The July 31 deadline for filing Federal Election Commission reports brought media stories that compared the fundraising totals of Democratic and Republican super PACs, much like the stories that compare the candidates’ financial situation at the end of each fundraising quarter. But while significant to some degree, these stories are incomplete, in much the same way that the candidate head-to-head comparisons are. They overlook who else might spend in the upcoming election.
In particular, many of the news reports overlooked a key difference between super PACs and other types of nonprofits. While both types of groups can make independent expenditures, only super PACs disclose all of their receipts and disbursements to the FEC. Other nonprofits provide much less disclosure.
The statement of reasons released by the Republican FEC Commissioners last week in the case of the American Issues Project shows just how significant the issue of spending by unregistered, non-super PAC nonprofits might be in 2014. A key legal question for such groups is whether their major purpose is to influence federal elections. If it is, then they must register and report with the FEC—just as the super PACs do. If it isn’t, then their disclosures are far more limited and opaque. The Republican Commissioners proposed to tilt the scale toward the cause of unregistered nonprofits. By arguing that an organization’s major purpose should be evaluated over an extended period of time, they effectively contended that it is easier, not harder, for such organizations to avoid the major purpose of influencing elections, and thereby avoid FEC registration and reporting.
The recent controversy over the Internal Revenue Service is relevant as well. There is a good case to be made that the widely publicized charges of agency misconduct and their immediate aftermath will embolden nonprofit political activity—at least in the short term. The letters sent this week by the Republican chairs of the House Administration Committee and House Ways and Means Committee to the IRS and FEC show the scrutiny both agencies are under. If it becomes easier for nonprofits to spend politically without interference from the IRS and without registering with the FEC, then the relative fundraising of those groups that do register with the FEC, including super PACs, will not matter as much. Whether that was part of the intent behind the committees’ letters, it is a foreseeable effect.
Finally, it is often overlooked that the asymmetrical fundraising rules created by McCain-Feingold, when coupled with the expanded opportunities for independent spending created by Citizens United v. FEC and related cases, have changed the framework for election-related spending. Campaigns in targeted House or Senate races used to be waged on a Cold War model, with the candidates and their respective national parties standing in for the U.S. and Soviet Union. One could clearly see the correlation of forces and evaluate their probabilities of success, to the extent that spending levels are predictive of success. But now the battlefield is more like 1990s Somalia, in which rival gangs of warlords vie to advance their respective causes on several different battlefields. It is becoming harder than ever to tell who will play where, with what resources, and with what skill and sophistication.
So the campaign manager on a targeted House or Senate race may find the FEC fundraising totals interesting. She may be encouraged or discouraged, depending on her party. But the smart campaign manager will realize that the reports say little about who will spend in her particular race, and whether that spending will be to her candidate’s advantage.