Big corporate money is being spent in Tennessee campaigns

Sunday, October 17, 2010 at 10:45pm

With two viable candidates in state Sen. Roy Herron and Frog Jump farmer Stephen Fincher, the latter of whom has a very good shot at being the first Republican in the seat since the ’70s, Tennessee’s 8th Congressional District is seen as the state’s most contentious race. So it’s not surprising that it has also been the state’s most expensive race. Even before the general election season, Republican contenders George Flinn and Ron Kirkland accounted for $4 million collectively in the primary they lost.

One of the more interesting political expenditures was a $100,000 media buy in support of Fincher last summer. A group called Conservatives For Truth, founded by Madison County Commissioner Adrian Eddleman, bought the ad. CFR was pretty small-time; it hasn’t reported any activity since. But it does stand out for one reason: Technically, it was Tennessee’s first so-called “Super PAC,” an entity that didn’t exist until this year.

The term Super PAC was brought into wide use earlier this year by the political press. The moniker actually existed before but referred to something less interesting: large political action committees that pooled money from small political action committees. (Local and state chambers of commerce sometimes liked to call themselves Super PACs.)

Its earliest 2010 appearance in a credible news outlet may have been an Aug. 2 column in the National Journal. The term seems to be quickly falling out of fashion. Its highest and most prestigious (The New York Times, Washington Post, et al.) usage period occurred between Sept. 20 and Sept 30. As of this writing, it can most recently be seen in the Sunday, Oct. 10, edition of the Las Vegas Sun. Before that was Oct. 5 in a UPI article.

The term describes what the Federal Election Commission calls independent expenditure-only committees, which can spend unlimited amounts of money on political ads without regularly reporting contributions or those behind them.

Initially, there was some confusion about what a Super PAC was. As originally intended, it referred to organizations created following two July rulings by the FEC, allowing the conservative group Club for Growth and the liberal group Commonsense Ten to form IE-only committees. Pursuant to the Supreme Court’s so-called “corporate personhood” decision in the Citizens United v. Federal Election Commission case in January, IE-only committees can accept unlimited donations from corporations, unions or actual people with lots of money.

According to its latest monthly report, filed Sept. 20 and detailing expenditures for August, Club for Growth’s IE-only committee, Club for Growth Action, spent $350,000 between Aug. 27 and 31, $330,000 of which went to buy ads supporting former Club for Growth president Patrick Toomey’s Senate campaign in Pennsylvania. The committee has reported spending $1.5 million more on U.S. Senate races in Pennsylvania, Florida, Wisconsin, Colorado and Nevada. The committee spent hundreds of thousands per week throughout September on election ads in places like Pennsylvania, Colorado, Kentucky and Indiana. Commonsense Ten has reported more than $600,000 in media buys opposing Senate candidates Roy Blunt in Missouri and Dino Rossi in Washington.

In late September, the Center for Responsive Politics’ OpenSecrets blog reported that 33 such committees had been formed since the FEC’s July ruling. Few of them had by then reported any contributions. Some, like Commonsense Ten, which has thus far reported only one $500 contribution, were filing quarterly contribution reports, meaning that no one will know who or what’s funding them until after the Nov. 2 election. Others, Club for Growth Action among them, revealed more: In the September monthly, the group reported more than $1.2 million in contributions, with every contributor’s name listed.

But there was another thing happening, which is where the confusion about Super PAC — which is not a designation used by the FEC — came in. Nonprofit groups, some that came into existence only in the past month or two, were using their treasury funds to buy ads that expressly endorsed or opposed federal candidates. Crossroads Grassroots Political Strategies — founded last summer and affiliated with Karl Rove’s 527 group American Crossroads — was using its own treasuries to buy ads.

That these groups are buying political ads isn’t anything new. Nonprofits, at least the ones with a 501(c)4 tax code, have always been allowed to expend independently. And as long as they are “primarily” nonpolitical organizations — that is, as long as most of their work involves charitable efforts and not buying political ads — the IRS allows them to retain their 501(c)4 status, along with its privileges, most importantly not being required to report who is contributing.

That’s where the new part comes in. Prior to Citizens United, corporations and unions weren’t allowed to donate money to nonprofits if those nonprofits were using that money for politics. Now, 501(c)4 groups can make independent expenditures on campaign materials that explicitly support or oppose a federal candidate.

So while a group like American Crossroads had to reveal to the IRS that on June 2, Music City Center hotel patron and former Gaylord board member Robert Rowling’s TRT Holdings Inc. gave it $1 million, Crossroads GPS — which has reported spending more than $4 million in media buys these past few months — isn’t required to reveal a single donor.

Though these 501(c)4s are not political committees or Super PACs technically, they’re spending tons of money, across the country, in the same ways as those committees. Yet nobody knows what their benefactors’ agendas are or, to be fair, whether they even have agendas, since nobody knows who their benefactors are. These groups have been characterized by some critics as legalized money-laundering operations, conduits through which timid companies, unions and individuals can manipulate the political process without revealing themselves to an electorate that may object.

Whatever they are, these are the groups that have been doing the spending in Tennessee as of Oct. 13.

60 Plus Association

TN Activity: $382,000 opposing Roy Herron, Democratic candidate for House of Representatives, 8th District.

The 60 Plus Association, an Alexandria, Va.-based 501(c)4, is by far the largest nonprofit spender in Tennessee’s federal elections this year. Founded in 1992, the 60 Plus Association calls itself the “conservative alternative to AARP.” Its chairman is James Martin — veteran of the Korean War, former chief of staff to very conservative Florida Congressman Edward Gurney, and a man George W. Bush, upon signing the law, said “worked hard” to get the 2003 Medicare prescription drug bill passed.

60 Plus’ national spokesman is Pat Boone. Its legal representation includes campaign finance attorney Jason Torchinsky, who is a faculty member at the Leadership Institute, which runs a sort of master’s program for young conservative politicos. Its big issues are Social Security reform (privatization, as Democrats would have it), the estate tax (which it opposes), and recently, Congressional Democrats’ energy bill (which it also opposes), and the federal health care reform law (which it loathes).

The organization has long been rumored to be a corporate front, particularly for the pharmaceutical industry. As was first reported in the Washington Post, the organization received a grant — the amount of which was unspecified — in 2002 from the Pharmaceutical Research and Manufacturers of America (PhRMA), the lobbying group for drug producers. That same year, according to the Center for Responsive Politics, 60 Plus lobbied Congress to the tune of $11 million. The prescription drug bill, along with homeland security, the estate tax and a few others, was among its lobbying issues.

The group quieted down a bit in the ensuing years. Its last three 990 filings with the IRS for the 2006-07, ’07-08 and ’08-09 tax years show revenues at $1.2 million, $1.9 million, and $1.8 million, respectively. Money spent on its mission, “to protect the rights of senior citizens,” was $650,000, $1.5 million, and $1.5 million. Martin’s salary varied between $105,000 and $132,000.

Under the law, 60 Plus must be primarily a nonpolitical organization in order to retain its tax status. But this year, it has so far made about $6 million in independent expenditures, mostly in opposition to Democratic congressional candidates around the country. But 60 Plus spokesman Tom Kise said that despite those numbers, most of its activities remain non-political.

“60 Plus is not only engaged in direct advocacy for candidates, it’s also engaged in educating voters, educating activists. It’s engaged in educating members of Congress. It’s engaged in educating the public,” Kise said. “So it’s doing exactly what it’s supposed to be doing, exactly what it’s intended to be doing under the law.”

Asked whether the majority of 60 Plus’ money, if not its activities, is being spent on politics, Kise said, “The year isn’t over, and I don’t have a copy of the books.”

In Tennessee alone, between Aug. 27 and Sept. 25, 60 Plus reports it spent $382,308.76 on TV ad production and placement, all in opposition to Herron. The organization has yet to report a single contribution. Of course it’s not required to, and it does not intend to, according to Kise.

“60 Plus is not going to go through each one of these contributors. It’s not required to. It’s supported by 5-and-a-half million citizen activists in addition to others who believe, as 60 Plus does, that the choices being made by the members of Congress are reprehensible,” Kise said.

Herron’s campaign isn’t buying the Pollyanna explanation.

“I would say prove it. They haven’t put forth anything to say that. They are propped up by — well, they’re as shadowy as special interest groups get,” said Herron campaign spokesman Brandon Puttbrese. “There’s no telling where their money comes from, but we’ve got a pretty good idea that it’s Wall Street and pharmaceutical companies, and they won’t prove that it isn’t.”

Kise did say that PhRMA is no longer giving the organization money. “They get no PhRMA money. It is a lie by the opposition,” Kise said.

That’s certainly supported by IRS documentation. But what about pharmaceutical companies themselves, now that they may give freely to organizations that pay for political ads?

“I have no idea,” Kise said.

60 Plus’ ads against Herron go to great pains to connect him ideologically to House Speaker Nancy Pelosi and President Obama. And while one cites his support for the formation of TennCare as a strike against him, the ads mostly do it with hasty rewrites on ad copy that was clearly intended to target actual congressional incumbents.

An anti-Herron ad opens with the claim that “liberal politicians are ignoring Tennessee seniors,” not unlike how “Washington liberals like Paul Kanjorski have betrayed Pennsylvania seniors.”

In this state, you might say that “There’s a huge disconnect between the liberals of Washington and the people in Tennessee.” But in New York’s 1st District, “Tim Bishop has lost touch with Long Island seniors.”

Or, from one called “Why?” as it ran in Tennessee’s 8th: “We warned Nancy Pelosi not to do it, not to vote for a big government health care bill, one that costs a trillion dollars, raises taxes, and cuts $500 billion from Medicare.”

Indiana’s 2nd District: “We warned Joe Donnelly not to do it,” etc.

“Why” TN-08 goes on: “We may never know why career politician Roy Herron wants to join Nancy Pelosi after what she did to our seniors.”

In PA-03, it’s “We may never know why [Kathy] Dahlkemper supported Pelosi over our seniors.”

While Herron has certainly expressed that he’s not aligned with 60 Plus on some issues — such as Social Security — neither is Fincher, or so his campaign has claimed. The ads concentrate on Herron’s position on health care reform. (As for Pelosi, Herron has said he wouldn’t back her as speaker if Democrats keep the House.)

But Herron has shown wavering support for the health care reform law. He has shown strong support for the elimination of the so-called Medicare Part D “donut hole,” a part of the law that stands to reduce pharmaceutical profits. Largely, though, he’s indicated that he would vote to repeal much of the reform plan (he voted with most of the rest of the state Senate for the Tennessee Health Care Freedom Act, a grand harrumph to the new law, and cast another “aye” on a resolution urging the state attorney general’s office to sue the federal government over insurance mandates).

Certainly there are better candidates to attack for being too pro-health reform. But Puttbrese said the real issue for this nonpartisan organization is party.

“These guys don’t care about the districts that they’ve been advertising in,” he said. “They’ve got one objective: to defeat Democrats.”

Club For Growth

TN Activity: $110K on 3rd District primary in support of Robin Smith. Not to be confused with Club For Growth Action IE-only committee, which issues monthly reports that include contributions, or the Club for Growth PAC, which does the same. This is the central organization, the Club for Growth Inc. itself, which, like 60 Plus, is a 501(c)4 and has not reported any contributions.

The Club for Growth, founded in 1999 and originally a 527 group, was sued in 2005 for failing to register with and report to the FEC. It began registering as a 501 during the 2008 campaign cycle. A small-government, anti-tax organization, it is famous for endorsing and financially supporting very conservative candidates and opposing moderates in GOP primaries. This year, the group’s PACs have spent on tea party-backed candidates like Sharron Angle, Jim DeMint and Rand Paul.

Though the group’s two affiliated committees have handed out millions in contributions and independent expenditures, the group itself has spent its money in only two: $186,000 opposing GOP Utah Sen. Bob Bennett, who lost to Club-supported tea party candidate Mike Lee; and $115,000 in Tennessee’s 3rd District GOP primary. Half went to support extreme right-wing candidate Robin Smith, who lost; and half went to oppose Chuck Fleischmann, who won.

According to its report, the money went to TV ads and mailers. The latter category presumably includes an infamous joke flier mocking Fleischmann. Written on the flier was a fake phone number — 1-800-GET-SOME-PORK — which, when dialed, turned out to be a phone sex service.

Robert Kirkland

TN Activity: $1.5 million on Ronald Kirkland.

This is actually the most any group of this kind has spent on an election. It just so happens that the “group” was a guy who was really enthusiastic about helping his brother Ron get elected, and perhaps he wasn’t satisfied with the $2,400 he would have been limited to giving the campaign committee itself. Too bad Kirkland lost to Fincher in the GOP primary. Also too bad that it’s an independent expenditure campaign, not a committee. A family member likely does not qualify, hence the FEC complaint filed against the brothers in April, although in July, Ron Kirkland told WPLN radio that he and his brother were not on speaking terms over the course of the campaign, “except regarding health matters."

Filed under: City News

16 Comments on this post:

By: frodo on 10/18/10 at 7:16

This seems like a well-researched article on a complicated issue that does influence voter sentiment. Well done, on that score. Would it not then be appropriate to go a step further and pursue an answer to the question, "Why do corporate entities or individuals want to be anonymous?" Is it because they have some diabolical and anti-American agenda to subvert or overthrow our constitutional republic? I think that very unlikely. So, why would these funders not want to be known? I think it more likely that our elected leaders increasingly use their power to punish people (and companies). For example, would I want to openly oppose Obamacare if the HHS Secretary and the White House has made it clear that anyone who gets in the way will be "dealt with?" Do anonymous campaign donors really subvert our freedom, or are they more like the patriots in the 13 Colonies who took their shots from behind trees when the Redcoats marched through to enforce royal fiat (we call it executive order)? At least they can direct the use of their money, unlike so many union members who turn their hard earned cash over to their masters each payday so their masters and the super masters who watch over them can use that cash in their own political way. These minions have no choice. "Don't want to support our chosen candidates? Then we'll make sure you don't work around here again." Given the two choices, I'd rather shoot from behind trees like these PAC and Super PAC funders than be forced to hand my earnings over to the political agenda of someone else. In such a climate, I'm for PACs and Super PACs. This isn't "hush money." This is patriotism.

By: morpheus120 on 10/18/10 at 7:46

So the whole article can be boiled down to one sentence:

Corporations (domestic and foreign), who caused the economic crisis and have redistributed wealth from the middle class to their own pockets, are systematically trying to take over our government through the Republican Party and their gullible Tea Party supporters.

Way to sell out our country AGAIN, conservatives. Just like you did on "free trade", a war based on lies, and giving the oil barons access to the White House for 8 years.

Traitors, the whole teabagging lot of you.

By: morpheus120 on 10/18/10 at 7:50

Look at Frodo twisting and turning as he/she tries to explain how anonymous corporate donors are somehow "patriots". The Founding Fathers and the Greatest Generation are all rolling in their graves at that lunacy.

You sociopaths really can convince yourselves of anything if you set your minds to it, can't you?

By: pswindle on 10/18/10 at 8:01

The Supreme Court has made certain that our elections are not free of foreign influence by passing the secret contribution law. But, what is so surprising is that our Chamber of Commerce is also into the destruction of America. America had better wake up before it is too late. Have we forgotten how Bush/Cheney almost destroyed our country?

By: shinestx on 10/18/10 at 9:13

Where is the mention of labor unions funding the Dem-wits? And why are they allowed to go "under the radar"? Didn't think you guys had an answer for that one. Like the Obama administration and their far-left supporters, City Paper (aka the media) keep their guns trained on law-abiding businesses... oh, didn't you know, they're following the law!

Funny when you ask a starry-eyed "journalist" why they tote water for the socialist Democrats and you get a naive, Hollywood-tinged David-v-Goliath view of the world that is totally unrealistic. Of course, they don't (or won't) see that big government is actually the Goliath. Maybe none of them can visualize the real world they're creating. Yet, that's the window to the mind of those running the show these days. Big media and big government!

By: shinestx on 10/18/10 at 9:21

Hey, morhpeus, maybe you'll want to explain why the Dem-wits and their lackies in the media continue to vilify law-abiding businesses. Or maybe you don't see what is already happening with contributors to conservative groups. But then those pesky facts can get in the way of a good rallying cause for the emotional left:

Then maybe you could direct some of your energies to the international groups who have contributed directly to B.O. and the Dem-wits. Then again, why would you let facts get in the way of your emotions:

By: gdiafante on 10/18/10 at 9:56

"Then again, why would you let facts get in the way of your emotions..."

LOL...oh the irony

By: govskeptic on 10/18/10 at 10:10

I don't find in this story what a few other posters have found.
It appears to be Republican donations-bad/illegal , Democratic
donations-good/the American way/Motherhood and Apple Pie!

By: MAmom on 10/18/10 at 10:32

For all the noise about Union spending in elections, the last statistic I heard on NPR said that in this election cycle Corporations were outspending the mean old unions 9 to 1.

And almost all the Corporate contributions go to Republicans. Guess why?

It's because Republicans = the best government Corporate money can buy.

Many people vote Republican, against their own interests, because they believe in "trickle down economics". Well folks, the money is trickling ... out of the United States. Good for financiers, but unless you are in upper management, not so good for the rest of us. It is a downward spiral for the rest of us.

Economies are complicated and the simple (minded) belief in "trickle-down" economics has resulted in CORPORATE SOCIALISM. And Big business wants more - and they'll get what they want from Republicans.

Belief in "trickle-down economics" (i.e.: the BIG LIE) has made it possible for passage of governmental policies that have effectively institutionalized "TRICKLE-UP" economics. Examples:
- -no or disproportionately small tax rates for the wealthiest Americans,
- -subsidies for gas and oil companies,
- -appointment of industry insiders to regulatory lead roles who subsequently dismantle regulations intended to protect the public and the environment (because of course... "business" has our best interests at heart),
- -passage of NAFTA which has resulted in the loss of millions of jobs (hey but now you can buy really cool cheap stuff at Walmart),
- -no healthcare for people who have no other options,
- -subsidies for big gas and oil corporations,
-- no or only token development of alternate energy (because in oil we trust...), and now
- -their champion in the Supreme Court opened the door for Corporations to be donate vast sums to political campaigns anonymously,

Especially Republicans protect this unfair system FIERCELY - to the country's peril.

All the while claiming to be uber patriots.

By: cookeville on 10/18/10 at 10:38

Under present law, if you are a private citizen, you can contribute no more than 2 grand to a candidate out of your pocket. The law also states that the 'corporate person', ie the corporations may not contribute 'directly' to campaigns, but the fact is, they are contributing multi-millions in other ways in order to get their agendas made into law. This agenda includes:
1. ridding themselves of the majority of work safety laws enacted by the Congress so they can increase profits.
2. ridding themselves of any and all medical care and pension plans for their workers so they increase profits
3. increasing working hours while lowering wages so they can increase profits
4. Working with the bandsters to consolidate as much wealth as they can into the hands of the upper 2% .
5. Using the totally uninformed/misinformed angry tea partiers to do their dirty deeds for them.
Being angry and not knowing about what you are angry is a recipe for disaster. And the tea partiers have no clue. When a party in power takes a trillion+ dollar surplus and after eight years ends with a 3+ trillion dollar deficit, then something is wrong. But you people blame it on a congress which had a democrat majority for four of those years, conveniently forgetting that the other four were run by pubs plus, the shrub and his corporate cronies made it their job to scare us into letting him start one useless war and increase another one, not to mention he used his 'presidential prerogative to make other decisions that bypassed congress and cost us billions. The truth really is out there if only you choose to search it out. But not even knowing that the corporations have been designated persons just like you and me is fatal.

By: frodo on 10/18/10 at 11:39

Following the banshee-like screams of protest from my original post, I remain unmoved from my contention that the vast majority of PAC funders are patriots quietly trying to push back at the empowered Chicago Mob.

Or would a better defense of PAC money be "No controlling legal authority"...if any here are willing to recall the claims of a certain ex-VP caught with his arms stuffed into the Asian cookie jar. Oh, that was different, you'll tell me.

And, BTW, why would foreigners be involved in funding conservative candidates? They don't want a strong and fiscally-responsible America. They don't want us to control our borders. They don't want us to curb the movement here to all but outlaw our oil exploration. Pointing a finger at theoretical involvement of foreigners in conservative causes while Dems have a long and documented open door to overseas cash is very disingenuous.

By: MAmom on 10/18/10 at 12:56

Follow the dominoes. Where will your children and grandchildren work if the corporate CEOs get their way?

By: frodo on 10/19/10 at 8:49

They will have a job, MAmom!! They will have a job. And they will probably have a choice of jobs and opportunity for advancement. And when they gain some success, then they might have the opportunity to become one of those CEOs. Kill the corporations and the incentive to make them succeed, then we all become wards and slaves of the state.

By: AmyLiorate on 10/19/10 at 9:48

morpheus120 on 10/18/10 at 8:46

So the whole article can be boiled down to one sentence:

Corporations (domestic and foreign), who caused the economic crisis and have redistributed wealth from the middle class to their own pockets...

One big difference there... corporations do not force people to redistribute their wealth. You're fond of a government that would put you in jail if you don't redistribute your wealth. How benevolent you are with my freedom and property!

Over all your argument is based on some, not all, corporations might have caused the economic crisis...
Throw the baby out with the bath water is your solution? I think not.

I like Frodo's original post because it applied equally to all people, not caring if they are Dem, Repub, socialist, etc. He only used Obamacare as an example, not a basis for his/her opinion.

By: AmyLiorate on 10/19/10 at 10:52

MAmom on 10/18/10 at 11:32

For all the noise about Union spending in elections, the last statistic I heard on NPR said that in this election cycle Corporations were outspending the mean old unions 9 to 1.

Those unions have a steady stream of dues they use for political purposes. Unlike PACs and others who I see begging for money all the time.

According to an AFL-CIO internal memo they will be:

* Halting normal "union operations" and sending 2,000 national union staff and 3,000 local union officials into the field to campaign full time from now until election day;

* Making tens of millions of phone calls attacking pro-Right to Work candidates (23 million already and tens of millions more in the final weeks);

* Sending 4 million pieces of mail every week smearing candidates who oppose Card Check and other union power grabs.

MAmom, how much value can you place on the time of 5,000 union die-hards? Millions of phone calls targeting their chosen opponents? 10,000,000 mailings?

Since those 5000 people are already on the union payroll the cost isn't factored in to your 9:1 figure.

By: MAmom on 10/19/10 at 1:10

The evil Union argument again. It really does get tiresome.

The disporportionately large amounts of money being contributed anonymously by big Business via PACs and SuperPACS will let them outshout & in many cases buy their chosen politicians into office. And these will do whatever their owners (big Business) want.

The honor system might work with a small business. The owner is actually a person or a small group of persons. Chances are operations will be honorable since most people care about their families and communities.

But Corporations are not honorable people. They do what is expedient to be more profitable. Some are run honestly - but for the rest - legislation (regulatory and criminal) is needed to keep the bad ones in line. And if stealing elections let them be more profitable - it will be done. It is naiive to think otherwise.

Remember how well things worked out when regulation was taken off banks? Or how well things went when Business got their way with NAFTA?

It worked out well for very Business... not so well for regular people.