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Unlimited campaign cash fuels "Super PACs"

Super PACs blur the lines of campaign finance
The Super PAC is redefining the way money is raised and spent this campaign season. They can raise unlimited funds, but are not allowed to funnel money directly to a candidate or coordinate their activities with a campaign.

NEW YORK (CBS) - Even before it had filed its paperwork with the Federal Election Commission, a "Super PAC," or political action committee, supporting Texas Governor Rick Perry for president was filming his announcement speech in Charleston, South Carolina.

As Perry tossed his cowboy hat into the presidential ring, the group Make Us Great Again (MUGA) was documenting those early images of Perry, a formidable fundraiser and the nation's longest-serving governor, shaking up the Republican presidential field.

While the Perry campaign raised $17 million between his August 13 announcement and the end of September, it is unknown how much cash MUGA has raised since registering with the FEC on September 29. What is publicly known, due to mandatory expenditure disclosures with the FEC, is that MUGA has spent $1.5 million producing and buying air time for television ads, including "Conservative," a warm and fuzzy 30 second spot.

"Everything in 'Conservative' was filmed by our Super PAC either at the campaign kickoff in South Carolina or at campaign events that were open to the public in Iowa," said Jason Miller, a spokesman for MUGA. "We haven't given the campaign any footage of ours."

To do so would be a violation of FEC rules forbidding coordination of campaign activity between presidential campaigns and the Super PACs supporting them. So, when Rick Perry For President 2012 later posted a video on the Internet, "Securing The Dream (Marcus' Story)," featuring military veteran Marcus Lutrell speaking admiringly of Perry, it was a red flag for campaign watchdogs. In three places the campaign video repeats footage of Perry -- speaking in front of an American flag, shaking hands with supporters, hugging an elderly woman - that is identical to footage in the Super PAC ad.

"There was no coordination between the campaign and the Super PAC," says Catherine Frazier, deputy press secretary for the Perry campaign. Frazier said campaign ad makers obtained the matching shots from a YouTube posting of the Super PAC ad, which, she said, made the footage "public domain."

Video: Super PACs blur the lines of campaign financing

The case of the parallel Perry ads fuels the doubts of those who don't believe Super PACs and the campaigns they support can be truly independent.

"I don't think they're independent. I don't think they sprang up in the desert on their own," said Fred Wertheimer, a long-time campaign finance reform advocate who now runs the non-profit Democracy 21. "These are vehicles for the candidate to get the benefit of unlimited money."

In the 2012 election cycle, Super PACs could help drive campaign spending by independent groups up to $1 billion dollars, in addition to an estimated $4 billion that presidential candidates, congressional

candidates, and political parties may spend.

A donor is limited to giving $2,500 to a presidential candidate's campaign, $10,000 to a state political party committee, and $30,000 to a national political party committee, whereas Super PAC donations have no limit.

"They exist for one purpose -- to allow the candidate and big donors to completely circumvent the contribution limits, and when you do that, and you allow unlimited money to flow to the benefit of a candidate, you're back in a system that is inherently corrupt," Wertheimer said.

The Super PACs earned their moniker because they turn decades-old limits on campaign contributions to candidates, parties, and independent groups on their head following two court decisions in 2010. The Supreme Court ruled in the Citizens United case that corporations and unions had a First Amendment right to engage in unlimited spending on political advocacy. Then a U.S. Court of Appeals for the District of Columbia Circuit decision in the Speech Now case gave the green light for unlimited contributions.

The Federal Election Commission issued a pair of "advisory opinions" last July which laid out the rules for Super PACs.

According to the FEC, a Super PAC can raise unlimited sums of money from corporations, unions, and wealthy individuals, and then spend unlimited sums of money in advertising for or against candidates.

American Crossroads, co-founded in 2010 by former Bush White House aide Karl Rove an former Republican Party chairman Ed Gillespie quickly following the court decisions, capitalized on the opportunity to influence the mid-term Congressional elections, spending $70 million primarily on TV ads targeting vulnerable House Democrats, many of whom lost.

"One thing we want to do is make sure that average Americans know where their elected leaders in Washington are taking them with their votes and their activities," said American Crossroads president Steven Law. "Our basic mission is to support in general the kinds of policies and positions that the Republican Party mostly feels comfortable with."

American Crossroads intends to raise and spend $240 million by next November, and sees a chance to raise as much as $300 million. Its ads attacking select Democratic incumbents and President Obama have run for months.

"We will once again be holding the feet to the fire of the President and Members of Congress on those issues and what results they are delivering for the American people," Law said. "We're fighting for lower taxes, less government waste, less spending, and less government involved in our lives."

Law, who said Rove and Gillespie now have little daily involvement in American Crossroads, believes his group is balancing the money that labor unions, such as the AFL-CIO, AFSCME SEIU, give Democrats.

"Republicans have finally figured out ways to counter the massive counterweight that organized labor is on the other side."

In the first half of 2011, liberal Super PACs raised $7.6 million from just a few dozen donors, while conservative Super PACs raised $17.6 million, with 80 percent of that money coming from 35 donors, according to the Center for Responsive Politics.

There are now 232 active Super PACs including those formed to back presidential candidates. There is at least one backing every major Republican candidate, except former Pennsylvania Senator Rick Santorum.

Super PACs are prohibited from funneling money directly to a candidate, but donors who give to both organizations are common. For example, 55 of the first 75 disclosed donors to the Super Mitt Romney-supporting Super PAC Restore Our Future previously gave the maximum $2,500 for the primary season to former Massachusetts governor, according to FEC reports.

That list included hedge fund manager John Paulson, one of four donors who gave Restore Our Future $1 million. Ed Conard, a retired executive at Bain Capital, the consulting firm Romney once ran, initially disguised his $1 million donation in April as coming from a dummy corporation with the same address as Bain's Manhattan headquarters. Conard later came clean and amended his donor information with the FEC.

Hollywood movie mogul Jeffrey Katzenberg gave $2 million to the Super PAC allied with the President, "Priorities USA." Billionaire investor George Soros donated $75,000 to a Super PAC devoted to helping Democrats regain control of the House of Representatives, House Majority PAC.

"A million dollar contribution to that Super PAC has just as much impact, just as much potential for corruption as writing a check to the candidate himself or herself," said Paul Ryan, an attorney with the

Campaign Legal Center, in Washington. "The reality is we see very close relationships between every major presidential candidate and a Super PAC."

For instance, the pro-Romney Super PAC Restore Our Future is run by Carl Forti, Romney's political director in 2008. Its treasurer, Charles Spies, was Romney's general. The top fundraiser, Steve Roche, recently left the same job for the Romney campaign.

"We're professionals," Forti said. "We're being more cautious than we need to be."

He added, "My wife has no interest in seeing me in an orange jumpsuit."

The pro-Perry Super PAC Make Us Great Again was founded by Texas lobbyist Mike Toomey, the governor's former chief of staff.

"It's only natural that people who have been supporting Governor Perry for a long time would be supporting this effort as well," said MUGA spokesman Miller. "Everyone involved," he continued, "whether consultants helping out with fundraising, fully understand and fully abide by the fact that there cannot be any coordination between the campaign and the Super PAC."

Priorities USA, the Super PAC aiming to boost President Obama's re-election chances, was created by two former West Wing insiders, spokesman Bill Burton and adviser Sean Sweeney.

"As much as I love my friends in the White House and President Obama, me and the people who I work with are taking a break from seeing those people and talking to those folks. There is no coordination," Burton said. "I don't think groups like this are the best way to run a democracy, but our view was that we weren't going to let Karl Rove and Texas oil tycoons control the political process this time around."

Video: Super PACs aims to sway 2012 election

Another concern for campaign watchdogs is an apparent FEC loophole in the rules that allows candidates to attend Super PAC fundraisers, as long as they don't ask for the big money. For example, as The Center For Public Integrity first reported, in July, Mitt Romney went to a private fundraiser for the Restore Our Future SuperPAC on Manhattan's Upper West Side.

"A candidate is fully permitted to show up at a Super PAC fundraising event and to attend, speak, and be a featured guest without that being considered 'coordination'," said Paul Ryan, of the Campaign Legal

Center. "That's disturbing to me."

Super PACs also present the possibility of bailing out failing campaigns. The campaign of Jon Huntsman, the former Utah governor and ambassador to China, has reported little cash on hand and not broadcast a single campaign TV ad. But the Our Destiny Super PAC has come to the rescue by spending $1.3 million on an ad running in New Hampshire, the primary state where Huntsman is all in. His father, a billionaire industrialist, is believed to be a big backer of the Super PAC.

"He is not out only donor," said Ronald Jacobs, counsel for Our Destiny, who declined to say what amount the candidate's father gave. "He is one of many donors."

Super PACs supporting Republican presidential candidates Newt Gingrich, the former House Speaker from Georgia, and Ron Paul, the congressman from Texas, are just getting off the ground.

"We have had some significant donations from some very wealthy people," said Gary Franchi, who runs the pro-Paul Revolution PAC. Franchi said it launched a direct mail campaign to 120,000 registered Republicans and independents in Iowa.

Denver lawyer Charlie Smith, a recent national chairman of College Republicans is hoping to raise "in excess of $10 million" for Solutions 2012, a Super PAC backing former House Speaker Newt Gingrich that he founded only a month ago.

"I didn't see any signs one was being formed, so I decided to get the ball rolling." Smith said. "I am long-time admirer of Newt. The electorate was finally latching on to someone who is a true conservative and someone who can find real solutions to the problems we face."

The Super PAC picture - who is giving and how much - will become much clearer next month, when the groups file their required end of year reports.

With the flurry of activity underway Ryan says, "I predict in 2012 we will see far more special interest money in U.S. elections than we have ever seen before."

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