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Karl Rove wearing the big boy pants

By MICHAEL KIRKLAND, UPI Senior Legal Affairs Correspondent   |   Nov. 4, 2012 at 3:30 AM   |   Comments

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WASHINGTON, Nov. 4 (UPI) -- The public and the media are largely ignoring the phenomenon but hundreds of millions of dollars, much of it in secret money, are driving the the final negative days of the U.S. presidential election, and in this arena, Karl Rove is wearing the big boy pants.

The fountain from which all these corporate waters flow is the 2010 U.S. Supreme Court decision in Citizens United vs. FEC, which lifted the restrictions on such "independent" expenditures.

The Center for Public Integrity, a non-profit investigative journalism organization headquartered in Washington, and the Center for Responsive Politics, a non-profit research group also based in Washington, report in the Kansas City (Mo.) Star super PACs and secretive non-profits have allocated more than $820 million in independent expenditures thus far in the 2012 elections, "with the overwhelming majority of it favoring Republicans, particularly presidential nominee Mitt Romney."

The imbalance more than makes up for President Obama's sizable advantage from direct contributions to his campaign -- $632 million to Romney's $389 million. While the independent expenditures are unrestricted, direct contributions are limited to $5,000 per person per year.

And the pace is picking up. The OpenSecrets blog of the Center for Responsive Politics reports on its website spending by outside groups has risen from $19 million a week in early September to $33 million in October. For the week beginning Oct. 21, outside spending ballooned to $70 million.

The presidential election is consuming $2.6 billion of the record $6 billion being spent on all races in 2012. OpenSecrets says that $2.6 billion is actually a decrease from the 2008 presidential race figure of $2.8 billion.

"In the new campaign finance landscape post-Citizens United, we're seeing historic spending levels spurred by outside groups dominated by a small number of individuals and organizations making exceptional contributions," Sheila Krumholz, executive director of the Center for Responsive Politics, said in a statement posted to the website.

The U.S. public may never know how much money is being spent in the 2012 presidential and congressional elections. Unlike super PACs, regular political action committees and direct contributions to candidates and party committees, 501(c)(4) groups do not have to report donations or donors.

Large corporations reportedly are holding off from rehiring employees until after the November elections, keeping U.S. unemployment high. They show no such reticence in doling out political money from corporate treasuries.

Some of the recipients of big corporate and personal money are organized under Section 501(c)(4) of the tax code. These 501(c)(4) groups are supposed to be "civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare," tax code regulations say, "or local associations of employees, the membership of which is limited to the employees of a designated person or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational or recreational purposes."

The New York Times said the secrecy allows corporations to donate money to 501(c)(4) groups while "shielding corporate contributors from shareholders or others unhappy with their political positions."

A major chunk of unregulated corporate money has poured into two conservative groups associated with Rove.

Rove and fellow former Bush adviser Ed Gillespie founded two groups in 2010 after the Citizens United ruling: American Crossroads, a super PAC which has to report the sources of funds to the Federal Election Commission, and Crossroads Grassroots Policy Strategies, a non-profit organized under section 501(c) of the U.S. Tax Code, which doesn't have to say where its money originates.

The Center for Responsive Politics reported the two groups raised $123 million from 2010 through the end of 2011, but the lion's share, $76.8 million, went to the non-profit.

Crossroads GPS has fewer than 100 donors, all of them secret.

The center reported on its website American Crossroads raised about $80 million and spent about $75 million in 2012.

Rove's secretive Crossroads GPS, his 501(c)(4) organization, has spent more than $67 million so far in 2012. Donors and further cash on hand are unknown.

"It may take years to determine how much [the secret non-profits] spent," Krumholz said on the OpenSecrets blog. "Furthermore, it likely will never be known who provided the vast majority of this money, which includes at least $203 million in the last two months."

Behind the Rove behemoths, Restore Our Future, the super PAC supporting Mitt Romney has spent nearly $125 million on independent expenditures. By contrast, Priorities USA Action, the super PAC supporting Obama, has spent a paltry $64.5 million.

The U.S. Chamber of Commerce is also a big player. The conservative chamber has reported spending $35 million on electoral activity, OpenSecrets reported, but "routinely spends tens of millions more on unreported 'issue advocacy' that targets federal candidates."

Coming in close behind the chamber is Americans for Prosperity, another 501(c)4 "social welfare" organization, which has spent nearly $34 million attacking Democrats and supporting Republicans.

The Supreme Court's 5-4 decision in Citizens United has been harshly condemned ever since it was handed down in January 2010.

"Last week, the Supreme Court reversed a century of law to open the floodgates for special interests -- including foreign companies -- to spend without limit in our elections," Obama said in his State of the Union address a few days later, while members of the high court squirmed in seats just below his podium. "Well, I don't think American elections should be bankrolled by America's most powerful interests, and worse, by foreign entities. They should be decided by the American people, and that's why I'm urging Democrats and Republicans to pass a bill that helps to right this wrong."

There doesn't seem to be much chance of that happening. In July, a bill seeking to undo some of the ruling's effects failed in the U.S. Senate. On a strict party line vote of 51-44, Democrats were unable to muster the 60 votes needed to overcome a Republican filibuster.

Despite that vote, not all Republicans are enthralled with the Supreme Court ruling.

U.S. Sen. John McCain of Arizona, the 2008 GOP presidential nominee told a crowd in Bowling Green, Ohio, last week, "I think it [the Citizens United ruling] has been a disaster," the Toledo Blade reported. "There is money coming in from places we never knew where it came from. And I guarantee you there will be scandals ... and corruption, and then there will be reform."

McCain was one of the sponsors of the Bipartisan Campaign Reform Act of 2002, better known as McCain-Feingold. The law prohibited corporations and unions from using their general treasury funds to make "independent expenditures for speech that is an 'electioneering communication' or for speech that expressly advocates the election or defeat of a candidate."

The Supreme Court shredded the law and its restrictions, ruling that corporations and unions enjoyed free speech.

Writing for the narrow majority, Justice Anthony Kennedy said: "Speech is an essential mechanism of democracy, for it is the means to hold officials accountable to the people. ... The right of citizens to inquire, to hear, to speak, and to use information to reach consensus is a precondition to enlightened self-government and a necessary means to protect it. ... Political speech must prevail against laws that would suppress it, whether by design or inadvertence."

He added: "We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers" such as corporations and unions. "Both history and logic lead us to this conclusion."

Justice John Roberts, joined by Justice Samuel Alito, wrote separately to agree with the judgment. "The government urges us in this case to uphold a direct prohibition on political speech. It asks us to embrace a theory of the First Amendment that would allow censorship not only of television and radio broadcasts, but of pamphlets, posters, the Internet, and virtually any other medium that corporations and unions might find useful in expressing their views on matters of public concern," Roberts said. "Its theory, if accepted, would empower the government to prohibit newspapers from running editorials or opinion pieces supporting or opposing candidates for office, so long as the newspapers were owned by corporations -- as the major ones are. First Amendment rights could be confined to individuals, subverting the vibrant public discourse that is at the foundation of our democracy."

Justice Antonin Scalia wrote separately to attack the 4-member liberal dissent.

"Despite the corporation-hating quotations the dissent has dredged up," he zinged, "it is far from clear that by the end of the 18th century corporations were despised. If so, how came there to be so many of them?"

Justice John Paul Stevens dissented, joined by the three other liberals.

"The basic premise underlying the [majority's] ruling is its iteration, and constant reiteration, of the proposition that the First Amendment bars regulatory distinctions based on a speaker's identity, including its 'identity' as a corporation," Stevens wrote. "While that glittering generality has rhetorical appeal, it is not a correct statement of the law. Nor does it tell us when a corporation may engage in electioneering that some of its shareholders oppose. ... The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the court's disposition of this case.

"In the context of election to public office, the distinction between corporate and human speakers is significant," he added. "Although they make enormous contributions to our society, corporations are not actually members of it. They cannot vote or run for office. Because they may be managed and controlled by non-residents, their interests may conflict in fundamental respects with the interests of eligible voters. The financial resources, legal structure, and instrumental orientation of corporations raise legitimate concerns about their role in the electoral process. Our lawmakers have a compelling constitutional basis, if not also a democratic duty, to take measures designed to guard against the potentially deleterious effects of corporate spending in local and national races."

The ruling is unlikely to be reversed in the foreseeable future. Last June, the same 5-4 high court majority slapped down Montana's restrictions on independent political expenditures from corporations, citing Citizens United. The majority gave its judgment in an unsigned, or "per curiam," opinion.

In dissent, Justice Stephen Breyer conceded the fight was over for now.

"Were the matter up to me, I would vote to grant the petition for [review] in order to reconsider Citizens United or, at least, its application in this case," he said. "But given the court's per curiam disposition [in the Montana case], I do not see a significant possibility of reconsideration."

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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