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Big Donors Saw Diminishing Returns in Most Expensive Election in History

What lessons can we take from the record-breaking $6 billion spent by candidates, political parties and outside groups in the 2012 election? Judy Woodruff talks to Roll Call’s Eliza Newlin Carney and Matea Gold of the Los Angeles Times about where all that money came from and why for some, more cash didn’t mean a better outcome.

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    And we turn now to politics. The most expensive set of campaigns in history is in the books. Candidates, parties and outside groups spent a record $6 billion on elections in 2012, up $700 million from the previous record of $5.3 billion in 2008, driven by almost $1 billion in outside spending, three times the amount shelled out four years ago.

    And of that, more than $300 million was spent by groups not required by law to disclose their donors.

    For more on where all that money went, what it bought, and what it means for future elections, we turn to two reporters who've been tracking all those numbers, Matea Gold of The Los Angeles Times, and Eliza Newlin Carney, who covers this for Roll Call newspaper.

    And we thank you both for being with us.

    Matea Gold, let me start with you. Most expensive election in history. How did that manifest itself?

  • MATEA GOLD, The Los Angeles Times:

    Well, I think there's no question money played a remarkable and prominent role in this campaign in a way that we haven't seen in recent years.

    This was the first presidential campaign since a series of important federal government decisions, including the Supreme Court's decision in Citizens United in 2010 that really opened the door to more outside spending. And that's really what drove us to this record $6 billion spending that you mentioned.

    And outside groups played this enormous role, both pummeling the airwaves with ads from the presidential campaigns and in Senate and House races.

    I think there's no question they made the tenor of all the campaigns much more negative. And they also really contributed to kind of an inflation in campaign spending and campaign fund-raising.

    President Obama raised a record $1 billion largely because he was warning his supporters urgently that we are going to be outspent by these outside groups.


    Eliza Newlin Carney, how did you see the difference between money spending this year and four years ago?


    Yes, there's no question that the outside spending was the big takeaway from this election.

    As you said, it was more than three times what had been spent four years ago, and most of that was spent by the super PACs, which were created by Citizens United decision and by a lower court ruling called SpeechNow, and also by these politically active tax-exempt groups, which also represented the other most important trend here, which is the growth in undisclosed money, because these groups call themselves social welfare groups, even though they're very political in their messages.

    And social welfare groups don't have to say where their donors — who their donors are or where their money comes from. So that's a really big change.


    So, Matea Gold, how did they — how do they operate differently from what we have seen in the past? Many of them don't have to disclose. Some do, but many don't. What else is different?



    Well, I think, as Eliza mentioned, the (c)(4) activity is really new. We saw (c)(4)s playing in past elections, but Citizens United gave them a legal right to really engage in independent political spending, and they really did so with vigor.

    And so one of the things that is important to remember when we talk about this $1 billion in outside spending, that's just the spending that was reported. There are probably hundreds of millions of dollars more that we don't know about.


    And what did the money go toward? We assume, Eliza, that a lot of it went to television stations?


    A great deal of it did go to television stations, but as Matea said, there's a lot that is a little bit ambiguous here.

    And I think there was activity that went into get-out-the-vote activities and ground operations, some of which is not immediately reported. The big spending by outside groups on campaign ads wasn't always fully effective. Some of the groups that really flooded the airwaves found that they didn't have the greatest return on their investment.

    But that was where a lot of money went. And I think the groups that didn't succeed this time as well as they would have hoped might be looking at that a little more closely in the next campaign.


    And I want to ask you both about that. But tell us a little bit more, Matea, about who these groups are. Who were the big spenders in this money — in this election?


    Well, the biggest spenders were a pair of groups that were co-founded by Karl Rove, American Crossroads and Crossroads GPS, its sister nonprofit, which doesn't disclose its donors.

    We saw a lot of big traditional Republican donors give to American Crossroads, which does. Americans for Prosperity, which has had backing in the past from the Koch brothers, who are known for being really patrons of conservative causes, they were really a huge force in this election.


    And as you were pointing out, Eliza Newlin Carney, for many of them, that money didn't pay off. I mean, many of those, the candidates they were backing, from Mitt Romney on, didn't make it.



    In fact, the success on the part of Americans Crossroads was less than 2 percent. It was a little bit better for Crossroads GPS. It was more like 14 percent. There were some groups, including those backing House runners, that had a much higher rate of return, in the 60 percent range.

    But what you saw this time around was the really big winners were actually the liberal groups, Planned Parenthood, 98 percent success rate. Now, of course, that's because most of their money went for Obama, I believe.

    Service Employees International Union, around an 80 percent return on its investment, AFSCME, same thing. So, you had — and environmental groups as well did quite well. So you had a much higher rate of return on the part of these liberal groups.

    And, again, I think part of what they did was, they spent their money early. They really targeted their money.

    And what we have always heard from political scientists is there's a point of diminishing return with big money. What you really need is a threshold minimum to get your message out. And after that, more is not necessarily better. So, I think that's part of what this election illustrated.


    Two things, Matea. Will we know eventually who — all the whos, who gave money in this election?


    No. No, we won't. And that's, I think, an incredibly important point.

    These (c)(4)s do not have to disclose their donors, as Eliza mentioned. And, in fact, many of them don't even have to report basic tax information until next spring or a year later at the earliest.

    And they can put some pretty rudimentary information in those tax filings, and we might never know a lot of the forces that were behind some of the spending.


    So is the — is there any backlash to that? And what are the lessons being talked about, the lessons learned from this election?


    Well, there are many efforts right now to pass legislation to change this. There are a lot of questions about the rule the IRS is or is not playing in cracking down on these groups, which, as Eliza mentioned, are putatively social welfare organizations that seem to be really politically active.

    So, I think that there is going to be increased scrutiny. Whether anything can happen and change, I think, is really going to be up to Congress.


    Eliza, how do you see the future in the next election and the next election for these groups?


    Well, they're going to continue growing and they're going to remain very active and they're going to keep pushing the envelope as much as they can.

    But I think there's a sense of inevitability in the so-called reform lobby that this is going to lead to scandal and corruption, and I think there's a growing sense on Capitol Hill that this system as it is currently constructed cannot continue indefinitely.

    The president and Mitt Romney were not the only ones who spent a huge amount of time fund-raising in this campaign. We ran a story in Roll Call about how House and Senate conditions were spending an increasing amount of time fund-raising, instead of on the campaign trail.

    So, I think there is more of a mood on Capitol Hill that is receptive to change. The challenge will be defining what form that change takes.

    But I think disclosure will be front and center for those who want to discuss changes. And I think you will see not only a revival of the push for the so-called Disclose Act, but you will also see an attempt to get better regulation enforcement by the Federal Election Commission and the Internal Revenue Service.


    Well, a lot to chew on here. And we will see how much lessons were learned.

    Eliza Newlin Carney, Matea Gold, thank you both.


    Thank you.


    Thank you.

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