Interest Groups to Dominate Big Money Campaign Finance

Interest Groups have picked up influence in the campaign financing regime in the wake of the 2002 bipartisan reform of federal election laws. The Wall Street Journal has the story:

One of the defining features of the 2004 presidential campaign was the devastating attack on Sen. John Kerry by an obscure group called the Swift Boat Veterans for Truth. In the years since, such independent political groups have only grown stronger, and they are poised to play an even bigger role in the 2008 elections.

Political groups unaffiliated with the two major parties account for an increasingly large share of spending on federal campaigns -- 19% of the total in 2006, up from just 7% in 2000, according to an analysis of campaign-finance data by The Wall Street Journal. They now are horning in on crucial campaign activities once dominated by the parties, such as buying ads and getting out the vote.

In Iowa, independent groups are whipsawing voters with a range of conflicting messages. An organization called Common Sense Issues has funded automated phone calls backing former Arkansas Gov. Mike Huckabee and criticizing his chief Republican rivals. The Club for Growth, an antitax group, is working to defeat Mr. Huckabee with attack ads.

On the Democratic side, an organization called the American Federation of Teachers AFL-CIO Committee on Political Education has spent $250,000 on radio ads in Iowa backing Sen. Hillary Clinton. An environmental group called Friends of Earth Action is running ads against Sen. Clinton.

Over the past four years, the national Democratic and Republican parties have raised and spent less on elections than during the prior four years, when adjusted for inflation. At the same time, independent political groups have more than doubled their spending, and have begun to rival the parties as an election-season financial force, the Journal's data analysis shows.

The shift, largely the result of campaign-finance laws intended to curtail big-money donations to parties, could further polarize the American political landscape. Because the Republican and Democratic parties aim to appeal to broad swaths of the electorate, they tend to be moderating forces in politics. That isn't true of the independent groups, which range from the Sierra Club and the U.S. Chamber of Commerce to fringe groups like Swift Boat Veterans for Truth, which disbanded after the 2004 election. They often pursue narrower agendas or causes further out on the political spectrum.

The nonprofit groups are financed by wealthy individuals, corporations, labor unions and other interest groups. Unlike the national parties, they face no limits on how much money they can take in from contributors. They often don't have to disclose their donors' names until months after an election -- if at all.

During the 2000 election cycle, such outside groups spent at least $260 million on presidential and congressional races, one-fifth as much as was spent by national political parties, according to the Journal analysis of campaign data provided by the Federal Election Commission and two nonpartisan organizations that track political spending. During the 2006 midterm elections, these outside groups spent about $600 million, almost two-thirds as much as was spent by the Republican and Democratic parties, the data indicate. Candidates themselves still account for the biggest piece of spending -- a bit less than half.

Overall, the amount of money poured into each two-year election cycle continues to climb. Data from the FEC and several groups that track campaign finance indicate that total spending during presidential-election cycles rose from $2.8 billion in 1995-96 to $3.6 billion in 1999-2000 to $4.8 billion in 2003-04. This year and next, it is expected to hit $6 billion, political strategists say.

Read the whole thing.

The rise of big money group financing - and the concomitant decline of the political parties - is the most important implication of the McCain-Feingold campaign reform act of 2002. The consequences of reform are understandable, as I've noted before with respect to the rise of big-money "bundlers" in recent elections:

...as any student of campaign finance knows, money in politics is like the winding waters of a raging river. Should a dead log block the river's passage, the water finds a way to continue its flow, up, over, and around the impediment. So it goes with money. The McCain-Feingold reform act of 2002 is largely responsible for making the current crop of bundlers so powerful. The law has also made interest group 527 organizations (a regular target of criticism) powerful producers of campaign advertising. Who knows what consequences will flow from the next round of "progressive" campaign finance reforms?

It actually pretty fascinating how groups have adapted to the laws. They increased their activity and made the political process dramatically more pluralistic. The flow of money as such is how our politics should operate: Anyone can contribute and both sides of the political spectrum have influence.

It'll be interesting to see the types of "527" attack organizations that emerge in the 2008 general election. More "General Betray Us" from the left, and swiftboating from the right. Let the games begin!