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3 - INDEPENDENT EXPENDITURES

"Independent expenditures" are another of the officially sanctioned loopholes contributors use to circumvent the campaign finance law's limits on direct contributions. PACs, ideological organizations, and individuals may spend unlimited amounts of money for independent expenditures supporting or opposing particular candidates, as long as they do not coordinate with the candidates who benefit. In contrast to issue ads, independent expenditures expressly advocate the election or defeat of a candidate. Another feature that distinguishes independent expenditures from issue ads is that organizations making independent expenditures must use hard money to pay for the ads. With only a very limited exception,27 general corporate or union funds cannot be used for independent expenditures. In addition, contributors are limited in the amounts they can give to a PAC making independent expenditures. Individuals and groups that make independent expenditures must itemize the amounts spent and must disclose the names of the candidates who benefit from the expenditures.

When Congress passed the Federal Election Campaign Act (FECA), it limited the amount of money that could be spent on independent expenditures to $1,000. The restriction recognized that, like direct contributions, independent expenditures could have a corrupting influence on candidates. The Supreme Court struck down the limits on independent expenditures, holding that such restrictions were an unconstitutional infringement on free speech.28 In his dissenting opinion, Justice Byron White said that "Limiting independent expenditures is essential to prevent transparent and widespread evasion of the contribution limits."29 Since the Court's decision, independent expenditures have been used widely to influence elections.

Interest groups have long made independent expenditures supporting or opposing candidates, but independent expenditures became more common after contribution limits were put in place. One of the first groups to use independent expenditures to avoid FECA's contribution limits was the National Conservative Political Action Committee (NCPAC). NCPAC first used independent expenditures against Sen. Dick Clark (D-Iowa) in 1978. Clark's defeat, for which NCPAC took credit, encouraged that organization (and, ultimately, others) to air more independent expenditures in 1980. Four of the six Democratic Senators targeted by NCPAC's independent campaigns - John Culver (Iowa), George McGovern (S.D.), Frank Church (Idaho), and Birch Bayh (Ind.) - were defeated in 1980.30

Most of the $1 million NCPAC spent on independent expenditures during the 1980 Senate races financed attack ads against incumbents. A NCPAC target could face as many as 72 negative radio ads a day and 200 television commercials per week, well before the election.31 A sample of NCPAC ads includes one that called then-Senator Bayh's fight against inflation "One very big piece of baloney;" a campaign that said McGovern was "touring Cuba with Fidel Castro while the energy crisis was brewing;" and an ad depicting an empty missile silo, stating that "Senator Church has always opposed a strong national defense."32

Other groups that made independent expenditures in the 1980s included the Auto Dealers and Drivers for Free Trade PAC, which spent nearly $900,000 on independent expenditures in 1986. In one case, it spent at least $400,000 on a television campaign praising Sen. Paula Hawkins (R-Fla.) as someone who "is standing up for Florida."33 The National Association of Realtors PAC spent $1.7 million on independent expenditures in 1986, including $400,000 for a television campaign supporting Rep. James Jones (D-Okla.) and $200,000 for ads supporting Sen. James Broyhill (R-N.C.). A spokesman for the Realtors PAC said that people are "deluding" themselves if they think the $5,000 contribution a PAC can make to a candidate has an impact on the campaign.34

The American Medical Association PAC (AMPAC) was also among the PACs making the biggest independent expenditures in 1986. The $1.5 million AMPAC spent included $100,000 in Colorado in the last 20 days of a race for an open House seat. Democrat David Skaggs - the beneficiary of AMPAC's expenditures - narrowly defeated his opponent, after being down by 20 points earlier in the year. As Skaggs himself noted, "When you win with 51.5 percent of the vote and the AMA spent...$100,000 versus my spending of $500,000, you can draw your own conclusion."35

Independent expenditures increase every four years when, in addition to making expenditures for congressional candidates, PACs and other groups try to influence the presidential races. Independent expenditures in 1980 included those made by NCPAC, which spent nearly $2 million on Ronald Reagan's behalf. Another Republican-leaning group, Fund for a Conservative Majority (FCN), spent just over $2 million on pro-Reagan independent expenditures. Although much of the spending was in the form of direct mail fund-raising solicitations, some independent expenditures came at crucial periods during the campaign. For example, FCN spent $60,000 in New Hampshire and $80,000 in Texas when Reagan was close to reaching his spending limit in both states during his primary campaign.36

Total independent expenditures made on behalf of Ronald Reagan vastly overshadowed amounts spent on Jimmy Carter's behalf, in part because Carter urged that groups not make independent expenditures supporting his candidacy. During the primary, total independent spending in support of Reagan came to $1.6 million, while Carter benefited from less than $20,000 in spending. During the general election, $10.6 million was spent on independent expenditures favoring Reagan, and just under $28,000 went for independent expenditures on Carter's behalf.37

During the 1988 presidential election, another classic example of an independent expenditure hit the airwaves when the National Security Political Action Committee (NSPAC) broadcast its notorious Willie Horton ads. NSPAC spent a record $8.2 million supporting Republican George Bush. According to newspaper reports, the ads ran approximately 600 times during the fall before the election.38 The ads attacked Gov. Michael Dukakis, the Democratic nominee, for supporting a prison furlough system that permitted a convicted murderer to commit violent crimes while he was on a weekend pass. The Bush campaign's effective use of the "tough-on-crime" issue is credited with giving Bush much of his advantage over Dukakis. The NSPAC expenditures supplemented Bush's message by ensuring that the issue would be heard by roughly 80 million people before the election.

Besides the influential impact they may have had on voters, the Willie Horton ads also demonstrate how independent expenditures may give the appearance of illegality. The similarities between the NSPAC ad and Bush's own TV spots, as well as a connection between a NSPAC employee and a Bush communications expert, spawned allegations that there was coordination between the Bush campaign and NSPAC. While the allegations were never proven, the questions that arose tainted the presidential election.

The 1988 and 1992 presidential election cycles saw some new PACs taking the lead in making independent expenditures. The National Rifle Association (NRA), the National Association of Realtors (NAR), the National Right to Life PAC (NRL PAC), and AMPAC were among the top makers of independent expenditures in both years.


TOTAL INDEPENDENT EXPENDITURES BY PACS

Year Presidential RacesHouse/Senate Total
1980 $13,745,262 $2,338,829$16,084,091
1982 $185,492 $7,096,253 $7,281,745
1984 $17,268,342 $5,951,251 $23,219,593
1986 $840,680 $9,344,471 $10,185,131
1988 $14,126,570 $7,214,066 $21,340,636
1990$496,351 $4,656,636 $5,152,987
1992 $4,062,284 $6,578,192 $10,640,476
1994$111,841 $4,970,646 $5,082,487

SOURCE: FEDERAL ELECTION COMMISSION





TOP INDEPENDENT EXPENDITURES BY PACS

1988
PAC Total Independent Expenditures
National Security PAC $8,552,666
National Rifle Association $1,527,832
Auto Dealers & Drivers $1,435,672
National Association of Realtors $1,332,421
National Right to Life PAC $1,315,696
National Committee to Preserve Social Security $1,133,952
American Medical Association PAC $838,202


1990
PAC Total Independent Expenditures
NATIONAL ASSOCIATION OF REALTORS$1,049,585
Auto Dealers &Drivers $653,915
National Right to Life PAC $508,450
National Committee to Preserve Social Security $402,666
Louisiana Coalition $287,135
Council for Nat'l Defense $263,328
American Citizens for Political Action $247,032
National Security PAC $204,495
National Rifle Association $173,248


1992
PAC Total Independent Expenditures
Presidential Victory Committee (Pro-Bush) $2,057,757
National Right to Life PAC $1,614,440
American Medical Association PAC $1,024,210
National Association of Realtors $999,016
National Rifle Association $957,666
National Abortion Rights Action League $718,756
Freedom Leadership PAC (Anti-Clinton) $191,584


1994
PAC Total Independent Expenditures
National Rifle Association $1,519,349
National Right to Life PAC $1,124,875
CONSERVATIVE REPUBLICAN COMMITTEE$439,136
Clean Up Congress (Anti-Oliver North) $355,481
Defeat that Son-of-a-Bush Comm. (Anti-Oliver North) $142,035
Minnesota Citizens Concerned For Life $124,868
Auto Dealers & Drivers $113,414

SOURCE: FEDERAL ELECTION COMMISSION

THE PACKWOOD DIARIES:
EVIDENCE OF ABUSE

Independent expenditures are supposed to be made without any consultation or coordination with the candidate who is the intended beneficiary of the independent campaign. Questions may arise as to whether the expenditures are truly "independent." Former Sen. Bob Packwood's (R-Ore.) diaries indicated that, at least in his case, groups including the NRA and the Auto Dealers and Drivers for Free Trade PAC actually coordinated with Packwood's campaign before making independent expenditures. In a diary entry from March 20, 1992, Packwood refers to the Auto Dealers PAC, saying:

Apparently the Automobile Dealers are willing to do some spending against AuCoin. Of course, we can't know anything about it. We've got to destroy any evidence we've ever had of (blank) so that we have no connection with any independent expenditure.

Without evidence such as a diary entry, coordination with a candidate before independent expenditures are made would be extremely difficult to prove. The Center for Responsive Politics filed a complaint with the FEC against Packwood, the NRA, and the Auto Dealers PAC. As of October 1996, the FEC had not ruled on the case.

POLITICAL PARTIES CAN ACT INDEPENDENTLY FROM CANDIDATES

The Supreme Court recently ruled in Colorado Republican Campaign Committee v. Federal Election Commission 39 that political parties can make unlimited independent expenditures on behalf of candidates. Prior to the decision, it was assumed that parties could not act independently from their candidates. Party spending directly urging the election or defeat of a candidate (express advocacy) was limited to a ceiling on "coordinated expenditures." The cap is based on a state's voting age population, therefore, party spending for senatorial candidates in 1994 ranged from $58,000 in less-populated states to $1.3 million in California. Now, in addition to coordinated expenditures, the parties are free to spend what they want to influence their nominees' election to office, as long as the spending is "independent" of the candidates' campaigns.

Exactly how "independent" the parties must be remains uncertain. Some observers believe that the FEC and lower courts will interpret the decision to mean that any communication or coordination with candidates will prevent the parties from making independent expenditures. Democratic Congressional Campaign Committee Chairman (DCCC) Martin Frost seems to agree. "Because both political parties have been working directly with candidates, coordinating activity for the past 20 months, independent expenditures by the party committees would be impossible at this point in the cycle," Frost said.40

But the National Republican Senatorial Committee, which has more cash on hand than the DCCC, sees the situation differently. Spokesman Gordon Hensley said the committee is "fully prepared to take advantage of the ruling."41 Additionally, NRSC executive director John Heubusch said the decision "clearly works to our advantage."42

Recent activity at the FEC also suggests a difference of opinion and a likely debate on the issue of independence. The Republican commissioners indicated that they thought the parties could be independent if they did not contact the candidate regarding the particular expenditure. The FEC's general counsel and the Democratic commissioners were more inclined to think that any communication with a candidate about his campaign would preclude the party from making independent expenditures.43

While the FEC will have additional opportunities to hash out the issue when it debates proposed rules on independent expenditures in 1997, the issue may be decided by the courts. House and Senate Democratic campaign committees filed suit in federal court seeking "judicial direction" on how to make independent expenditures. The NRSC, on the other hand, set up an "independent expenditure division" and started paying for television ads.44 According to an NRSC spokesperson, by October 1996, the independent expenditures division had produced ads targeting races in Colorado, Kansas, Louisiana, Minnesota, New Jersey, Oregon, Rhode Island, and Wyoming, with more ads still to come.

Regardless of how the debate on independence turns out, the Colorado Republican case opens the door to more money in politics early in the election cycle. Starting with the 1998 elections, the parties are certain to spend more on mudslinging ads against incumbents, long before challengers are named. The parties also will funnel money to states where close races are expected, knowing they might reach their coordinated expenditure limits and wanting to spend as much as possible to elect their nominees. In addition, the freedom to spend more will pressure both parties to raise more - by wresting ever more money from wealthy individuals and PACs.

WEALTHY INDIVIDUALS PERFORM THE INDEPENDENT EXPENDITURE TRICK, TOO.

Historically, PACs have taken advantage of the independent expenditure loophole most often. Individual contributors who want to skirt the law's contribution limits are far more likely to make soft money contributions to a political party than they are to make independent expenditures. A study of independent expenditures by individuals suggests that through 1988, only 22 individuals had spent more than $10,000 on independent expenditures.45 The largest individual independent expenditure up to that point was made by Michael Goland in 1980, who spent $1.1 million on advertising against Sen. Charles Percy (R-Ill.).46 His record could be broken this year. Wyoming attorney Thomas Tripp reportedly plans to spend between $2 million and $5 million on independent expenditures favoring Bob Dole.47



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