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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK NEW YORK PROGRESS AND PROTECTION PAC, - against JAMES A. WALSH, in his official capacity as Co-Chair of the New York State Board of Elections, et al., Defendants, - and ERIC T. SCHNEIDERMAN, Attorney General of the State of New York, Intervenor-Defendant. CLYDE WILCOX declares as follows under penalty of perjury: I. Overview and Summary of Findings 1. In this declaration I provide an expert opinion for the Attorney General of the State of New York for the case New York Progress and Protection PAC v. Walsh. I have been asked to answer two questions: No. 13 Civ. 6769 (PAC) EXPERT DECLARATION OF CLYDE WILCOX

Plaintiff,

a. If an exception to New Yorks aggregate limit on contributions to political committees were created for contributions to committees that make only independent expenditures, would a significant number of Super PACs form at the state level that closely resemble political party or candidate committees, i.e., committees that declare that they are independent but are staffed by political party insiders and operatives, including close allies of candidates;
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that often support only one candidate; and that receive very large donations in excess of existing limits on contributions to candidates?

b. Do unlimited contributions to such Super PACs pose a substantial risk of corruption or the appearance of corruption?

2. In preparing this report I have reviewed the relevant professional literature in political science, as well as reports from non-profits and state regulatory agencies. I have considered a range of opinions and findings. I have consulted with political scientists who are the leading experts on campaign finance, and reviewed other relevant materials. I also draw on my own experience in studying campaign finance, including many interviews over nearly 30 years with campaign professionals, candidates, and others.

3. I am a professor of government at Georgetown University where I have taught for 26 years. I have studied interest groups and campaign finance for nearly 30 years. I have coauthored two books on individual donors to presidential and congressional elections, a leading textbook on interest groups in elections, now in its 3rd edition, and a leading textbook on interest groups that covers elections, now in its 6th edition. I have co-edited more than a dozen books that deal in some way with interest groups in elections, and have written many book chapters and journal articles on interest groups and campaign finance. I have been invited to lecture on interest groups in elections and campaign finance in a number of countries, and have taught courses on the topic

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recently in Japan and Spain. I have served as an expert witness on campaign finance and interest group cases for the Federal Election Commission and the Justice Department, and have served as a background consultant in other federal cases. I was an expert witness for the Federal Election Commission in the SpeechNow.org v. FEC case in 2008. In December 2013, I submitted an expert declaration in Hispanic Leadership Fund, Inc. v. New York State Board of Elections, No. 12-cv-1337 (N.D.N.Y.). I am being paid $250 per hour to prepare this declaration, which further develops and refines the declaration that I offered in the Hispanic Leadership Fund matter. Attached hereto as Exhibit 1 is a true and correct copy of my current curriculum vitae.

4. I offer the following conclusions: a. If an exception to New Yorks aggregate limit on contributions to political committees were created for contributions to committees that make only independent expenditures, it is almost certain that a large number of Super PACs would form that would be closely linked to individual candidates or to political parties. These Super PACs would serve the same functions as candidate and party committees, thereby allowing very large contributions to benefit candidates and parties that exceed New Yorks contribution limits.

b. Allowing unlimited contributions to Super PACs would pose a substantial risk of corruption and increase the appearance of corruption.

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II.

If an exception to New Yorks aggregate limit on contributions to political committees were created for contributions to committees that make only independent expenditures, it is almost certain that many Super PACs would organize in the state, and that a majority of these would be closely associated with specific candidates or political parties. These committees would operate as auxiliaries of candidate and party campaigns. Large unregulated contributions to these committees would be de facto contributions to candidates and parties. 5. In my opinion, creating an exception to New Yorks aggregate limit on contributions to political committees for contributions to committees that make only independent expenditures would result in the creation of a large number of candidate and partyoriented Super PACs. I base my opinion on past experience with very large contributions to political parties (soft money) and very large contributions to 527 committees that engaged in issue advocacy, where parties and campaigns created procedures to link those contributions directly to candidates, and pressed donors for larger and larger contributions. I base my opinion also on the explosive growth of Super PACs in national elections, and in state and even local elections. 6. Past experience with party soft money shows that when individuals and groups were allowed to make unlimited sized contributions to political parties, there was an explosion in these large donations. Soft money is money that does not count as a contribution under the Federal Election Campaign Actfor example, money donated for party building, get-out-the-vote efforts, or issue advocacy. Parties found ways to link these contributions of soft money to the support of particular candidates. Donors of soft money were given preferential access to policymakers, including presidents and members of Congress. Concerns over the corrupting potential of party soft money led to its ban in the BCRA, which was upheld by the U.S. Supreme Court in McConnell v. FEC, 540 U.S. 93 (2003).
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a. Between the mid-1980s and 2002, when soft money contributions were banned through BCRA, individuals, corporations and labor unions gave increasingly large sums to the soft money accounts of political parties. Wealthy donors were repeatedly asked to give, and asked for increasingly large contributions in settings which guaranteed donors access to make policy arguments. In theory soft money contributions were for party building or to help state and local candidates, but in practice candidates solicited soft money contributions which were then earmarked to their campaigns. Presidential candidates were the most important soft money fundraisers, and donors understood that these contributions would be of great benefit to the candidates. Presidential candidates directly solicited these soft money contributions on behalf of the party. In 1996 for example, Bill Clinton held many soft money fundraising events in the White House and benefitted enormously from targeted party spending before the campaign began in states that his campaign would target.1 Donors also earmarked contributions to aid specific congressional candidates, and made the candidates aware of their generosity.2 These contributions gave donors special access to policymakers, and created the appearance and reality of undue influence over policymakers as well. b. Most of this money came from very large contributions from corporations, interest groups, and individuals. In 2002, more than 365 individuals gave at Clyde Wilcox, Follow the Money: Clinton, Campaign Finance, and Reform, in Understanding the Presidency, eds. James P. Pfiffner and Roger Davidson (2nd edition 2000).
2

Brooks Jackson, Honest Graft (Knopf, 1988).


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least $120,000 apiece in soft money.3 In many cases they did so because they were explicitly promised greater access to policymakers if they gave. In 1996, for example, the Democratic National Committee offered a membership category of Executive Committee to soft money donors of $100,000 or more, and promised opportunities to meet with party officials and exchange views with policymakers. The Republican National Committee made a similar promise to those who gave $100,000 and called them Team 100.4 c. Soft money was raised in circumstances that gave donors special access to policymakers. Presidents Reagan and later Clinton raised soft money in intimate White House coffees, and congressional Republicans held soft money fundraisers before they wrote the final language for legislation of interest to various industries.5 This special access is itself a distortion of the democratic process, but it also creates the opportunity for corrupt deal making. Without special access, soft money donors could not have received the policy outcomes that were detailed in the McConnell case. d. Although congressional soft money contributions were often spent to benefit particular candidates in close races, even those candidates whose campaigns did not receive a soft money boost were grateful for the impact of these funds

Thomas E. Mann, The Rise of Soft Money, in Inside the Campaign Finance Battle, ed. A. Corrado, T. E. Mann and T. Potter (2003). Mark J. Rozell & Clyde Wilcox, Interest Groups in American Campaigns: The New Face of Electioneering (1999). Ruth Marcus, GOPs Issues Conferences Coincided with Hill Action, The Washington Post July 24, 1997 A1.
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on their partys overall fortunes. Policymakers have greater influence when their party is in the majority, and thus appreciate contributions that help those few party candidates who are involved in close elections to win. Party leaders reminded all members of the caucus which individuals and groups had made large soft money contributions, in some cases directly before legislation was marked up or voted on. e. Although it took a few election cycles for parties to realize the full potential of soft money fundraising, they became increasingly dependent on this easy money. Between 1992 and 2002, total Democratic soft money increased from $46 million to more than $246 million, while total Republican soft money increased from $64 million to $250 million.6 The rapid growth of soft money was the result of active and persistent solicitation by policymakers and their agents, and by party officials. In his declaration for the McConnell case, Gerald Greenwald, chairman emeritus of United Airlines, reported that corporations and unions gave soft money because experience has taught that the consequences of failing to contribute (or to contribute enough) may be very negative. Corporate executives complained in the late 1990s about the repeated and escalating requests for contributions, and some companies announced that they would no longer contribute.7

Magleby, David, and Nicole Carlisle Squires, 2004. Party Money in the 2002 Congressional Elections. In David Magleby and Quin Monson (eds.) The Last Hurrah: Soft Money and Issue Advocacy in the 2002 Congressional Elections. Washington, DC: Brookings.
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John M. Broder, Time Warner to End Gifts of Soft Money. The New York Times. November 18, 1999.
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f. As Alan Simpson (R-WY), former Senate Majority Whip noted in his declaration for the McConnell case, Often, donors would give large sums of soft money to attend events with elected officials Party leaders would inform Members at caucus meetings who the big donors were. At these events, it was not uncommon for the donors to mention certain legislation that affected them. Simpsons testimony was echoed by many former and current members of Congress.8 g. The McConnell record is full of examples where large soft money contributions influenced legislative outcomes. Recognizing the potentially corrupting power of large soft money contributions, Congress moved to ban them in BCRA. This ban was upheld by the U.S. Supreme Court in the McConnell case. The court cited several specific instances where large contributions appear to have exerted undue influence on the legislative process. 7. Past experience with 527 committees also informs my opinion that Super PACs would quickly organize in New York if an exception to New Yorks aggregate limit on contributions to political committees were created. Technically, a 527 committee is any organization operated primarily for the purpose of making expenditures for the purpose of influencing elections, 26 U.S.C. 527(e), but in common usage (and in this declaration) the term refers to an organization that does not make expenditures for express advocacy (advocacy that calls for election or

McConnell v. FEC, Declaration of Alan Simpson, Civil Action No. 02-0582, U.S. District Court for the District of Columbia.
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defeat of a particular candidate). For example, in the 2004 presidential campaign, the ads broadcast by 527 committees called Swift Boat Veterans and P.O.W.s for Truth never asked voters to support George W. Bush, but instead attacked John Kerry and ended in tag lines like If we couldnt trust John Kerry then, how can we possibly trust him now?9 The history of 527 committees is similar to that of party soft money, but partisan and campaign activists more quickly recognized the potential for these committees and created 527 groups that were essentially adjuncts of the party and presidential campaigns. Over time the magnitude of giving to 527 committees escalated rapidly. Party activists and candidate campaign officials solicited contributions to 527 committees with the explicit promise that the candidates and the party would be grateful. 527 committees served as surrogates for political parties, allowing a new form of soft money contributions, and by 2004 they served as extensions of presidential campaigns. a. Networks of partisan activists and consultants created a significant number of 527 organizations in the 2000s. Democratic Party chairman Terry McAuliffe gathered a group of DNC leaders to seek a way to continue to deploy large contributions after the BCRA soft money ban went into effect.10 McAuliffe sought a new form of soft money that would not be controlled directly by the parties, but instead by partisan activists and presidential campaign activists. These DNC leaders later met with the heads of Democratic-leaning interest groups including the AFL-CIO, SEIU, EMILYs List, and the Sierra Club to

9 10

Ads can be viewed at https://www.youtube.com/watch?v=ngjUkPbGwAg

McConnell v. FEC, Declaration of Alan Simpson, Civil Action No. 02-0582, U.S. District Court for the District of Columbia
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plan the creation of a series of 527 organizations that would solicit large contributions to fund broadcast advertising, voter registration and mobilization, and a variety of other efforts. Out of these discussions came a variety of new organizations, including Partnership for Americas Families, America Votes, Americans Coming Together (ACT), and the Media Fund. The goal of these organizations was to help elect a Democratic presidential candidate in 2004. Some groups were designed to focus on broadcast advertisements, others for voter mobilization.11 These efforts included Harold Ickes, former Clinton Chief of Staff, and then paid consultant to the DNC. Ickes later ran the Media Fund, and helped to coordinate fundraising for the large Democratic 527s through the Joint Victory Campaign. Ickes is now actively helping form Super PACs to help Hillary Clinton, as described below. b. Republican-leaning organizations such as Progress for America (PFA) were also formed by party activists and consultants, some of whom were also involved in the formation and funding of Swift Boat Veterans and P.O.W.s for Truth. Republican efforts were similarly facilitated by activists with ties to campaigns and the party. PFA was founded by Tony Feather, Political Director of the Bush-Cheney campaign, who then worked as a consultant in a firm that worked for the RNC. To avoid the appearance of coordination, Feather resigned as head of the organization and chose Chris LaCivita as the new head. LaCivita was former Political Director of the National Republican

11

Stephen R. Weissman & Ruth Hassan, BCRA and 527 Groups, in The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act, ed. M. J. Malbin (2006).
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Senatorial Committee. LaCivita later left PFA and consulted on two GOP Senate campaigns, and eventually became a senior strategist for Swift Boat Veterans and POWs for Truth (Weissman and Hassan 2006). Thus even when these 527 committees sought to avoid any legal coordination, other party activists took over who moved in the same circles and talked to the same consultants. c. Party officials sent clear signals to donors identifying 527 committees that were part of the political party network and campaign effort and assuring donors that their contributions to these organizations were encouraged and would be appreciated. Large donors who sought to win favor with policymakers in either political party did not have to work hard to find 527 organizations willing to take their money that were in some way part of this loose party network. Weissman and Hassan note that leaders of Democraticleaning 527 organizations needed to persuade both ideological and access donors that these efforts were serious and recognized by the party.12 They note that To engage potential donors, (Ellen) Malcolm and Ickes explained their well thought out campaign plans and their long-term goal of investing not just in an election but also in building a campaign infrastructure for the party. They also assured many donors of their relationship to the party and the campaigns. Their message was We dont talk to the campaigns, are not

12

The authors note that the distinction between ideology and access is not so stark, quoting megadonor George Soros as saying that I hope I will get a better hearing under Kerry. Stephen R. Weissman & Ruth Hassan, BCRA and 527 Groups, in The Election After Reform: Money, Politics, and the Bipartisan Campaign Reform Act, at 87.
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connected to them, but they know and appreciate us and contributions are part of the public record and they are aware.13 d. To further signal donors of the close connection between the party and these 527 groups, political party operatives recruited former President Bill Clinton, whose close ties to DNC chair Terry McAuliffe were well known. (McAuliffe went on to be chief fundraiser for Hillary Clintons campaign in 2008). He reassured donors. One 527 leader said that He koshered us. He gave the donors confidence, both ideological ones and access ones.14 In other words, Clinton assured donors that these 527 committees were legitimate, run by professionals who would make smart decisions that would help the candidates, and that party leaders would very much appreciate these contributions. Clinton solicited contributions during the campaign for the DNC, for John Kerrys campaign, and for the Media Fund. The leaders of these 527s were visible at the Democratic National Convention, with an office down the hall from the DNC Finance division. e. On the Republican side, groups benefitted from visible signals from party leaders. RNC Chair Ed Gillespie and Bush-Cheney Campaign chair Marc Racicot listed Progress for America as a group that could legally engage (in combat with) Democratic groups. Progress for America leaders believed that this signal from party leaders helped them raise money.15 Thus the leaders of

13 14 15

Id. at 86. Id. at 87.

Id. at 87-88.
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both parties explicitly directed big donors to give to these groups, because they believed they would help the candidates. f. Although technically many of these 527 groups claimed not to have sought to elect or defeat particular candidates, this is a polite fiction. During a press event at the Center for the Study of Elections and Democracy at Brigham Young University, Harold Ickes noted that I wasnt in this to either elect or defeat anybody. I want to make that very clear for those of you out there with subpoenas. The transcript then notes that this claim was greeted with laughter.16 g. Contributions to these party-affiliated 527 committees were widely interpreted by political scientists as a new form of soft money. One recent account of 527 committees concluded that 527s are not independent actors disrupting the party system, but rather well placed participants in party networks that helped the parties.17 Instead of giving money directly to the parties, large donors in 2004 gave large contributions to separate committees run by party activists, assured by party leaders that this would help the candidates and party, and be appreciated. If soft money contributions cause corruption, then large contributions to organizations run by party leaders have the same potential for corruption.

Transcript of panel, Center for the Study of Elections and Democracy at Brigham Young University for the Release of Dancing Without Partners, Feb. 7, 2005. Richard Skinner, Seth Masket, & David Dulio, 527 Committees, Formal Parties, and Party Adaptation, The Forum 11(2): 137, 137 (2013).
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8. Taken together, the experience with soft money and with 527 committees suggests the following. a. When vehicles are allowed to receive unlimited contributions that can help parties and candidates, they become conduits for very large contributions from wealthy donors. Party leaders and campaign officials create special committees that are run by party activists and high level professionals, and develop methods to signal to potential donors that they approve of these committees. This pattern developed slowly with unlimited soft money donations to political parties, more rapidly with unlimited donations to 527 committees, and even more rapidly at the national level with unlimited donations to Super PACs, as we see below. b. Not all 527 committees were or are run by party activists and informally coordinated with the campaigns. But savvy donors will be directed by insiders to the groups that are professionally run and that seek to maximize their benefits to the candidate and party. Thus although some 527 committees are loose cannons and may not directly help the candidate, many others serve as unofficial extensions of parties and campaigns. c. A network of party and campaign activists exists in both parties who move easily among jobs in campaigns, parties, interest groups, and newly created committees so that even in the absence of formally proscribed coordination (e.g., as defined by the Federal Election Commission at 11 C.F.R. 109.21),

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large contributions from donors to nominally independent committees often greatly benefits candidates and parties and are appreciated by them. 9. The history of Super PACs at the Federal level further confirms and makes clear that Super PACs will form quickly and be major players in New York if an exception to New Yorks aggregate limit on contributions to political committees were created for contributions to committees that make only independent expenditures. a. The growth of Super PACs has been extraordinary, both more rapid and more substantial than that of 527 committees. Only 83 Super PACs registered with the FEC in the 2010 election cycle, with moderate levels of spending. But by 2012 the number of Super PACs had exploded to over 1300.18 It took several elections for the soft money system to solidify, a few elections for the 527 system to solidify, and only three years for the Super PAC system to become a major component of political party and candidate strategy. b. The largest and most active Super PACs in the 2012 national elections were either closely affiliated with a single candidate, or allied with a political party. A report by Public Citizen concluded that more than half of all Super PACs were either single candidate committees or party allied committees, and that these committees accounted for some 74% of Super PAC spending in 2012.19

18

Michael Franz, Interest Groups in Electoral Politics: 2012 in Context, The Forum 10(4): 62, 63 (2012).

Public Citizen, Super Connected: Outside Groups Devotion to Individual Candidates and Political Parties Disproves the Supreme Courts Key Assumption in Citizens United that Unregulated Outside Spenders would be Independent (March 2013).
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This percentage is almost certain to increase as candidates quickly move to take advantage of the Super PAC system. c. Campaign officials directed potential donors to give to Super PACs. For example, CBS News reported on Feb 7, 2012 that President Barack Obamas campaign is asking top fundraisers to support a Democratic-leaning outside group that is backing the presidents re-election bid, reversing Obamas opposition to super political action committees, which can spend unlimited amounts of cash to influence elections. Obamas campaign urged wealthy fundraisers in a Monday night conference call to support Priorities USA, a super PAC led by two former Obama aides that has struggled to compete with the tens of millions of dollars collected by Republican-backed outside groups.20 Similar directives were given by Romney, Gingrich, and Santorum campaign officials. Thus the connection between Super PACs and candidates was obvious to potential donors. News media routinely referred to these PACs as candidate PACs.21 d. Candidate Super PACs were directed by those with close connections to the candidate and the campaign. Newt Gingrichs Super PAC was founded and run by former aides. Rick Perrys Super PAC was run by his former Chief of

20

Obama Reverses on SuperPACs, Seeks Support. http://www.cbsnews.com/news/obamareverses-on-super-pacs-seeks-support/ (accessed 12/3/2013).


21

See, e.g., Jeremy Peters, Romney SuperPAC makes $12 million ad buy, New York Times, October 18, 2012; James V. Grimaldi, Billionaire Adelson gives millions to Gingrich Super PAC, Washington Post, January 7, 2012.
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Staff. Farrar-Myers and Skinner detail the connections between the Romney and Obama campaigns and their respective Super PACs: Both the leading presidential candidate Super PACs, Restore Our Future (ROF) supporting Romney and Priorities USA Action supporting Obama (Priorities), had close ties to their respective favored candidates. ROF was founded by Charles Spies, general counsel to Mitt Romneys 2008 presidential campaign. Its board includes two veterans of Romneys 2008 presidential campaign: Carl Forti, who had served as political director, and Larry McCarthy, who had been a top media advisor. [Forti also serves as the political director for American Crossroads.] Steven Roche, a top Romney fundraiser, left the presidential campaign in August to join ROF. Similarly, Priorities was founded in April of 2011 by Bill Burton and Sean Sweeney, two veterans of the Obama White House who respectively served as Deputy Press Secretary and Chief of Staff to former White House Chief of Staff Rahm Emanuel. Its top fundraiser served as Obamas Florida finance chair during the 2008 campaign.22 e. In some cases, candidates Super PACs were primarily funded by a single donor. Gingrichs committee, Winning Our Future, received $11 million from Sheldon Adelson and his wife. Gingrich met privately with Adelson at Adelsons Las Vegas casino, and days later Adelson contributed another $5 million to the PAC. Adelson gave more money to Gingrichs PAC than Gingrichs campaign committee raised from all donors throughout the campaign. Rick Santorums Red, White and Blue Super PAC was funded primarily by Foster Friess, who traveled with Santorum on his campaign bus for three weeks.23 f. In many ways the candidate Super PACs were not just an extension of the campaign, they were the principal campaign vehicle for candidates. Victoria A. Farrar-Myers & Richard Skinner, Super PACs and the 2012 Elections, The Forum 10(4): 105, 113 (2013). Jeff Smith & David C. Kimball, Barking Louder: Interest Groups in the 2012 Election. The Forum 10(4):80, 81 (2013).
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Candidate Super PACs often aired more campaign ads for a candidate than the campaign itself. For example, Mitt Romneys campaign aired some 30,141 broadcast ads during the 2012 primaries, but Restore Our Future, Inc., a Super PAC run by former Romney campaign staffers, aired some 49,661. More strikingly, Newt Gingrichs campaign aired only 6,381 ads during the primaries, but Winning Our Future, a Super PAC run by Gingrichs former aides, aired 11,588. During the GOP primaries, Super PACs aired 82,084 ads, compared to just 63,749 by the candidates. 24 g. The explosion of candidate oriented Super PACs is almost certain to continue, and to spread to congressional and to state and local elections. Even candidates in sparsely populated states are forming Super PACs in advance of the 2014 elections. For example, already two Super PACs have formed in the Alaska U.S. Senate race for 2014 that are clearly linked to particular candidates. In late November, 2013, Alaskas Energy / Americas Values registered with the FEC. The PACs web site proclaims Supporting the candidacy of Daniel Sullivan (R) for U.S. Senate, Alaska.25 h. At the end of January, 2014, a Super PAC called Mississippi Conservatives was formed to help Senator Thad Cochran fend off a primary challenge and to counter Super PAC spending for Cochrans challenger. The Super PAC is advised by Henry Barbour, a member of the Republican National

24

Michael Franz, Interest Groups in Electoral Politics: 2012 in Context, The Forum 10(4): 62, 66 (2012) (table 1). http://www.energyandvalues.com/ (accessed 12/3/2013)
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Committee, and will benefit from fundraising by former Mississippi Governor Haley Barbour.26 i. In Louisiana, persons with direct ties to U.S. Senator David Vitter organized a Super PAC to support him in 2015 and 2016. The Super PAC paid people to raise money for the Super PAC that were also paid fundraisers for Vitters campaign. Specifically, both Vitter and the Super PAC paid long-time Vitter fundraiser Courtney Guastella and the LS Group to raise money. The LS Group is owned by the wife of the Super PACs organizer, Charles Spies, whose law firm represents Vitter.27 Vitter appeared at Super PAC fundraisers and the Super PAC offered contributors a chance to hunt alligators with Vitter for $5,000 per person.28 j. Also in Louisiana, Republican Rep. Bill Cassidys former chief of staff, strategist Josh Robinson, has told several media outlets that he plans to form a super PAC backing his former boss.29

26

Jonathan Martin, Super PAC is Formed in Mississippi to Protect 6-Term Senator in G.O.P. Primary. New York Times January 30, 2014. http://www.nytimes.com/2014/01/31/us/politics/mississippi-super-pac-aims-to-protect-6-termsenator-in-primary.html?_r=0; accessed March 1, 2014.
27

Marsha Schuler, Super PAC Fights for Ability to Raise Unlimited Contributions, The Advocate, Feb. 12, 2014, http://theadvocate.com/home/8321174-125/banking-on-it

28

Michelle Millhollon, Vitter Super PAC raises $1.5 million, The Advocate, Feb. 20, 2014, http://theadvocate.com/news/8045923-123/vitter-super-pac-raises-15

Scott Bland, 10 Super PACs You've Never Heard of That Will Make News in 2014, National Journal, http://www.nationaljournal.com/hotline-on-call/10-super-pacs-you-ve-neverheard-of-that-will-make-news-in-2014-20140117
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k. In North Carolina, supporters of Thom Tillis set up a Super PAC to support him in a U.S. Senate race in 2014. The executive director of the Super PAC, Michael Luethy, is a former staffer for the North Carolina Republican Party and the Republican State Leadership Committee who now heads . . . Oak Grove Campaigns, which provides services to candidates in more than two dozen states.30 l. In California, former U.S. Representative Richard Pombo set up a Super PAC to support two representatives of agricultural districts. Pombo explained that ag interests are all gearing up to get involved and stated that his Super PAC would spend its money on California politicians instead of sending it to other politicians out of state.31 m. In addition to candidate-oriented Super PACs, many Super PACs have formed which are closely allied with political parties. These Super PACs have been widely described as central to party networks. Farrar-Myers and Skinner refer to them as shadow party Super PACs.32 Smith and Kimball report that these PACs are formed by party leaders and allied groups.33 Michael Franz notes that four Super PACs operated to help the four congressional parties (Senate

30

Matthew Burns, Tillis backers form super PAC for possible Senate bid, WRAL.com, http://www.wral.com/tillis-backers-form-super-pac-for-possible-senate-bid/12481395/

John Ellis, New Super-PAC to help Central Valley GOP congressmen, Fresno Bee, June 19, 2013, http://news.fresnobeehive.com/archives/2884 Victoria A. Farrar-Myers & Richard Skinner, Super PACs and the 2012 Elections, The Forum 10(4): 105, 113 (2013). Jeff Smith & David C. Kimball, Barking Louder: Interest Groups in the 2012 Election. The Forum 10(4):80, 82-83 (2013).
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Democrats, Senate Republicans, House Democrats, and House Republicans). He notes that all four were run by former staff of the congressional leadership or by former members of Congress. He argues that an FEC ruling that allowed candidates to appear at fundraising events for Super PACs incentivized congressional leaders to set up parallel Super PACs that advocated for Congressional candidates. He notes that the party-affiliated Super PACs like Majority PAC and House Majority PAC in particular are clearly operating with the same goals as the party committees.34 Political scientist Raymond La Raja observes that these are legally separate from party committees but managed by former staff and working closely with allied interest groups.35 n. The party-affiliated Super PACs and affiliates were major players in the 2012 campaigns. For example, the two American Crossroads organizations, organized by Republican strategist Karl Rove and former GOP chair Ed Gillespie, spent more than $170 million in the 2012 election cycle. Majority PAC, organized to help Senate Democrats, aired more than 20,000 ads in 13 Senate races; its House counterpart the House Majority PAC ran slightly less than 20,000 ads in 44 House races.36

34

Michael Franz, Interest Groups in Electoral Politics: 2012 in Context, The Forum 10(4): 62, 70-71 (2012).

35

Raymond J. La Raja, Why Super PACs: How the American Party System Outgrew the Campaign Finance System, The Forum 10(4): 91, 101 (2013). Michael Franz, Interest Groups in Electoral Politics: 2012 in Context, The Forum 10(4): 62, 69-70 (2012) (tables 3 & 4).
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o. Party leaders appeared at fundraising events for these partisan PACs, and partisan activists solicited contributions in a way that assured donors that their contributions would be appreciated. There is a network of party leaders in New York who would stand ready to do this at the state level. 10. The experience of other states suggests that many candidate and partisan Super PACs will form if an exception to New Yorks aggregate limit on contributions to political committees were created. a. California imposed contribution limits on candidates in 2000, but continued to allow unlimited contributions to independent expenditure committees. Spending by these committees rapidly increased, and many of these committees were linked to candidates or parties. For example, two individuals provided more than 80% of the nearly $10,000,000 spent by Californians for Better Government on behalf of California State Treasurer Phil Angelides in his campaign in the Democratic primary for governor in 2006. In 2008, Valley Democrats for Change spent $385,000 to help Assembly candidate Bob Blumenfield in the Democratic primary. The Super PAC was funded primarily by two people with close personal ties to Blumenfield. b. More recently, California has experienced a surge in Super PACs that have played a major role in state elections. In June, 2013 NBC News reported that a number of Super PACs had formed to aid specific candidates and to act as party proxies. The report notes that Super PACs were active not only in U.S.
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House races but in state elections as well, and that the GOPs Super PAC Congressional Leadership Fund, bolstered by a $5 million contribution from Adelson, had created a California affiliate, the California Leadership Fund. The report notes that Super PACs will be crucial to the strategy of both major parties37 c. In Vermont, which has recently permitted unlimited contributions to Super PACs, a Super PAC associated with GOP candidate Wendy Wilton spent more money than all other actors combined, including both political parties and both the GOP and Democratic campaign committees. d. In Hawaii, creating an exception to contribution limits for independent committees had an immediate effect. After a federal court barred enforcement of Hawaiis limit on contributions to independent committees in 2012, a union formed and financed a Super PAC that outspent the candidate for mayor of Honolulu that it opposed by a margin of nearly three to one ($3.6 million to $1.43 million). The Super PAC, Pacific Resources Partnership, may be singlehandedly responsible for electing Kirk Caldwell, who had trailed in the polls to frontrunner and former Governor of Hawaii Ben Cayetano.38

Sherry Bebitch Jeffe, Super PACs: California Here We Come. NBC Bay Area June 1, 2012. http://www.nbcbayarea.com/blogs/prop-zero/Super-PACs-California-Here-They-Come156392675.html (accessed 12/4/2013). Jim Dooley, Caldwell, PAC Spent $5 Million In Mayoral Campaign, Hawaii Reporter, Dec. 6, 2012, http://www.hawaiireporter.com/cadlwell-pac-spent-5-million-in-mayoral-campaign/123
23
38

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e. In many states there are multiple transfers across Super PACs that make transparency difficult.39 In one case in the state of Washington, a single individual organized dozens of Super PACs that transferred money among themselves. Ultimately most of these PACs were funded by unions, but the shuffling of funds made it difficult to trace.40 f. Super PACs have already appeared at the state level in many other states, usually as partisan groups that are acting as party organizations in all but the most formal sense of the term.41 g. In states with many competing interests and expensive elections, there will be professional consultants and party professionals who stand ready to use new vehicles to channel large contributions into elections. New York has a political culture that would facilitate the quick growth of Super PACs. The Preliminary Report of the Commission to Investigate Public Corruption concluded that the state has a campaign finance system dominated by accessseeking donors, that parties use Housekeeping Accounts that are functionally identical to national soft money accounts banned by BCRA, and

Nicholas Confessore, A National Strategy Funds State Political Monopolies, The New York Times, Jan. 11, 2014. Keith E. Hamm, Michael J. Malbin, Jaclyn Kettler, & Brendan Gavin, The Impact of Citizens United in the States: Independent Spending in State Elections, 2006-2010 (2012updated version of paper presented at the 2012 APSA Meeting, New Orleans).
41 40

39

Id. Abstract.
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that there are already undisclosed independent expenditure campaigns by 501(c)(4) groups from out of state.42 h. Dr. Michael Malbin of SUNY Albany concludes that There is no reason in the world why it [candidate and party oriented Super PACs] should not migrate to New York.43 Malbin is a leading expert on state campaign finance and also on state Super PACs. i. The experience of the plaintiff in this very case suggests that Super PACs will rapidly form in New York. The New York Progress and Protection PAC was formed to support GOP candidate Joseph J. Lhota. Although the PAC was unable to receive unlimited contributions until October 24, 2013, the date on which the district court entered a preliminary injunction, and Lhota trailed by a huge margin at that time in the polls, the PAC raised $230,000 before the election, including a $200,000 contribution from David Koch that would exceed the New York contribution limit. The Super PAC managed to air commercials in this short amount of time. 11. Taken together, there is ample evidence that Super PACs would quickly grow and flourish in New York if an exception to its contribution limits were created for independent expenditure committees. Experience at the federal level with soft money, 527 committees and then Super PACs suggests that a network of partisan activists stands ready to quickly mobilize and transfer money to new committees. Commission to Investigate Public Corruption, Kathleen Rice, Milton Williams Jr., and William Fitzpatrick (chairs) Preliminary Report, Dec. 2, 2013.
43

42

Personal communication, 11/29/2013.


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The experience in other states and in New York City also provides evidence of the almost certain course of New York campaign finance if the limit were lifted. III. Allowing unlimited contributions to Super PACs would pose a substantial risk of corruption and increase the appearance of corruption. 12. Candidate and party allied Super PACs are best thought of as extensions of the campaigns. Candidates and political parties are grateful for direct contributions because they help them win elections. But contributions to other groups that help the candidate or party win are also appreciated, and candidates have openly asked for these contributions and expressed gratitude for them. I base my opinion on evidence from 527 committees which aided candidates through issue advocacy, and on Super PACs in the past two elections, which have been formed by campaign activists explicitly to help elect the candidate, and where candidates have explicitly expressed gratitude for this assistance. 13. Direct contributions are potentially corrupting because candidates and parties benefit from the spending, and because these contributions create an opportunity for an exchange, or quid pro quo, of money for undue legislative influence. But candidates and parties benefitted from the issue advocacy of 527 committees, and benefitted from the express advocacy of Super PACs as well. This is because 527 issue advocacy and spending by candidate and party Super PACs is carefully controlled to benefit the candidates, and there is a network of communications that allows for de facto coordination in the absence of legal coordination.

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14. Issue advocacy by 527 committees on behalf of specific candidates affected campaign outcomes. Super PACs can engage in express advocacy, and political actors have clearly chosen to channel their efforts into Super PACs rather than 527s in 2010 and 2012. This is because campaign professionals believe that express advocacy is even more effective in helping candidates than issue advocacy. a. Donors and activists would not invest in issue advocacy and Super PACs if they did not think they were effective. They base their conclusion on research and advice of consultants. Speaking of issue advocacy campaigns, David Magleby and Jonathan Tanner concluded that An indication of the confidence that individuals place in the effectiveness of electoral issue advocacy is the large investment they make in it.44 In 2012, individuals and groups made a much larger investment in Super PACs. The substantial effort invested in creating and raising money for Super PACs, combined with the very large sums raised by these committees, is evidence that donors, campaign consultants, candidates and parties think that they influence election outcomes. b. Issue advocacy had a significant impact on election outcomes. Statistical studies have demonstrated this impact. Political scientist Gary Jacobson, one of the leading experts on Congressional elections, concludes from his careful statistical analysis of the impact of the AFL-CIOs issue advocacy campaigns

44

David B. Magleby & Jonathan W. Tanner, Interest-Group Electioneering in the 2002 Congressional Elections, in The Last Hurrah? Soft Money and Issue Advocacy in the 2002 Congressional Elections, eds. D. B. Magleby and J. Q. Monson (2002).
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in 1996 that labor can plausibly claim responsibility for defeating a majority of first term [Republican] losers. Thus, money spent outside the regular campaigns on voter education can have a major effect on election results.45 Political scientists credit the Swift Boat Veterans ads in 2004 for helping to undo John Kerrys momentum and increase voter distrust of Kerry.46 Magleby, Monson, and Patterson reported results from survey data of voters that showed that the Swift Boat ads were widely seen and on net hurt the Kerry campaign. They also report that Democrats and Republicans [consultants] alike concur that the Swift Boat ad hurt Kerry badly.47 The Swift Boat ads were more effective than a similarly-sized gift to the BushCheney campaign, because they would have invoked more suspicion if they were paid for by the campaign. c. Campaign consultants have stated that they believe that even issue advocacy ads influence election outcomes. In the depositions for McConnell, for example, Republican consultant Rocky Pennington concluded that Interest group broadcast ads had a very significant effect on the outcome of the 2000 Congressional race, especially the ads run by the Club for Growth. He Gary Jacobson, The Effects of the AFL-CIOs Voter Education Campaigns on the 1996 House Elections, Journal of Politics 61 (1): 185-94 (1999).
46

45

Christopher P. Borick, The Swift Boat Ads and the John Kerry Campaign: A Question of Advertising Effectiveness, Public Opinion Pros (2005) http://www.publicopinionpros.norc.org/features/2005/aug/borick.asp (accessed 12/13/2013). David B. Magleby, J. Quin Monson, & Kelly D. Patterson, The Morning After: The Lingering Effects of a Night Spent Dancing, in Dancing Without Partners: How Candidates, Parties, and Interest Groups Interact in the Presidential Campaign, at 25, eds. D. B. Magleby, J. Q. Monson & K. D. Patterson (2007).
28

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reports that one of these ads, run just before the primary, led directly to the failure of a Republican primary candidate to win the primary. He argues that radio ads by interest groups also mattered, concluding that one ad against Mr. Sublette [his candidate in the race] cost us a couple of points.48 Joe Lamson, a consultant who managed Democratic candidate Bill Yellowtails Congressional campaign in Montana, reported that ads run by a group called Citizens for Reform were important in the election. He notes that polling data before these ads aired showed Yellowtail ahead by eight points, and that polling just after the ads ended showed that he trailed by five points. He concludes that I believe the Citizens for Reform ads were a big factor in this change, and in Mr. Hills victory in the election.49 Terry Beckett, a Democratic consultant, concluded that based on [his] observations, these ads affected the outcome of the Republican primary ad run-off and the general elections. She argues that ads by groups such as the Club for Growth were primarily responsible for the outcome in a 2000 congressional race.50 d. Because candidates PACs may claim to have legal independence from the campaign, they can concentrate on attack ads while allowing the candidate some plausible deniability. Terry Dolan, director of the National Conservative Political Action committee (NCPAC) the first PAC to make

48

McConnell v. FEC, Declaration of Rocky Pennington, Civil Action No. 02-0582, US District Court for the District of Columbia.

McConnell v. FEC, Declaration of Joe Lamson, Civil Action No. 02-0582, US District Court for the District of Columbia.
50

49

McConnell v. FEC, Declaration of Terry Beckett, Civil Action No. 02-0582, US District Court for the District of Columbia.
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substantial independent expenditures in the 1980 Senate campaigns, summed up this advantage succinctly when he said that A group like ours could lie through its teeth, and the candidate it helps stays clean. The vast majority of candidate Super PAC ads were attack ads, which generally adopted a tone that might backfire on candidates. One recent study has suggested that attack ads sponsored by unknown independent groups are more effective, on net, than ads sponsored by the candidate. The authors argue that voters discount attack ads sponsored by a candidate as biased, but are more accepting of such ads sponsored by groups with innocuous names.51 e. Super PACs are now forming to perform specific functions for campaigns, mirroring the specialization of Democratic 527 committees in 2004. For example, the new Super PAC Ready for Hillary, formed in advance of her candidacy announcement, is for now concentrating on building a small donor fundraising list for the candidate. Journalists report that the widespread belief is that several Ready for Hillary staff members would take up positions in the campaign.52 Harold Ickes, who helped build the Democratic party 527 network in 2004, stated that If she decides to run, then within the confines of the law, these names and addresses will be given to the campaign.53

51

Deborah Jordan Brooks & Michael Murov, Assessing Accountability in a Post-Citizens United Era: The Effect of Attack Ad Sponsorship, American Politics Research 40: 338-418. P338 (2012). Amy Chozick, Super PAC Gets Early Start on Pushing for a 2016 Clinton Campaign, The New York Times, Nov. 3, 2013.
53 52

Nicholas Confessore, A Bet on Clinton: If They Network, She Will Run, The New York Times, July 29, 2013.
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15. Candidates have openly stated that Super PACs influenced or will influence the outcome of their elections. a. There are many examples, but consider the following fundraising video for the House Democrats Super PAC:54 SCRIPT FOR AMERICAN MAJORITY PAC VIDEO You know in 2010 we fought a very hard race and we kept closing the gap. We got it down to single digits at the end of the race, and two weeks out Karl Rove and American crossroads came and they poured $700,000 into a single week of television against us. That had a dramatic impact in driving our momentum backwards, and that was probably the major reason why we lost in 2010. We were grateful to see House Majority PAC formed so we could actually have allies on our side that were helping us get our message out. And that, really, in many ways, was probably the difference in the outcome and one of the big reasons why we won this time. (Congressman Ami Bera) Karl Rove and the outside interest groups were filling the airways trying to drown us out. And there was House Majority PAC offering critical pushback exactly at the time that we needed it. (Congresswoman Cheri Bustos) The thing about the House Majority PAC is they know what it takes. Theyre smarter, more efficient. Their ads on stem cell research made a big difference in my campaign. (Congressman Patrick Murphy) We were in a dog fight there at the end and over $2 million of outside money in under two weeks at the end. It was a ton of bricks and if we hadnt have had help to pushback to make sure our positive message for change was getting out, I dont think we wouldve been able to do it. I wouldnt be here today if it werent for the tremendous help of the House Majority PAC. (Congresswoman Elizabeth Esty) Not everyone gets the importance of the Latino vote. But just like the community members invested in my American dream, the House Majority PAC believes in that American dream. They believe they can make the investments thats going to make a difference in the future with new ways of persuading and motivating the Latino vote. (Congressman Raul Ruiz) The worst came 10 days before the election. Big oil gave a huge chunk of money and dumped that money against me. We risked losing it all. Well, just two days later, I got the news that House Majority PAC went back up on the air, for the second time,

54

http://www.thehousemajoritypac.com/our-work/united-states/house-majority-pac-we-makethe-difference (accessed 12/13/2013).


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talking about my opponents very, very, extreme positions on womens issues and womens rights. (Congresswoman Kyrsten Sinema). Look, I wanted to play my part in turning the page on the tea party. The only problem was that the interests I was running against were some of the best funded, best organized interests in the country. House Majority PAC really knows how to get the biggest bang for the buck. They found the undecided voters in my district and communicated effectively on cable, on TV, and in the mail. I simply couldn't have done it without them. (Congressman Sean Patrick Maloney) RESULTS Democrats pick up eight seats; House majority PAC won nearly 2/3 of the races in which they invested (The Hill); House majority PAC coordinated with other progressive groups to pool resources and research in a targeted way (NBC); an impressive showing (The Hill); The first caucus in the history of civilized government to have a majority of women and minorities (Yahoo News); downright artful (Roll Call); Devastatingly Effective (Politico). (voiceover). If it werent for House majority PAC I wouldnt be here today. (Kyrsten Sinema) When we got word that Darth Vader himself, Karl Rove and the Crossroads was coming in, you had to recruit the team to fight back and destroy that Death Star, and we fought back and we won. (Congressman Raul Ruiz) Smart. Creative. Effective. WE MAKE THE DIFFERENCE. b. Candidates are seeking Super PAC contributions by telling donors that these groups will make a difference. Terry Lynn Land, running for a GOP Senate nomination in Michigan, says on video that So, my husband and I, like I said, are committed to this. Were out on the road, were raising money, its going to take a lot of resources to do this. Its probably a $20 million campaign. But the reality is, weve got new folks out there who are raising money. Thats the super PACs. She went on to say that Now, our campaign has talked to a lot of those folks. Theyre committed to Michigan.55 This example also shows

55

Video clip available at http://www.huffingtonpost.com/2013/09/25/terri-lynn-land-superpac_n_3982274.html (accessed 12/4/2013).


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how candidates are able to steer donors to Super PACs that effectively help their campaigns. c. Additional evidence that politicians think that Super PAC spending influences elections is the efforts that some make to deter donors from giving to Super PACs helping their opponents. GOP party leaders, especially Senate Majority Leader Mitch McConnell, have explicitly discouraged donors to FreedomWorks, a Tea Party aligned Super PAC. Clearly these incumbent Senators believe that spending by FreedomWorks influences GOP primary outcomes. The president of FreedomWorks has stated that Ive been told by a number of donors to our Super PAC that theyve received calls from senior Republican Senators. I cant give to you because Ive been told I wont have access to Republican Leadership (if I do). McConnell directed the Republican Senatorial Committee to cut ties with advertising firms that worked for Senate Conservative Fund a Super PAC that supports challengers to GOP Senate incumbents. Party leaders would only go to this effort if they thought that Super PAC spending mattered in election outcomes.56 16. Candidates are grateful for Super PAC help, and to the large donors who finance them. They were grateful for even the less direct assistance of 527 committees.

56

Jeremy W. Peters, Chastened G.O.P. Tries to Foil Insurgents at Primary Level. The New York Times Feb 9., 2014. //nyti.ns/1fWWdf3; accessed 3/1/2014.
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a. Candidates have spoken openly of their gratitude for contributions to Super PACs. Perhaps the most explicit was Newt Gingrich, who told an audience of supporters that : Of course, while they werent directly associated with the campaign, it would be impossible for me to be here without Sheldon and Miriam Adelson, who single-handedly came very, very close to matching Romneys super-PAC. Im very, very grateful.57 The web site for Restore our Future thanks donors: Thank you for your support of Restore Our Future and Governor Romney.58 b. The independent expenditure campaigns by labor unions on behalf of Bill de Blasio in 2013 strongly suggest that these campaigns are aimed to win the gratitude of candidates. Common Cause has analyzed independent expenditures in New York Citys mayoral race, and concluded that late spending by New York Progress funded by a coalition of unions, was not aimed at influencing the outcome of the election but rather to earn the gratitude of de Blasio. The group spent more than $1 million in ads attacking Lhota, after backing de Blasios opponent, Christine Quinn, in the primary. Common Cause concludes that Considering that the general election for mayor was constantly polling at a 40 point margin, it appears that the spending by labor unions who had endorsed de Blasios opponents in the

Jennifer Lipman, Gingrich says Goodbye, Thanks Sheldon Adelson, The Jewish Chronicle Online, May 3, 2012. http://www.thejc.com/news/world-news/67088/gingrich-says-goodbyethanks-sheldon-adelson (accessed 12/5/2013).
58

57

http://restoreourfuture.com/ (accessed 12/12/2013).


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primary may have been made more with the intent to curry favor than to ensure victory. c. The longer experience of 527 committees in issue advocacy campaigns combined with the extensive discovery process in McConnell has provided ample evidence that candidates were very grateful for issue advocacy campaigns on their behalf. It stands to reason that they will be even more grateful for direct advocacy by Super PACs. d. Speaking of issue advocacy campaigns, political science professor David Magleby argues that candidates know who gives to independent expenditure groups, and those who benefit from those expenditures are grateful. In the current team sport approach to campaigns, there is an implicit division of labor so that independent groups can do the most hardhitting, negative attacks, allowing the candidate to stand apart, and above them. This only furthers the candidates appreciation for the independent expenditures.59 e. In the lengthy discovery process for McConnell, a number of former policymakers and candidates attested to the gratitude of candidates to those who funded key issue advocacy campaigns. For example, former Senator Alan Simpson, in his declaration for the McConnell case, noted that These ads are very effective in influencing the outcome of elections, and the people who admit to running these ads will later remind Members of how the ads helped get them elected. Members realize how effective these ads are, and they may

59

Personal interview, August 7, 2008.


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well express their gratitude to the individuals and groups who run them. Senator Dale Bumpers testified that Candidates whose campaigns benefit from these ads greatly appreciate the help of these groups. In fact, Members will also be more favorably disposed to those who finance these groups when they later seek access to discuss pending legislation. Elaine Bloom, congressional candidate in 2000 in Floridas 22nd district, said in her declaration for McConnell that her campaign taped ads run by groups that supported and opposed her, and made sure I knew what was going on. She noted that The AFL-CIO and the Florida Democratic Party ran many issue ads in support of my campaign and these surely influenced the outcome to my benefit. She further argues that ads run by Citizens for Better Medicare and the Republican Party were deciding factors in the race. She notes that she appreciated the ads described above that were run by political parties and interest groups although she did not know in advance that they would be run.60 The National Federation of Independent Business (NFIB) reportedly spent $100,000 to help Randy Forbes win a special election for Congress in Virginia in 2001, primarily through radio ads. Forbes reportedly called NIFB President Jack Farris to thank him, saying If it hadnt been for your people, I wouldnt have won.61 Linda Chapin, congressional candidate in Floridas 8th district in 2000, reported in her declaration for the McConnell case that EMILYs List ran ads for her based on gun safety issues (not the central

60

McConnell v. FEC, Declaration of Elaine Bloom, Civil Action No. 02-0582, US District Court for the District of Columbia.

Juliet Eiperin, Small Business Group Sticks to One Side of Political Fence, The Washington Post, May 16, 2002, A23.
36

61

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concern of the organization) primarily to help her campaign. She stated that Federal candidates appreciate interest group electioneering ads like those described above that benefit their campaigns, just as they appreciate large donations that help their campaigns. I appreciated the ads run by EMILYs List on my behalf. In general, candidates in the midst of a hard-fought election like mine appreciate any help that comes their way. (emphasis added). f. In McConnell, several consultants attested to the gratitude of candidates to donors to issue advocacy campaigns. Democratic consultant Joe Lamson concluded in his declaration that if you are in a close race and there are interest groups out there helping you with things like broadcast issue ads, you usually appreciate the support. Republican consultant Rocky Pennington claimed in his declaration that usually the ads are helpful and candidates appreciate them. He went on to add that In addition to trying to elect candidates, these groups are often trying to create appreciation or even obligation on the part of successful candidates. And candidates usually do appreciate this kind of help, even when they deny it publicly, which they usually do. 17. Contributions to candidate Super PACs and party Super PACs are functionally very similar to contributions to candidates and parties. a. The central role of Super PACs to campaigns is evidenced by the role of the activists who headed up the efforts. Obamas Super PAC, Priorities USA
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Action, was founded by Bill Burton, the 2008 press secretary for the Obama campaign, and deputy press secretary in the White House, and Sean Sweeney, who was chief of staff to Rahm Emanuel in the White House. In September, 2012, Rahm Emanuel stepped down as campaign co-chair to raise money for Priorities USA. In discussing the move of such a high ranking campaign official to the Super PAC, Obama campaign spokeswoman Jen Psaki said that Were not going to bring a butter knife to a gun fight. Mitt Romneys Super PAC Restore Our Future was cofounded by Carl Forti, who served as political director of Romneys 2008 campaign, and its treasurer Charles Spies was chief financial officer and counsel to Romneys 2008 campaign. Instead of using these experienced hands in the campaign, the candidates sent them to help raise money and direct spending of the Super PACs. This suggests that candidates believed that these experienced and trusted aides could help them more at the Super PAC than in the campaign. b. Rules against coordination do not prevent candidate Super PACs from engaging in campaign strategies that greatly aid the candidate. It is difficult to police the boundary of coordination; only a whistle blower revealed the likely coordination between U.S. Representative Michele Bachmanns presidential campaign and her Super PAC.62 But even without explicitly coordinating, many adapt strategies to supplement those of the candidate or party. Super PAC directors are part of a dense network of partisan activists through which

62

Trip Gabriel, New Inquiry for Bachman on her Presidential Race, The New York Times, Sept. 5, 2013.
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information flows rapidly, even without explicit coordination. There are many signaling devices to help independent groups help candidates without explicitly coordinating. For example, in 2010, the National Republican Congressional Committee (RNCC) publicly released its advertising plans, thereby allowing independent groups to plan strategies to coordinate.63 In 2011-12, John Lapp ran the Democratic Congressional Campaign Committees independent expenditure effort while his wife Ali ran House Majority PAC, a Super PAC that also ran independent expenditures. In one striking occasion, the DCCC and House Majority PAC ran similar ads citing the same line from the Wall Street Journal, but the Lapps claim to have not coordinated, saying that they spend their time talking about the potty training of their two year old, not campaign ads.64 When top campaign professionals operate in a network of shared information, they do not have to reach explicit agreements on strategy or tactics to be as effective or nearly as effective as the candidates campaign committee. There are many shared nodes in these networks. For example, Romneys campaign committee and his Super PAC used the same direct mail firm to reach voters, TargetPoint. There were a

63

Kenneth P. Vogel & Alex Isenstadt, When Coordinate is a Dirty Word, Politico (2011). http://www.politico.com/news/stories/0511/55911_Page2.html (accessed 12/5/2013).

Jeff Smith & David C. Kimball, Barking Louder: Interest Groups in the 2012 Election, The Forum 10(4):80, 81 (2013).
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handful of other connected firms that worked with both committees in the same suite of offices.65 c. There are instances where Super PACs and parties announce their strategies and respond to one another. In their study of Super PACs in 2012, FarrarMyers and Skinner conclude that Evidence suggests independent expenditures can and have been functionally coordinated with a campaign, even if all individuals and organizations are complying with applicable law. They go on to point to the 2010 Congressional election in Texass 17th District, where Independent organizations ran ads that mirrored Floress own campaign ads, and when outside groups announced that they were running ads in the last week before the election, the National Republican Campaign Committee diverted $75,000 that it had earmarked for spending in the Edwards-Flores race to other races.66 d. Candidates have tempered their language to fit legal restrictions but have implicitly asked for contributions to candidate and party Super PACs. At a campaign fundraiser in September, 2012, for example, Obama warned that conservatives have super PACs that are writing $10 million checks and have the capacity to just bury us under the kind of advertising weve never seen before. He then noted that if somebody here has a $10 million check, I

Mike McIntire and Michael Luo, Fine Line between Super PACs and Campaigns, The New York Times, February 25, 2012. http://www.nytimes.com/2012/02/26/us/politics/loose-borderof-super-pac-and-romney-campaign.html?pagewanted=all&_r=0 (accessed 12/6/2013).
65

66

Farrar-Myers & Skinner, op. cit., p 111.


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cant solicit it from you but feel free to use it wisely.67 Romney attended many fundraisers for his Super PAC, but always left just before the close asking for contributions. In at least one instance, Romney characterized a contribution to Restore Our Future as being to me.68 House and Senate party leaders attend fundraisers for their respective Super PACs, and circulate among donors having informal contributions. And as noted above, Gingrich interrupted his campaigning to fly to Adelsons casino for a private meeting, and within a few days Adelson had contributed an additional $5 million. e. Candidate Super PACs are not similar to single individuals or small companies making independent expenditures; they are closer to the model of presidential candidate PACs that presidential candidates used in the 1980s, which were used by candidates to finance their pre-candidacy campaigning. Anthony Corrado detailed the ways in which these PACs undermined campaign finance regulations, including making the system less transparent and allowing wealthy donors to avoid contribution limits.69 Corrado noted that these PACs were an essential part of candidate strategy, and that contributions to these theoretically independent PACs should be thought of as contributions to the candidate. This is even more true for candidate Super

President Obama, Remarks at the Waldorf Astoria, White House Transcript (Sept. 18, 2012), http://1.usa.gov/PSVvn0.
67

Romney $1 Million Mystery Corporate Donation (You Tube video, uploaded Aug. 25, 2011), http://bit.ly/UmQvWC.
68

69

Anthony Corrado, Creative Campaigning: PACs and the Presidential Selection Process (1988).
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PACs, which as we have seen often air many more ads than the candidates themselves. f. Federal Judge Richard Posner has written that it is difficult to see what practical difference there is between super PAC donations and direct campaign donations, from a corruption standpoint A super PAC is a valuable weapon for a campaign ; the donors to it are known; and it is unclear why they should expect less quid pro quo from their favored candidate if hes successful than a direct donor to the candidates campaign would be.70 g. David Magleby, a leading expert on interest groups in campaigns, states that Candidate and party leader connected Super PACS are seen by the candidates and party leaders as extensions of their disclosed and limited fundraising. Evidence for this is the fact that candidates and party leaders can speak to Super PAC donors about the purpose and importance of the Super PAC, they have access to information on who contributed to Super PACs and the leaders of candidate and party leader centered Super PACs often previously worked closely with the candidate or party leader.71 18. Super PAC contributions are raised in a way that increases the likelihood of corruption and greatly increases the appearance of corruption. Donors have intimate access to candidates and party leaders, and their very large contributions are essential to candidate strategies, giving them leverage over candidates. Because mega-donors

70

Richard Posner, Unlimited Campaign SpendingA Good Thing? THE BECKER-POSNER BLOG (April 8, 2012), http://bit.ly/S1c8xU.
71

Personal communication, 12/7/2013.


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often meet with candidates both in public and in private, the same opportunities for quid pro quo exchange that exist in the context of direct contributions to candidates also exist in the context of donations to Super PACs that support a candidate. The magnitude of the contributions, and the centrality of a small number of mega donors further increases the risk of corruption. a. Super PAC donors are courted by candidates and their proxies with phone calls and personal meetings. Mega-donors often have many one-on-one meetings with the candidates, who ask for more money. As noted above, Newt Gingrich took time from his campaign to fly to Las Vegas to Adelsons casino, and was rewarded by an additional large contribution. Friess traveled on the Santorum bus for three weeks. Candidates and policymakers appear at their PACs fundraising events and socialize and mingle with the crowd. Jim Messina, Obamas 2012 campaign manager, told supporters in an email that Senior campaign officials as well as some White House and Cabinet officials will attend and speak at Priorities USA fundraising events.72 b. Potential Super PAC donors may threaten to withhold contributions unless a candidate changes his or her position on an issue. Although this is more likely to occur among donors who seek material benefits, ideological donors may do this as well. In May, 2012 leading GLBT and progressive donors refused to give more money to Obamas Super PAC in protest over his refusal to sign an executive order barring same-sex discrimination among federal contractors. A

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Jim Messina, We Will Not Play by Two Sets of Rules, BarackObama.com (blog) (Feb. 6, 2012), http://bit.ly/yOWH1f.
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political advisor to megadonor Jonathan Lewis noted that A number of gay and progressive donors, unsolicited, have indicated to us that they arent considering requests to donate to the Obama Super PAC because of the presidents refusal to the sign the order. And those are high-dollar asks, some in the seven digits. We have heard from at least half a dozen major gay and progressive donors that they stand united with us. There is still time for the President to do the right thing and sign this executive order, our great hope is that he does so immediately.73 Although Obama did not reverse his position on this issue, two days after the article was published he announced his support for same-sex marriage. c. Candidates were in the past offered issue advocacy support if they would change their positions on issues. This almost certainly will happen with Super PAC contributions as well, since they are more valuable. In declarations in the McConnell case, candidates and policymakers reported being offered substantial independent expenditure campaigns if they adopted their position on key issues. For example, Linda Chapin noted in her declaration that while discussing electioneering by interest groups At least one other group offered to provide campaign support if I would agree to vote a certain way on their issues. I let them know what my position was, but they wanted me to change it somewhat and I did not agree to that. Chapins point is echoed by other

73

Greg Sargent, Top Obama Donors Withholding Money Over Executive Order Punt, The Washington Post, May 7, 2012. http://www.washingtonpost.com/blogs/plum-line/post/topobama-donors-witholding-money-over-executive-orderpunt/2012/05/07/gIQAPKsl8T_blog.html (accessed 12/6/2013).
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candidates, who say that groups sometimes promise large independent expenditure campaigns in exchange for particular policies. For example, in 1998 U.S. Rep. Vince Snowbarger charged that a consulting firm representing Native American gaming concerns promised that the congressman would benefit from substantial independent expenditures, including a very aggressive mail and phone campaign over the last five or six days of the campaign targeted solely at Wyandotte County if he would agree to help the Wyandot Tribe of Oklahoma open a casino.74 In this case, a group offered an attempted quid pro quo for an independent expenditure campaign. d. There have been proven instances where independent expenditures are linked to corruption. i. In West Virginias state Supreme Court race in 2004, Massey Energy president Donald Blankenship created an independent expenditure group called And for the Sake of the Kids, and contributed $3.5 million to the group, which sought to help defeat incumbent justice Darrell McGraw and to elect Justice Brent Benjamin. Justice Benjamin has since refused to recuse himself from key cases involving Massey Energy. He voted with a majority in April, 2008 to void a $70 million judgment against Massey, despite petitions from Harman Mining that claimed that Benjamin had benefitted from what

74

Tim Carpenter, Kansas Lawmaker Alleges Bribery Try on Gaming Issue, Journal-World (Lawrence, Kansas). October 8, 2008.

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amounted to an unprecedented campaign contribution. This is an example of an independent expenditure campaign at the state level funded by very large contributions, which is widely seen as having resulted in significant policy payoffs for the donor. ii. In Wisconsin, Democratic state Senate Majority Leader Charles Chvala negotiated a plea bargain on charges that he set up independent expenditure groups under his control for state elections, and repeatedly told lobbyists that he would hold up votes on their measures unless they contributed to these groups and to Democratic Senate candidates. These groups then spent the money to help elect Democratic Senate candidates. In this case, a politician requested contributions to independent expenditure campaigns and explicitly threatened to influence policy if the contributions were not made. The criminal charges made it clear that Chvala had the ability to block legislation in the state senate, and listed several instances where legislation was blocked until contributions were made, and where explicit discussions were had about the amounts that must be contributed before action would be taken. The State of Wisconsins sentencing memorandum to the judge in the case noted a pattern of using bogus independent expenditure groups, and that the use of these groups denied the publics right to know who was paying for campaigns. The memorandum goes on to note that Chvala had pressured corporate donors to contribute to these independent expenditure campaigns
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under threat that their interests would suffer in legislation pending before the legislature . iii. In Nebraska, Regent Drew Miller admitted to sending an e-mail requesting that his supporters set up an independent group called Defenders of Medical Research, and asking that the e-mail not be forwarded. The organization was subsequently set up and funded, and spent money on behalf of Miller. The Nebraska Accountability and Disclosure Commission unanimously voted that Miller had violated the law, and ordered civil penalties. iv. In 1998, Republican Majority Leader Mitch McConnell promised Republican senators that the Tobacco industry would mount a television campaign to support those who voted to kill comprehensive tobacco legislation. After assessing the role of tobacco contributions on voting by Senators on past legislation, the Wall Street Journal reported that The lesson for the tobacco industry might be that hard hitting ads are more effective than campaign contributions. In his declaration for the McConnell case, Republican senator John McCain confirmed the accuracy of this report, noting that essentially the promise was used to influence votes (McCain 2003). e. The magnitude of the contributions, combined with the reliance on a few very large donors, exacerbates the danger of corruption. Many Super PACs are funded primarily by a single donor, who gives very large sums. Newt
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Gingrich was almost totally dependent on Sheldon Adelson and his wife, and Rick Santorum relied almost entirely on Foster Friess. Adelson went on to give $20 million to Romneys Super PAC. f. The danger of corruption is also exacerbated by the fact that many Super PAC donors are functionally anonymous (to voters) because they channel contributions through 501(c)4 organizations. Although a 501(c)4 group that ran independent expenditures in New York state elections would have to disclose its donors at least in part, a (c)4 that gives to a state Super PAC would not. Consider for example the Super PAC Concerned Citizens for Working America which spent $250,000 in a single House race in Kentucky in 2010. Its sole donor was a 501(c)4 committee called New Models, headquartered in Arlington, VA. There is no way to know whether New Models is funded by a single individual, a corporation, or a broad group of citizens. Voters in Kentucky have no way to know if the winning candidate does favors for the donor. 19. Creating an exception to New Yorks aggregate limit on contributions to political committees for contributions to committees that make only independent expenditures would also enhance the appearance of corruption. a. Voters reasonably believe that contributions to a candidates Super PAC are in effect a contribution to the candidate. Nearly all media references to Priorities USA Action referred to it as Obamas Super PAC, and nearly all stories about Restore Our Future described it as Romneys Super PAC. Indeed, after an
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hours searching on Google, I had yet to find a single news article that did not identify either Super PAC as linked to the candidate in the opening paragraph. b. Polls have repeatedly shown that majorities of Americans believe that large contributions to independent expenditure efforts are as likely to lead to corruption as direct contributions to candidates. A survey conducted for the Justice Department by Democratic pollster Mark Mellman and Republican pollster Richard Wirthlin for the McConnell case showed that the public viewed independent spending and direct contributions as equally likely to secure special access. i. The survey asked If an individual, issue group, corporation, or labor union donated 50,000 dollars or more to the political party of a Member of Congress, how likely would a Member of Congress be to give the contributor's opinion special consideration because of the contribution - would they be very likely, somewhat likely, somewhat unlikely, or very unlikely to consider the contributor's opinion, or don't you have a view on this? Fully 81% of respondents indicated that this would be either very or somewhat likely. ii. The survey also asked If an individual, issue group, corporation, or labor union paid for 50,000 dollars or more worth of political ads on the radio or TV that benefitted a member of Congress, how likely would the Member of Congress be to give their opinion special consideration because of the ads - would they be very likely,
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somewhat likely, somewhat unlikely, or very unlikely to give them special consideration because of the ads, or dont you have an opinion on this? To this question, 80% responded that it was either very likely or somewhat likely. In short, the public perceived that paying for advertising to help a candidate win an election has the same effect as giving money directly to the candidates campaign to help the candidate win. c. More recently a survey conducted by the Brennan Center for Justice in New York showed that large majorities of Americans believe that unlimited contributions to Super PACs will lead to corruption. (Results below quoted directly from Brennan Center report, http://www.brennancenter.org/analysis/national-survey-super-pacs-corruptionand-democracy (accessed 12/6/2013)). i. 69% of respondents agreed that new rules that let corporations, unions and people give unlimited money to Super PACs will lead to corruption. Only 15% disagreed. Notably, 74% of Republicans and 73% of Democrats agreed with this statement. ii. 73% of respondents agreed that there would be less corruption if there were limits on how much could be given to Super PACs. Only 14% disagreed. Here, 75% of Republicans and 78% of Democrats agreed.

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including 71 % of

More than two-thirds of all respondents (68%) -

Democrats and Republicans - agreed that a company that spent $100,000 to help elect a member of Congress could successfully pressure him or her to change a vote on proposed legislation. Only one in five respondents disagreed. iv. More than three-quarters of all respondents- 77%- agreed that members of Congress are more likely to act in the interest of a group that spent millions to elect them than to act in the public interest. Similar numbers of Republicans (81%) and Democrats (79%) agreed. Only 10% disagreed. v. Two in three Americans - 65% say that they trust government less

because big donors to Super PACs have more influence than regular voters. Republicans (67%) and Democrats (69%) uniformly agree. vi. One in four Americans - 26% says that he or she is less likely to

vote because big donors to Super PACs have so much more influence over elected officials than average Americans.

I declare under penalty of perjury that the foregoing is true and correct. Dated: Hemdozt:A March , 2014

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