How 2016 turned into a game for billionaires

The 2016 election cycle is already shaping up to be the most expensive in history, following on a trend of massive campaign expenditures in the last few years. And because of Supreme Court campaign finance rulings, independent political action committees (PACs) are playing a larger role now than ever.

"We actually have now two systems of political finance in our country. We have the regulated system in which candidates and parties can raise limited amounts of money that is disclosed, and then we have this growing universe of vast, unlimited contributions, often secret donations," Washington Post reporter Matea Gold said Sunday on a "Face the Nation" panel about money in politics. "What we're seeing, I think, in this cycle, which is so different than in cycles past, is that this universe of unlimited money is now starting to overtake the universe of regulated money."

campaign finance reform

Supporters of campaign finance reform protest outside the U.S. Capitol building on September 8, 2014, in Washington, D.C.

Win McNamee/Getty Images

One of the changes from past election cycles taking shape is that the Federal Election Commission (FEC), which is supposed to police campaign spending, is "essentially toothless and dysfunctional," CBS News reporter Julianna Goldman said. They also have a growing amount of money to regulate with a different super PAC to support nearly every major candidate running for president, and more "dark money" going to politically-oriented nonprofits that don't have to disclose their donors.

The rise of super PACs in presidential campaigns goes back to the 2012 election, when former House Speaker Newt Gingrich and former Pennsylvania Sen. Rick Santorum both had wealthy donors funding super PACs that allowed them to stay in the race even as they money they raised for their formal campaign operations had dwindled. That led to a bruising primary fight for eventual 2012 GOP nominee Mitt Romney.

"It used to be that when a candidate runs out of money, they have to drop out. Now it's when they run out of their sugar daddy or their sugar mama who's funding their super PAC," Goldman said.

In 2016, the growth in super PACs has been explosive and nearly every presidential candidate has one. Gold said four out of five dollars raised to support Republican candidates has gone to an outside group rather than the candidate him or herself.

"We're looking at the prospects of an incredibly long, drawn out primary fight again, because you never know who's going to be able to get a second wind if the donor decides to write a big check," said Gold.

Legally, a candidate's campaign committee can collect just $2,700 per person per election cycle. So the growth in spending on outside groups has been largely fueled by money from America's wealthiest political donors.

Trevor Potter, a former FEC chairman who now runs the Campaign Legal Center, pointed to the campaign of former Florida Gov. Jeb Bush as an example. Bush's campaign committee raised about $11.4 million in the first 16 days after he formally announced his presidential bid. But in the first six months of the year, his super PAC, Right to Rise, raised $103 million.

"Where I think that leads is that average citizens look at this and say, 'Well, this is a game for billionaires. It's one billionaire talking to another billionaire, where do I fit into this?'" Potter said.

Goldman said that officials with Right to Rise boasted about the fact that 95 percent of their donations were $25,000 or less. As recently as four years ago, a campaign would have boasted about having smaller donations under $250 or $200, she said.

"It's going to be very difficult to know whether certain candidates are taking certain policy positions because that is what is being pushed by a multi-millionaire or billionaire backer writing seven-figure checks," she said.

That's an issue that businessman Donald Trump, one of the GOP candidates, has raised. He said unlike other candidates, special interests wouldn't be able to control his presidency because he can fund his own campaign.

"When Bush gets $100 million plus, and when Hillary [Clinton] gets $50 million plus, every one of those people that put up money will control Bush," Trump said recently.

Steven Law, the president and CEO of conservative political action committee American Crossroads, said there's "irony" in a billionaire like Trump complaining about the amount of money in politics. He said the "vast majority" of donors "are motivated by desire to see the direction of the country change in a broad way."

One example host John Dickerson pointed to was the events for GOP candidates held by Charles and David Koch, the billionaire industrialist brothers and deep-pocketed conservative donors. Their network of conservative groups, Freedom Partners, has said it will spend nearly $1 billion on the 2016 election.

Law said one major source of money that has gone overlooked is organized labor.

"They're unabashed and unashamed about connecting financial political support with your support for their policy agenda. Yet people who don't seem to be terrifically concerned about that. But that is another area where there's a huge amount of money, hundreds of millions of dollars spent to advocate for a very, very particular set of policy agendas," Law said.

Potter agreed that the problem of donors using their money to advocate for specific policy positions is bipartisan, and that Republicans get more attention because there are so many candidates and super PACs to support them. "Both sides have the same issue," he said.

Potter said in 2012, 90 percent of the contributions to super PACs came from a group of just 523 people.

"These candidates become focused on the support of such a tiny group of people, which is so important, because these super PACs are raising far more money than they're going to raise," he said. "The result is that when they get in the government, who are they going to take a call from? Who are they going to listen to?"

But Law said that candidates will run into trouble if they only focus on their wealthy donors.

"Ultimately, the people who cast the votes and determine whether you're the nominee or the candidate, are the voters. The donors, the financing campaigns by whatever means is a means to an end. It's an amplification system," he said. Gold said that part of the way super PACs changed campaigns this cycle is that some candidates held off on formally announcing that they were running for president in order to keep working closely with outside groups and super PACs. Once a candidate declares they are running for president, they can no longer coordinate their campaign strategy with outside groups.

Some watchdog groups filed complaints about this trend in spring, when candidates like Bush, Wisconsin Gov. Scott Walker, a Republican, and former Maryland Gov. Martin O'Malley, a Democrat, were engaging in campaign-like activities but insisted they weren't running for president.

Potter, the former FEC commissioner, said the FEC has become "deadlocked, gridlocked, paralyzed," and unable to deal with any complaints coming in about the way campaigns are spending their money.

"What's happened in the political world is people have said, 'Well, no one's going to go after this anyway. All of this took years, but now it's just not going to happen,'" Potter said.

So will anything change? Gold said one "striking" aspect of the system is that campaign operatives and campaign finance attorneys all agree the system is not working.

"There is a direct conflict between these huge sums of money on one side and these very small, limited contributions on the other. The question is what direction it goes in," she said. "If you talk to advocates for stricter campaign finance rules, such as Mr. Potter, a lot of people are saying, 'Well, this is going to lead to such a big scandal that there will be another sort of reform movement.'"

  • Rebecca Kaplan

    Rebecca Kaplan is a political reporter for CBSNews.com.