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'Super PACs' largely funded by a wealthy few

A few super-rich individuals are using their personal and corporate wealth to influence American politics in an unprecedented manner.

February 01, 2012|By Matea Gold, Tom Hamburger and Maloy Moore, Washington Bureau
  • Super-rich individuals such as casino tycoon Sheldon Adelson and his family, not large corporations, are the main force powering the new "super PACs."
Super-rich individuals such as casino tycoon Sheldon Adelson and his family,… (Paul Hilton, European Pressphoto…)

Reporting from Washington and Los Angeles — When it comes to big money in politics, Dallas billionaire Harold Simmons' influence has long been apparent in Texas, where he has plowed more than $1 million into Rick Perry's gubernatorial campaigns.

Now Simmons has found a new outlet for his outsize political giving — the explosion this election cycle of "super PACs," independent political organizations that can accept massive contributions to influence the presidential race and other federal elections.

Simmons and his privately held holding company, Contran Corp., dumped $8.6 million into a series of GOP-allied super PACs last year, according to campaign finance records released late Tuesday night. That propels Simmons into the top tier of a newly minted millionaires' club — super-rich individuals who are using their personal and corporate wealth to influence American politics in an unprecedented manner.

Seventeen people or companies gave at least $1 million each to super PACs last year, according to an analysis by the Los Angeles Times data desk. The infusion ushered in an era of Texas-style unlimited donations at the national level. The organizations have emerged as heavyweights in this year's presidential contest, at times outstripping the influence of the candidates' own campaigns.

That's the case with former House Speaker Newt Gingrich, whose presidential bid has been kept afloat by Winning Our Future, a super PAC that has received $11 million from Las Vegas Sands Chief Executive Sheldon Adelson and his family.

The Adelsons gave the funds with no strings attached and no specific expectations, because Gingrich "is an old friend in a time of need," said one person close to the couple. It's wealthy individuals like the Adelsons who are largely powering these new organizations — not major corporations, as many critics on the left had warned. But because companies are probably giving to tax-exempt organizations that do not have to reveal their donors, it is impossible to get a full picture of their influence.

Many members of the millionaires' club have, like Adelson, long been generous political donors and fundraisers. Simmons, Houston home builder Bob Perry and Dallas real estate magnate Harlan Crow are among a group of wealthy Texans that helped finance the Swift Boat Veterans for Truth, an outside group that during the 2004 campaign attacked Democratic presidential nominee John F. Kerry's war record. They and their companies are now backing American Crossroads, the biggest Republican super PAC, which aims to spend $240 million this cycle.

In 2010, Robert Mercer, manager of the New York hedge fund Renaissance Technologies, gave $640,000 to a super PAC that tried unsuccessfully to defeat Democratic Rep. Peter A. DeFazio of Oregon, a vocal Wall Street critic. Last year, Mercer was among 10 individuals or companies writing $1-million checks to Restore Our Future, a pro-Mitt Romney super PAC.

Seven-figure contributions were rarer on the Democratic side, whose super PACs have not yet matched the fundraising of their GOP counterparts. One of the few contributions that large came from DreamWorks Animation Chief Executive Jeffrey Katzenberg, who gave $2 million in May to Priorities USA Action, a super PAC supporting President Obama.

The left relies in this cycle — as it has in the past — on the muscular role of organized labor in funding ads and turning out its members. In this election, the unions are also filling the coffers of new super PACs. The Service Employees International Union, which represents 2 million workers, gave nearly $1.6 million to Democratic-leaning super PACs in 2011. All told, SEIU is expected to spend about $85 million on political activity, equal to the record amount the union dedicated to the 2008 presidential election.

Super PACs sprang up as a result of a series of court decisions in 2010, including the Supreme Court's Citizens United ruling, which freed corporations and unions to spend unlimited amounts on political activity. That decision has been heatedly decried by campaign finance reform advocates and many Democrats, including Obama, who has warned it will lead to a flood of unregulated corporate cash in politics.

It is difficult to determine exactly how much corporate money is in the system, since many of the outside groups are organized as nonprofits, allowing them to keep their donors secret. While American Crossroads, co-founded by GOP political strategist Karl Rove, reported the donors that gave it $18.4 million last year, its nonprofit affiliate, Crossroads GPS, raised an additional $32.6 million from undisclosed contributors.

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