malbin pacs in an age of super pacs -...

www.CampaignFinanceInstitute.org

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


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


Next slides:

• PAC contributions going up.


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%


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%


2000-2012:

All PAC $ up 73%.

Corp PAC $ up 99%

CPI up 33%.

HR winner $: up 89%

PAC $ on same pace as all HR $


But this does not speak to the

concern:

Cannot look at PAC $ alone.

Next chart :

Red = PAC contributions.

Green = Independent spending.


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%


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


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%


• So far:

Why PAC Managers express concern.

• Next:

Need to differentiate organizations

based on their goals


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


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


% 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


Independent Expenditure committees

are like non-connected PACs without

distractions.

Nearly exclusive focus on the most

competitive races


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


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.


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:


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


• IEs up? Obviously.

• Is it because of removal of corporate

spending prohibition (CU)?


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


-

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


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


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.


-

10

20

30

40

50

60

Mil

lio

ns

Independent Spending Across Sectors, 2006 & 2010

2006 2010


• 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


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.


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.


• 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.]


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.


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.


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.


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.


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.

malbin pacs in an age of super pacs -...

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