DC outside spending groups live and die by the megadonor
What goes up must come down.
A fact in physics is sometimes also true with outside spending groups. As super PACs and “dark money” nonprofits are often so reliant on contributions from a handful of wealthy individuals, a powerful group can lose influence quickly if a single donor decides to jump ship.
For example, American Unity PAC, which works to elect pro-LGBT Republicans, saw its independent expenditures fall from $4.8 million in 2014 to $930,667 in 2018 as the group’s revenue dropped to an all-time low since its founding in 2012.
New York hedge fund manager Paul Singer, who advocates for legalizing same-sex marriage, started the super PAC with an influx of cash and regularly contributed millions of dollars. But in 2018, his contributions to American Unity PAC dropped to just over $1 million as he instead directed $2 million to the conservative Senate Leadership Fund (SLF).
The skyrocketing influence of super PACs connected with party leaders — such as the Mitch McConnell-linked SLF and Chuck Schumer-connected Senate Majority PAC — has siphoned funds away from other partisan groups competing for the attention of megadonors.
It’s no more evident than with the Congressional Leadership Fund (CLF), which spent $135 million in 2018, up from $10 million just two cycles earlier. Sheldon and Miriam Adelson donated $55 million to this super PAC in 2018 — a $50 million increase from 2014 — potentially helping Dr. Adelson obtain the Presidential Medal of Freedom. CLF also received $26 million from dark money group American Action Network, with which it shares the same leadership and office.
The rise of establishment super PACs has reduced the influence of party committees as outside spending forces. Outside spending increased by $500 million from 2014 to 2018 but parties’ outside spending ultimately dropped overall.
In the record-breaking cycle that was 2018, the Democratic Senatorial Campaign Committee (DSCC) saw its revenue drop from previous cycles. The Democratic party’s main Senate-focused committee spent less than $30 million in independent expenditures in 2018, down from $69 million in 2014.
Over the same period, the Senate Democrat-allied super PAC Senate Majority PAC (SMP) increased its independent expenditures from less than $47 million to $112 million.
Without any contribution limits in place, super PACs offer ultra-rich donors greater influence on elections and specific races. SMP drew millions from megadonors Donald Sussman, Fred Eychaner, Alexander Soros and Michael Bloomberg.
Megadonors make or break super PACs. Bloomberg’s Independence USA PAC provides a literal example of a wealthy donor making one. Funded almost entirely by Bloomberg, the super PAC increased its independent expenditures from $5.6 million in 2014 to $37 million in 2018 as Bloomberg bet big on House Democrats.
The former Republican mayor of New York City dedicated $95 million to help Democrats at the federal level in 2018. It’s a drop in the bucket for Bloomberg — who recently pledged $1.8 billion to his alma mater John Hopkins University — but the contributions had an earth-shattering impact on the world of campaign finance.
Arguably the most successful super PAC in 2018, Independence USA spent nearly 90 percent of its independent expenditures aiding winning Democrats. The PAC initially supported Republicans and Democrats shortly after its founding in 2012 but started to spend much more, and give exclusively to Democrats, as Donald Trump rose to power in the Republican party. Bloomberg may spend even more in 2020 to in hopes of ensuring Trump’s defeat — one Bloomberg aide told POLITICO he could shell out more than $500 million.
It took just a few megadonors to make New Republican PAC one of the most well-endowed outside spending groups in 2018. The group, founded in 2014, raised just $1.4 million in its first election cycle and less in 2016.
Then Sen. Rick Scott (R-Fla.) took the PAC over. In 2018, New Republican PAC spent $30.5 million in independent expenditures in 2018, up from $500,000 in 2014. Almost all of it — $29.5 million — went to aid Scott against Democrat Bill Nelson. Hedge fund billionaire Ken Griffin of Citadel Group in Chicago was the biggest donor, giving $10 million.
Three of the largest fallers among conservative groups happen to be influential dark money nonprofits.
The National Rifle Association (NRA) made just $9 million in independent expenditures last cycle, down from $27 million in 2014. Ending Spending declined from $29 million to less than $7 million as it turned its focus to state-level contests.
The U.S. Chamber of Commerce decreased its independent expenditures from $35 million to $11 million from 2014 to 2018. The group has been spending to influence the public in other areas, campaigning to defeat Trump’s tariffs and pushing for an infrastructure bill.
Outside spending groups that experience a decline in independent expenditures often are putting resources elsewhere.
Tom’s Steyer’s NextGen Climate Action saw its spending decrease as the group shifted its focus toward registering and turning out young voters. Steyer also launched Need to Impeach for the 2018 cycle, putting in $12 million for the impeachment-focused super PAC.
Most independent expenditure dollars go toward television ads. Even as digital ads become more popular, television ads still dominated the 2018 election. That trend could be changing as groups analyze just how much bang they are getting for their buck. The biggest super PAC spender in 2016, Priorities USA, has already pledged $100 million toward 2020 but said it will focus on digital ads and voter registration, making it “highly unlikely” the group will run television ads in 2019.
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