malbin pacs in an age of super pacs -...
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PACs in an Age of Super PACs
Michael J. MalbinExecutive Director
Campaign Finance Institute
Washington DC
Talk Presented to the
National PAC Conference
Miami Beach, Florida
March 6, 2013
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PACs – What Future Role?
PACs’ Concern: Are they still relevant?
My thesis:
Concern has real basis but overwrought
Outline:
1. Review of #s for PACs v IEs
2. IEs in the states post-CU show:
3. Different organizations, different goals
4. Issues for the future
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Next slides:
• PAC contributions going up.
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Total PAC ContributionsAll Congressional Candidates
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
2000 2002 2004 2006 2008 2010 2012
+73%
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Contributions by Type of PAC
$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
$180,000,000
2000 2002 2004 2006 2008 2010 2012
Corporate
Assoc
Non-Conn
Labor
Assoc
Non-conn
Labor +6%
Corp
+99%
+72%
+114%
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2000-2012:
All PAC $ up 73%.
Corp PAC $ up 99%
CPI up 33%.
HR winner $: up 89%
PAC $ on same pace as all HR $
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But this does not speak to the
concern:
Cannot look at PAC $ alone.
Next chart :
Red = PAC contributions.
Green = Independent spending.
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PACs v. All Federal Non-Party IE2004, 2008, 2012
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
2004 2008 2012
PAC Contributions
Non-Party Indep. Spending
$439m
+ 3%
$1.1b
+285%
$425m
+33%
$320m
$191m
$286m
+50%
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PACs v. Non-Party IE (Congress)2008, 2010, 2012
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
2008 2010 2012
PAC Contributions
Non-Party Indep. Spending
$386m
$407m
+ 5%
$195m
+343%
437m
+ 7%
$491m
+152%
$44m
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PACs v. IE as % of Candidates’ Receipts (Congress: 2008, 2010, 2012)
0%
5%
10%
15%
20%
25%
30%
35%
2008 2010 2012
PAC as % of All Cand. Receipts
Non-Pty IE as % of Cand. Rcpts
24%
27%26%
13%
4%
31%
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• So far:
Why PAC Managers express concern.
• Next:
Need to differentiate organizations
based on their goals
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Political scientist Frank Sorauf wrote in 1980s:
Most PAC managers choose among
a few types of strategies.
Basically still valid. Slightly modified, these are:
1. Pragmatic / Legislative
2. Ideological / Issue / Electoral - Partisan
3. Organizational maintenance + Local
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From the goals ���� contributions
Pragmatic strategy ����– Give to incumbents
– Sometimes open seat; rarely challenger
– At least somewhat bipartisan
– Focus on committees
Ideological / Issue strategy ����– Reward friends, but
– Focus $ on close elections
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% to Incumbents – by PAC Type
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2002 2004 2006 2008 2010 2012
Corporate
Assoc
Non-Conn
Labor
Corp
Assoc Labor
Non-conn
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Independent Expenditure committees
are like non-connected PACs without
distractions.
Nearly exclusive focus on the most
competitive races
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All HR: Competitive v. Not(2012 – All HR Major Party General Election Candidates – Average per candidate)
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
Winner had 55% or less (n=128) Winner had more than 55% (n=656)
Candidate Receipts
NonParty Spending
Party Spending
$2.4m
$1.1m
$857K
$1.0m
$60K$18K
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Interesting puzzle:
• Citizens United ���� prediction of increased
independent spending by corporations.
• But the PACs of for-profit corporations give
money to incumbents who are mostly safe.
• IEs go to competitive races.
• So who is doing what and why?
Recent CFI paper looking at first election post-
CU in the states.
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Where/Why IE Growth?
• Compared the States – 2006/2010• Only 16 had comparable, good data both years
• Compared States that Regulated Corporate
Spending before CU with those that did not
What we found:
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143.9
205.8
-
50
100
150
200
250
Total
Mil
lio
ns
Independent Spending in States, 2006 and 201016 States with Comparable Data for Both Years, millions of dollars
2006
2010
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• IEs up? Obviously.
• Is it because of removal of corporate
spending prohibition (CU)?
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37
61
107
145
-
20
40
60
80
100
120
140
160
Corp. Prohibited Corp. Prohibited Corp. Not
Prohibited
Corp. Not
Prohibited
2006 2010 2006 2010
Mil
lio
ns
Total Independent Spending 2006 v. 2010 in
States with/without Corporate Prohibitions
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-
10
20
30
40
50
60
Corp. Allowed Corp. Prohibited Labor Allowed Labor Prohibited
Business Business Labor Labor
Mil
lio
ns
Independent Spending, 2006 & 2010
Business and Labor Sectors
2006 2010
n=9 n=7n=6 n=10
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So: up roughly same amount in state that did or
did not prohibit corp spending before CU
Have to look elsewhere for explanation.
Next graph will show the key sectors for
growth.
Before the graph: some orientation
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POLITICAL PARTY NETWORKS
Next graph reflects a basic change in US politics
40 years ago: federal parties unimportant
Today: parties are central actors
Political scientists study parties today
not as formal organizations, but as
diffuse, interwoven networks.
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-
10
20
30
40
50
60
Mil
lio
ns
Independent Spending Across Sectors, 2006 & 2010
2006 2010
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• Of course, the party network organizations
like the RGA and DGA are not simply divorced
from corporate funding.
• But the businesses that give to Super PACs
are not the typical, large, publicly traded
corporation with a connected PAC.
• The goals and interests of party-network orgs
and business PACs are simply not the same
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Goals of most business PACs:– Incremental policy change or policy protection
– Maintain the personal relationships to talk to those in power
– No permanent enemies
Goals of most Super PACs:– Win the close races
– Win control of the majority
– Help set basic frame for the public agenda
– Rarely any concern for maintaining a relationship with the other side.
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Parallel universes
• Activities of Super PACs mostly irrelevant to
the goals of most connected PACs.
• Trying to accomplish both goals at once could
be harmful to each.
• Some business PACs do IEs successfully, but it’s
rare and not easy.
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• Q: Is it in the interest of a corporation w a
traditional PAC form a Super PAC?
– A: Is it in the same corp’s interest to do IEs?
[Generally no].
• Q: Is it in their interest to give undisclosed $
to a trade association that makes IEs?
– A: Assuming finite gov’t affairs budget, have to
conclude > in your interest than anything else it
would displace. [Again, generally no.]
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Two emerging issues of relevance for PACs:
– Fundraising by MCs for own Super PACs?
– Remove contribution cap for parties?
• Either will --> pressures to give unlimited $.
• Most orgs like having cap so it’s easier to say no.
• Traditional PACs can buy self-protection from the unlimited ask through:
– Corporate self-governance procedures.
» I will not discuss at length – not my expertise
» Want to emphasize: 2-sided. Self-protection not just from shareholders but office-holders.
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Another major issue on agenda in several
states/localities: small donor matching funds.
Matching =#= full public funding model, which:
• Ban private money to participating candidates.
• Including traditional PAC contributions.
• Favor or stimulate IEs
Matching funds
• Allow private contributions, up to a contribution limit
• Multiply the value of small contributions.
• Typically would not match PAC contributions but not ban
them. Would let PACs function as currently do.
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Bottom line of my talk has two parts:
Part 1 – For all citizens:
• Super PAC phenomenon is very important to
American politics.
• Growing role and polarization of political parties,
party networks, and their IE Super PAC allies, also is
incredibly important.
• Sep. issue: My view -- we as a country should also
be working to increase participation by small
donors and volunteers.
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Part 2 – For a PAC Manager:
My view: the importance of Super PACs in the
system does NOT mean US corporations and
associations should rush to embrace them.
• Traditional PACs serve their own purposes.
• Super PACs cannot serve the same ends.
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Final point:
It’s often said that money talks.
Super PACs talk like sledge hammers.
A sledge hammer is no substitute for
a good conversation when you need one.