POLITICS
11/04/2014 12:33 pm ET Updated Nov 04, 2014

Here Is Your First $100 Million Senate Race

WASHINGTON -- Former Secretary of State Hillary Clinton joined Sen. Kay Hagan (D-N.C.) on the election trail Oct. 25 to rally Democrats ahead of Tuesday's crucial midterm elections. The two Democrats had more in common than just a stage: Hagan's re-election race, like Clinton's 2000 bid, was in the process of becoming one of the most expensive Senate races in modern U.S. history.

In 2000, while her husband, former President Bill Clinton, still occupied the White House, Hillary Clinton squared off against then-Rep. Rick Lazio (R-N.Y.). The two candidates spent a combined $70.4 million on their campaigns. Adjusted for inflation, that would be $94.2 million in 2013 dollars. (Clinton was also boosted by at least $6 million in soft money from Democratic Party committees, but at the time it was not necessary to report this spending publicly.)

In the neck-and-neck campaign between Hagan and Republican state House Speaker Thom Tillis, a combined $111 million has been spent thus far, crushing Clinton and Lazio's inflation-adjusted total -- with even more to be reported in final campaign finance filings after the election. It is the first general election Senate race to pass the $100 million mark.

However, in terms of how money has been raised and spent, the 2000 New York and 2014 North Carolina races couldn't be more different. Where Clinton and Lazio spent a combined $70.5 million raised in strictly limited amounts from their own campaign coffers, the Hagan and Tillis campaigns had spent just $30 million through Oct. 15.

The rest of the money spent in North Carolina -- indeed, the vast majority of it -- has come from political party committees ($19 million) and from independent groups like super PACs and nonprofits that can raise unlimited sums from nearly any source ($62 million).

This dynamic is not unique to the North Carolina Senate race. There are 35 other congressional races where the general election candidates had been outspent by independent money through Oct. 15, according to the Center for Responsive Politics. In some of these races the candidates may ultimately surpass the expenditures of outside spenders, but for the most part those actually running for office will likely have to make way for a flood of other interests.

Control of the Senate will be decided in races where outside money surpasses candidate spending. In addition to North Carolina, the Senate races in Alaska, Arkansas, Colorado, Iowa, Kansas and New Hampshire have all seen candidates outspent by independent sources.

The shift from a 2000 race dominated by candidate spending to a 2014 campaign flooded with outside money is indicative of the altered campaign finance landscape fashioned by the Supreme Court in its controversial 2010 Citizens United decision (and by subsequent lower court rulings derived from it). That decision opened the door for corporations, unions and individuals to spend unlimited sums on elections so long as they remain independent from the campaigns run by candidates.

These nominally independent groups, however, are anything but. Take, for example, Senate Majority PAC, a Democratic Party-aligned super PAC that is the top spender among independent groups in the 2014 election. This super PAC is run by former aides to Senate Majority Leader Harry Reid (D-Nev.). Reid has met with big money donors to Senate Majority PAC, while President Barack Obama has attended two fundraising events for the group. Other Democratic lawmakers have given millions to the group through campaign committees, leadership PACs and their own wallets.

Candidates are technically forbidden from communicating strategy in private with independent groups, but they have found numerous ways to maneuver around the rules. One way is simply to communicate publicly over the Internet. Campaigns post raw material like video b-roll, high-resolution photographs and advertising scripts to their websites, all of which can be repurposed for ads by outside groups. Some candidates have even gone so far as to post entire campaign strategy and messaging memos to help their unlimited-money friends.

Family members and friends of candidates have funded groups working to elect them. In a number of cases, the candidates and outside groups share consultants or use the same advertising firms, which have supposedly created firewalls to protect against illegal coordination.

In June, Republicans running for Senate in Arkansas, Iowa and Colorado -- another state where the Senate contest is approaching $100 million -- all appeared at a donor conference organized by the billionaire brothers Charles and David Koch. Attendees included other wealthy donors looking for horses to back in their pursuit of a Republican Senate majority.

In a leaked recording of a panel where all three candidates spoke, Rep. Tom Cotton (R-Ark.) can be heard telling potential donors that they had already "played a critical role in turning our state from a one-party Democratic state." Cotton currently appears poised to defeat Sen. Mark Pryor (D-Ark.) in Tuesday's election.

Rep. Cory Gardner (R-Colo.), currently leading Sen. Mark Udall (D-Colo.) in polls, made his pitch to these potential donors by stating that "third-party" groups would decide whether he would win or lose his election. There were other panels taking place at the June conference where donors could learn which of these third-party groups they could give money to.

Meanwhile, Iowa state Sen. Joni Ernst (R) directly credited her rise to this wealthy audience, telling those present that "the exposure to this group and to this network and the opportunity to meet so many of you, that really started my trajectory." Ernst is currently leading Rep. Bruce Braley (D-Iowa) in the open-seat race to replace the retiring Sen. Tom Harkin (D).

Since the June conference, Koch-linked groups have contributed millions in support of these candidates' campaigns.

All of this amounts to a situation where lawmakers and political parties are decidedly connected to both the fundraising and the strategy of outside groups. This contradicts the central premise of the Citizens United decision -- the idea that outside spending, due to its supposed independence from political candidates, cannot cause corruption.

In essence, what has happened is a return to the era of soft money, when political parties and lawmakers raised unlimited sums for electoral activities outside of the contribution limits imposed by campaign finance laws. In its 2003 decision to uphold the McCain-Feingold campaign finance law banning soft-money fundraising, the Supreme Court found sufficient reason to believe that the raising and spending of unlimited soft money was indeed a corrupting force in governance.

Unlike in 2000, much of the cash now flowing through the soft-money system of independent groups remains undisclosed. Spending by dark money nonprofits has surged past $200 million in the 2014 election, when one considers undisclosed issue advertising together with electoral spending reported to the Federal Election Commission.

Only one of the Koch-linked groups backing Cotton, Ernst, Gardner and numerous other Republican office-seekers has disclosed its donors.

Another difference between 2000 and 2014 is the landscape for potential reform.

Sen. John McCain (R-Ariz.), who spearheaded campaign finance reform in the 1990s and early 2000s, has called Citizens United the "worst decision ever" and stated unequivocally that it will result in "huge scandals," since so much money will be flowing to campaigns from unknown sources and "there is too much corruption associated with that kind of money." Nevertheless, McCain has voted against every single proposal to fix disclosure rules, as well as efforts to reverse the court's ruling.

Where there were once numerous Republicans open to reform, now only one Republican in all of Congress -- Rep. Walter Jones (R-N.C.), known for breaking with party orthodoxy -- has signed on to any legislation to address the rising tide of independent soft money in elections.

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