Supreme Court disciplined her with a public reprimand and a $1,860 fine after The Florida Bar argued that her letter violated the state judiciary’s personal solicitation ban. Now, Williams-Yulee brings the case to the U.S. Supreme Court to argue the ban infringed on her free speech.
If the court rules in favor of Williams-Yulee, her disciplinary record with The Florida Bar will be wiped clean, according to her attorney Ernest Myers. Yet the court’s decision may be more far-reaching: if it finds the Florida ban unconstitutional, Myers said, the bans in states with similar rules will likely be invalidated.
“It’s a blanket prohibition on speech, including some speech which is fairly innocuous and probably doesn’t rise to the level of the concerns that were the reasons it was put in place to begin with,” Myers said.
Proponents of the ban fear such a ruling could mean judicial candidates in Florida and 29 other states may find themselves directly asking the lawyers and corporate executives who appear before them in court for cash ahead of each election cycle.
Williams-Yulee’s fundraising letter failed to yield any contributions. She also lost the election, and never sat on the bench, making the case an imperfect test of whether asking for campaign contributions threatens a judge’s impartiality.
So, why did the court even take the case?
Six lower federal circuit courts and four state courts are split on the constitutionality of such bans. Williams-Yulee’s opponent, The Florida Bar, even urged the court to accept the case and resolve this clash.
The high court’s recent campaign finance decisions suggest that Williams-Yulee could win inside the marble-columned, frescoed walls of One First Street, making it even easier for judicial candidates around the country to pad their campaign coffers.
Judicial elections — once sleepy contests removed from the blood sport of politicking — have become multi-million dollar contests in recent election cycles.
State supreme court candidates attracted at least $18 million in contributions during the 2014 election cycle, according to a Center for Public Integrity analysis of available state data collected by the National Institute on Money in State Politics.
Candidates for state high courts spent at least $5.2 million on television ads, with Michigan candidate Richard Bernstein spending an estimated $1.3 million for his successful election campaign, according to the Center for Public Integrity’s analysis of data from media tracking firm Kantar Media/CMAG.
The Florida rule in question only narrowly limits candidates’ speech, according to Matthew Menendez, a lawyer for the Brennan Center for Justice, a think tank that filed a brief supporting the ban. Judicial candidates may still discuss their credentials and legal philosophy and send thank-you notes to donors, he said.
“The only thing a judge can’t say is ‘Please give me money,’” Menendez said.
But in a friend-of-the-court brief, the American Civil Liberties Union wrote that “campaign speech by candidates for judicial office, like campaign speech by candidates for other offices, is entitled to the highest degree of First Amendment protection.”
Such a view was underscored by Justice Antonin Scalia’s majority opinion in the 2002 ruling on The Republican Party of Minnesota v. White, which allowed judicial candidates to publicly share their opinions on controversial legal and political matters.
Justice Anthony Kennedy will likely be the swing vote in this case, said Tracey George, a professor at Vanderbilt Law School who studies the effect of campaign contributions on judicial decision-making. Though the court’s decision is likely months away, she predicts Kennedy will join the four conservative justices — Scalia, Clarence Thomas, John Roberts and Samuel Alito — to find the Florida code unconstitutional.
Such a ruling would be an additional incremental push by the court’s majority toward campaign finance deregulation, George said. The decisions in the 2010 Citizens United v. Federal Election Commission and 2014 McCutcheon v. FEC cases both expanded freedoms for donors to give to candidates, parties and outside groups in elections.
Ed Whelan, a former clerk to Justice Scalia and director of the conservative Ethics & Public Policy Center, said it’s possible that the court could leave the First Amendment question unresolved yet decide that Williams-Yulee did not actually violate Florida’s ban. The mass mailing was a decidedly impersonal solicitation and did not yield contributions, let alone the quid pro quo exchanges that judicial campaign donations may invite.
It’s also possible the court could dismiss the case entirely, Whelan said. However, he noted, the court takes on cases “to resolve these grander issues, not to engage in error correction.”
Forget lobbying. When Washington, D.C.’s biggest trade associations want to wield influence, they often put far more of their money into advertising and public relations, according to a new Center for Public Integrity investigation.
Take, for example, the American Petroleum Institute. The oil and gas industry trade group spent more than $7 million lobbying federal officials in 2012. But that sum was dwarfed by the $85.5 million it paid to four public relations and advertising firms to, in effect, lobby the American public — including $51.9 million just to global PR giant Edelman.
From 2008 through 2012, annual tax filings show, the API paid Edelman a staggering $327.4 million for advertising and public relations services, more than any other contractor.
It’s been well-publicized how much industry spends on lobbying the government, but not so much is known about how much money goes toward influencing the public. In an effort to find out more, Center for Public Integrity reporters examined the tax returns for trade associations that spent more than $1 million on lobbying in 2012. The IRS requires the groups to report their top five contractors.
Of $3.4 billion in contracts reported by the 144 trade groups from 2008 through 2012, more than $1.2 billion, or 37 percent, went toward advertising, public relations and marketing services, more than any other category. The second-highest total, $682.2 million, or 20 percent of the total, was directed toward legal, lobbying and government affairs.
By industry sector, the biggest clients of PR, marketing and ad services were energy and natural resources associations.
The public relations industry is on a growth tear while the number of federally registered lobbyists is actually shrinking. Public relations work, unlike lobbying, is not subject to federal disclosure rules, and PR and advertising campaigns can potentially influence a broader group of people. In addition to Edelman, among the other major players are President Barack Obama’s go-to ad agency GMMB, “issue-advocacy” firm Goddard Gunster and government policy specialists Apco Worldwide.
While not a complete accounting of spending, the analysis provides a glimpse into just how important the public relations industry is to groups seeking to influence public policy.
Big energy leads spending
Boosted by the $327.4 million-worth of contracts Edelman inked with the American Petroleum Institute — consistently the largest contracts the Center found in five years of collected data — the energy and natural resources industry outspent every other sector on advertising and public relations.
The API, Growth Energy — which represents ethanol producers — and other energy and natural resources trade groups collectively spent more than $430.5 million on PR and advertising to help burnish their image between 2008 and 2012.
It’s not clear how much of the total went into the bank accounts of the PR and advertising firms and how much was passed on to media companies, however. Edelman declined to comment with Center reporters for this story. Edelman likely left some of the work for the API to its Blue Advertising subsidiary, which offers media planning and placement in its services and discloses work for the oil giant on its website.
Other top energy and natural resources interests included the National Fisheries Institute, which represents seafood harvesters, wholesalers and retailers, and the National Biodiesel Board, whose members take recycled cooking oil and animal fats and turn them into fuel.
Business associations — led by the U.S. Chamber of Commerce — represented the second largest industry category, paying PR and advertising firms a total of at least $214.9 million from 2008 through 2012. The U.S. Chamber, the nation’s biggest lobby and a prolific spender on political ads, paid $173.5 million to its top advertising firms during the five-year period.
In 2010 and 2012, all five of the trade group’s top contractors were advertising agencies.
The U.S. Chamber paid Republican media-buying firm National Media Research, Planning & Placement more than $60.8 million for advertising services in 2009 alone. National Media, based in Northern Virginia, researches voter demographics and behaviors and places ads in key media markets.
Another top advertising contractor for the U.S. Chamber was Revolution Agency, which the trade group paid more than $38.2 million from 2010 through 2012.
Revolution is a Northern Virginia-based advocacy firm that possesses the “Creativity of Madison Avenue” and the “Strategic Discipline of a Political Campaign,” according to its website. Its partners all formerly worked as staffers or consultants for Republican lawmakers, and the firm’s clients have included business groups and the telecommunications industry.
The agency was behind an award-winning public affairs campaign targeting the proposed Consumer Financial Protection Bureau, an agency birthed out of the 2008 financial crisis. The campaign on behalf of the U.S. Chamber included a TV ad that attacked the proposed bureau as a “massive new federal agency that will create more layers of regulation and bureaucracy.”
The finance, insurance and real estate sector ranked third in contracts with advertising and PR agencies, paying $184.5 million to contractors, including favorites the Most Organization, a West Coast advertising agency, and Locust Street Group, a “grassroots” advocacy firm. The sector was led by the National Association of Realtors and America’s Health Insurance Plans.
The Most Organization, based in Orange County, California, earned more than $116.7 million from 2010 through 2012 for its work to promote the National Association of Realtors in a national advertising campaign.
Fourth in PR spending based on top contracts was the food and beverage industry, which paid out $104.5 million from 2008-2012. Big spenders included the American Beverage Association, which has been shelling out millions to try and keep cities and states from taxing sugary drinks.
Rounding out the top five industries for PR and advertising spending was communications and electronics, led by CTIA — The Wireless Association, which represents telecommunications companies like AT&T Inc. and Verizon Communications Co. Also in that category: the Software Alliance.
Steve Barrett, editor-in-chief of trade magazine PR Week, says it’s clear why trade associations rely so heavily on PR and advertising.
“They certainly want to influence the general public,” he says, “because the general public will then influence the politicians, the lawmakers or the regulators in that particular industry.”
Edelman leads PR firms
The Center’s analysis includes the top five contractors for each trade association. Annual totals need to be at least $100,000 to be reported. The Center looked only at trade associations that spent more than $1 million on lobbying in 2012, according to the Center for Responsive Politics. [See Methodology.]
Edelman’s lucrative contracts with the American Petroleum Institute helped the PR giant earn $346.8 million, significantly more money from top trade associations than any other advertising or public relations firm, according to the Center’s analysis. But the oil industry trade group wasn’t the firm’s only client.
Others included the Business Roundtable ($9.9 million), a group of CEOs who advocate for business-friendly policies, the Software Alliance ($2.5 million) and the Grocery Manufacturers Association ($1.8 million).
The food-industry trade group paid Edelman more than $1 million in 2011 for work related to its campaign to put select nutrition facts on labels — a move that some health experts criticized as a way to head off the Food and Drug Administration’s effort to require more comprehensive labeling.
The firm’s Washington office has a staff of 225, which includes “former journalists, campaign veterans, political speechwriters, White House staffers and legislative aides,” according to the firm’s website. Among them: Steve Schmidt, a senior advisor to Arizona Republican Sen. John McCain’s 2008 presidential campaign; former White House deputy press secretary Jamie Smith; and former Sens. Judd Gregg, R-N.H., and Kent Conrad, D-N.D.
Edelman is known for its at-times controversial tactics. In 2006, the firm was forced to apologize for creating a misleading grassroots campaign for Wal-Mart. To polish the company’s reputation, the agency had created “Working Families for Wal-Mart,” for which a couple drove across the country blogging positive accounts of the retail giant’s employees and customers — initially without disclosing that they were compensated. The campaign, which launched amid bad press about the company’s employment practices, sought to portray Wal-Mart workers as happy middle-class families.
More recently, leaked documents revealed Edelman’s aggressive plans to attack opponents of a pipeline being developed by TransCanada Corp. Within days of the leak, TransCanada announced that it was severing ties with Edelman.
In both cases, according to reports and leaked documents, Edelman maintained the same three-step approach: promote positive messages, respond to criticism and pressure opposition groups.
Michael Bush, a spokesman for the firm, declined to comment for this story. In an email, he wrote, “We do not talk about the work we do for clients.”
Public relations and advertising agencies boast of their communications savvy, but firms contacted for this story were mum. Some, like Edelman, declined to comment, while others did not return repeated phone calls and emails seeking comment.
Most trade associations also did not respond to the Center’s inquiries.
Lisa Graves, executive director of liberal watchdog group the Center for Media and Democracy, which operates the website PRWatch.org, says trade associations are designed to be a “shield and a sword” for their corporate members.
“It’s important for people to know more about how the trade associations operate and which PR operations they’re funding,” she says, “because those nonprofit entities are extremely powerful special interests in Washington, D.C.”
‘Turning the tide’
Communications firm GMMB ranked second behind Edelman. The agency, which has offices in Washington, D.C., and Seattle, brought in $123.5 million from contracts with five different associations in the beverage, communications, transportation and business industries from 2008 through 2012.
Known most prominently for its political work on behalf of Barack Obama’s presidential campaigns — GMMB’s leadership team includes Obama’s campaign advisor Jim Margolis — the firm has created ad blitzes for trade groups including CTIA and the American Beverage Association, whose members include Coca-Cola and PepsiCo.
From 2009 through 2012, the wireless association paid GMMB $40.5 million to produce ads, including one TV spot with the message that “wireless is freedom.” The beverage association, which teamed up with GMMB on a 2012 ad campaign to promote new prominently displayed calorie labels, paid the firm more than $55.2 million.
The Most Organization and National Media Research, Planning and Placement were the third- and fourth-highest paid contractors for advertising and public relations services. Goddard Claussen (now Goddard Gunster) came in fifth, followed by Revolution Agency, which was sixth, thanks mostly to its work for the U.S. Chamber of Commerce, according to the Center’s data analysis.
Apco Worldwide, which ranked seventh, earned $42.9 million from trade associations. The Washington, D.C.-based firm is known for its work for the tobacco and health care industries. Mike Tuffin, a managing director in the firm’s Washington office, joined Apco in 2012 after serving as executive vice president of America’s Health Insurance Plans, a trade group that represents health insurers.
On behalf of AHIP, the agency created front group Health Care America to attack filmmaker Michael Moore’s 2007 documentary Sicko, which demonized American health insurers, according to Wendell Potter, a former industry-executive-turned-whistleblower. (Disclosure: Potter is a regular columnist for the Center for Public Integrity.)
In the two years before Congress passed health care reform in 2010, Apco won at least two contracts with AHIP, totaling more than $5 million.
Ogilvy & Mather came in just behind Apco, earning nearly $41 million from four trade associations during the five-year period reviewed by the Center. But the firm, a subsidiary of communications giant WPP, earned almost all of its money from the American Chemistry Council, which represents chemical companies.
The American Chemistry Council paid Ogilvy more than $15 million in 2008 alone. That year, the firm led a couple of PR and advertising campaigns on behalf of the trade group, including one that discouraged Americans from supporting a ban on products containing phthalates, a group of chemicals found in plastics and suspected of causing changes in hormone levels, birth defects and other health effects.
The firm earned awards for the phthalates campaign, which it dubbed “From Toxic to Truthful: Turning the Tide on Phthalates.” Even though Congress eventually banned the use of certain types of phthalates in children’s toys, the firm patted itself on the back for helping to “neutralize negative coverage” and bring “a noticeable shift in the public mood.”
FleishmanHillard ranked ninth, according to the Center’s analysis. Its public relations and advertising clients included the American Petroleum Institute ($27.6 million) and CropLife America ($1.5 million), which represents the manufacturers of pesticides and agricultural chemicals.
The firm, which describes itself as being driven by “the power of true,” has consistently ranked within the top three of the world’s highest-paid public relations companies for the past five years, according to the World PR Report published by the Holmes Report. Its D.C. office is led by Kris Balderston, a former State Department official and deputy assistant to former President Bill Clinton.
Keeping the players straight in the advertising and public relations game is no easy task due to a series of massive mergers that have taken place over the past decade or so. GMMB, for example, is actually a subsidiary of FleishmanHillard, which is owned by the giant advertising and communications holding company Omnicom Media Group, based in New York City.
But most of the subsidiaries function under their own names.
Locust Street Group rounds out the top 10 firms for PR and advertising services. The Washington, D.C.-based agency earned $23.6 million in trade group money from 2008 through 2012, almost all of which came from America’s Health Insurance Plans. It’s unclear what exactly the agency did on the insurance group’s behalf — the firm’s founder, David Barnhart, declined to answer questions for this story — but Locust Street Group’s website says it builds “boots on the ground” coalitions and creates social media campaigns to help influence lawmakers.
“D.C. may have K Street with tons of lobbyists,” the firm’s slogan says, “but small towns all over America have a Locust Street.”
High stakes, big reward
For public relations agencies, landing a contract with a large trade association is a big deal.
“The stakes are high, and the competition is intense,” says Larry Parnell, director of George Washington University’s master’s program in strategic public relations. “But as you can see, winning one of these things is very lucrative.”
It’s difficult to draw sweeping conclusions from the data analyzed by the Center. Trade groups often vaguely describe the services their top contractors provide as “professional fees” or “consulting.” Many firms offer a wide range of services, at times making it unclear exactly what kind of work was done on the industry associations’ behalf.
Because the Center only reviewed the most politically active trade associations, the data didn’t include some industry groups that fell below the $1 million lobbying threshold but still spent heavily on public relations and advertising.
But the contractor information provides an inside look at the way trade associations use PR and advertising to ply the American mind. Trade groups determined to fight regulations and boost profits of their members have spent heavily to influence how the public perceives policies that affect everything from the air we breathe to the beverages we drink.
The strategy, public relations experts say, is not designed to replace lobbying so much as it is to enhance it.
“You can leverage [public relations work] so your lobbying is to a finer point,” says Parnell, noting that lobbyists can better influence lawmakers by showing them polling gathered by “grassroots” PR campaigns. “It provides air cover.”
“People and organizations are getting increasingly sophisticated with their communications strategies. They are more multi-dimensional,” adds Anne Kolton, vice president of communications for the American Chemistry Council. “With any advocacy [effort], the key is to create an echo chamber so people hear your message in numerous venues.”
There are some advantages to putting millions into PR rather than lobbying. For example, a trade association may be pushing a particular policy that is not so popular with the public. As long as it doesn’t directly contact a government official, it need not report who it has hired to do the PR work. Lobbying firms generally must report how much they are paid, who their clients are and what subject areas they are working on.
PR agencies may further obfuscate their role by creating so-called “front groups” that appear to be grassroots organizations, in an effort to push their clients’ messages. It is often difficult to discern who is behind these manufactured entities, though sometimes information can trickle through.
For example, the tax form for the National Mining Association showed that it paid $4 million to Weber Merritt, a Northern Virginia public affairs firm, as an independent contractor. The services were listed as “Count on Coal” in 2012, according to IRS filings.
Count on Coal calls itself a “grassroots organization” that educates people on coal-powered electricity. Its social media and online petitions, which criticize government proposals to cut carbon emissions, all omit ties to the mining association.
While this type of “grassroots” mobilization is increasingly driven by an industry or paid consultants, it is only one piece of the growing demand for communications professionals, who specialize in everything from crisis management to social media advocacy.
In 2013, the global public relations industry grew 11 percent over the previous year to $12.5 billion, according to trade journal The Holmes Report.
The steady rise in public relations worldwide spending has been accompanied by an overall drop in lobbying spending, beyond the trade group sector.
Lobbying expenditures peaked in 2010, when special interests spent $3.6 billion on lobbying federal lawmakers. Since then, they have declined steadily, falling to $3.2 billion in 2013, according to the Center for Responsive Politics. The total number of registered lobbyists has also dropped.
Some say the change indicates a shift toward so-called “soft lobbying,” a strategy that enables industry groups and unions to influence public policy not only with public relations, but through think tanks, nonprofit organizations and grassroots groups that aren’t subject to federal disclosure rules.
The golden age for PR has coincided with the decline of mainstream journalism, especially newspapers, which have suffered from plummeting ad revenue that has necessitated layoffs in newsrooms across the country.
Today, not only are PR professionals outnumbering journalists by a ratio of 4.6 to 1, but the salary gap between the two occupations has grown to almost $20,000 per year, according to the Pew Research Center. The widening employment and income disparities have left journalists underpaid, overworked and increasingly unable to undertake independent, in-depth reporting.
Rick Edmonds, a writer for the Poynter Institute who covers the business of journalism, says the shift has been particularly evident in the coverage of science and health news. Many news organizations that once reported extensively on those issues no longer have the resources to cover them adequately, and special interests have filled the void.
“A great deal of science and health news is coming from the PR side,” Edmonds says.
For trade associations like the American Petroleum Institute, that’s part of the larger public relations strategy that makes lobbying federal lawmakers a lot easier.
“If we’re concerned about a particular member [of Congress], we will educate that constituency and encourage people to weigh in with their elected official,” Jack Gerard, the American Petroleum Institute’s president and CEO, told The Washington Post in a 2012 interview explaining the mentality behind the trade group’s PR offensive. “Congress is a lagging indicator. Congress is responsive to the American people. That’s why a well-educated electorate is a key to sound policy.”
The gradual shift from a focus on traditional lobbying toward greater use of the “outside game of politics,” or communications like PR, has been going on for at least a decade, close observers say, but is now accelerating with advances in technology, social media and digital strategies, says Doug Pinkham, president of the Public Affairs Council, an association of public affairs professionals who specialize in corporate PR, lobbying and grassroots advocacy.
Not all of the trade associations reviewed by the Center spent more money on top contracts for public relations and advertising than on those for lobbying and legal services. But the data appear to support broader trends in the so-called “influence industry.”
“In the world we live in now,” says Pinkham, “if you have an issue that is visual and has a compelling narrative, we’re better off spending more resources on trying to educate the public” than relying on traditional lobbying.
Troubled industries turn to PR
The trade associations that rely most on PR and advertising campaigns are usually those representing industries facing the heaviest regulation and the most public contempt, says Edward Walker, a sociology professor at the University of California, Los Angeles, and author of the book Grassroots for Hire.
And the campaigns are often tied to specific public policy crises. As Walker says, they usually launch “when industries really feel threatened that they might actually lose a policy battle.”
Over the last few years, both the American Petroleum Institute and the American Beverage Association have used PR campaigns to defend their respective industries during heated debates over issues like the proposed Keystone XL pipeline and proposed taxes on sugary drinks.
At the outset of 2012, the American Petroleum Institute announced a “Vote4Energy” campaign to promote the industry in a contentious election year. Its social media endorsed the idea that domestic oil production would bring jobs, revenue and national security.
With Edelman’s help, the American Petroleum Institute also organized a speech and panel discussion targeting “key influencers” in attendance, including think tanks, government officials and the media. Online groups also emerged, like “Energy Tomorrow,” which hosts a blog by Mark Green, a journalist-turned-industry-blogger.
In addition to Edelman’s work, the petroleum group paid FleishmanHillard $22.8 million in 2012 for advertising to promote hydraulic fracturing, or fracking, to skeptical citizens. TV advertisements targeted a half-dozen shale gas-producing states, including Pennsylvania, Texas and North Dakota, emphasizing small-town reliance on energy and downplaying environmental impacts, as part of its Energy from Shale campaign.
Few industries have felt more threatened in recent years than soda makers.
Since 2009, the makers of sugary beverages have found themselves under attack from government officials and public health advocates who have blamed soft drinks for the nation’s expanding waistlines and have favored taxing popular sweetened beverages.
The American Beverage Association has fought back — vigorously — with the help of Goddard Gunster, a Washington, D.C.-based firm famous for creating the “Harry and Louise” ad campaign that helped bury President Clinton’s health care reform proposal in 1993 and 1994.
Goddard has produced anti-tax ads and created front groups in cities and states considering soda taxes. In 2012, the firm helped the association defeat two soda-tax ballot measures in Richmond and El Monte, California — campaigns that preceded its 2014 ballot-box battles in San Francisco, where voters rejected a soda-tax measure, and Berkeley, where a sugary-drink tax passed.
Jenny Wang, a public health worker and mother of two girls, recalls how the beverage industry flooded Richmond with anti-tax ads, buying up the town’s billboards and hiring residents to deliver mailers door-to-door.
“We didn’t have the manpower to fight against all of that messaging,” says Wang, a former Richmond resident who supported the soda tax. “They were so pervasive and so persuasive.”
John Dunbar contributed to this report.