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Election-cash spigots running at full blast

Fundraising tally nears $1.2 billion

- Associated Press - Tuesday, September 7, 2010

Turns out politics, for all its focus on the gloomy economy, is a recession-proof industry.

This year's volatile election is bursting with money, setting fundraising and spending records in a high-stakes struggle for control of Congress amid looser but still fuzzy campaign-finance rules.

Based on the latest financial reports, House and Senate candidates in this election cycle raised nearly $1.2 billion, well ahead of the pace for contests in 2008, 2006 and 2004.

Races for governor in 37 states - more than half of those for open seats - are also setting fundraising records. Billionaire Republican Meg Whitman leads the way, pumping $104 million of her own money into her campaign for California governor.

"We may be on track for the most expensive cycle ever, even more than '08, which is really hard to believe," said Michael Toner, a campaign-finance lawyer at Bryan Cave LLP and a former Federal Election Commission chairman.

Bitter intraparty fights, up to 100 competitive House races, a large number of open seats and early partisan attacks have created a growing demand for cash. The national parties are competing for dollars with outside groups and their often-anonymous contributors. And while Democrats have an advantage at the national party level, Republican-leaning groups seem to have more than filled the void.

The money has been flowing into political battlegrounds since early this year, from a special Senate election in Massachusetts to a Democratic primary fight for a Senate seat in Arkansas, from the race for Florida governor to the gubernatorial and Senate contests in California. The spending will now shift to the general election.

Millions of dollars are pouring into campaigns that have been dominated by discussions about the government's fiscal prudence. There's no such thing as restraint when it comes to getting elected.

The Supreme Court earlier this year freed corporations and unions to spend their money on ads targeting candidates for president and Congress. A subsequent lower court ruling said individuals are also free to spend unlimited amounts on independent election ads.

So far, however, corporations have generally avoided overt politicking.

"The whole notion of 'Vote against Snodgrass by Gillette shaving cream' - it's just not going to happen," said Kenneth Goldstein, a University of Wisconsin at Madison political scientist who specializes in political media.

Instead, corporations are funneling their money to trade associations such as the U.S. Chamber of Commerce or other groups that can air election ads, often without having to disclose their donors.

The desire for anonymity may have gotten an extra push when Target Corp. faced a backlash from liberals for its $150,000 donation to a Minnesota political group that was running ads in support of conservative Republican gubernatorial candidate Tom Emmer.

"What we will see is corporations not wanting to anger their shareholders, not wanting to anger their retail customer by getting involved in partisan elections," said Paul Ryan, a senior lawyer at the Campaign Legal Center. "Instead, they will employ strategies to obscure the fact, or hide completely the fact that they are dumping money into politics by routing their money through groups like the Chamber of Commerce."

The Chamber plans to spend $70 million in elections this year. It has already devoted more than $5 million to advertising campaigns helping Republicans in Senate races in Massachusetts, Colorado, Pennsylvania, Illinois, Ohio and New Hampshire, and for Democratic Sen. Blanche Lincoln in Arkansas.

Last week, an anti-abortion group aired among the first ads to specifically call for the defeat of candidates. The radio ads were broadcast in Ohio, Indiana and Pennsylvania and targeted three Democratic House incumbents.

The Federal Election Commission has yet to write rules on how to apply the Supreme Court's ruling. Democrats in Congress have tried to pass legislation that would require groups that run ads to reveal their donors. The legislation has stalled in the Senate, but strategists in both parties and campaign-finance lawyers say the effort may have given some potential corporate donors second thoughts.

Still, Larry Noble, former general counsel at the FEC and a lawyer at Skadden Arps, said more corporations are seeking advice on how and when to donate.

"My guess is, we're going to see more corporate money spent on elections," he said. "If it's successful, and you don't see a lot of real pushback, then in 2012, you'll see even more of it. So this is a test election."

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