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How Dark Money Helped Democrats Hold a Key Senate Seat

In Montana, liberals bought ads for a libertarian candidate who likely siphoned crucial votes away from the Republican challenger.

| Fri Dec. 28, 2012 7:02 AM EST

Documents for pop-up nonprofits like the conservative America Is Not Stupid and A Better America Now, both of which formed in 2011, led back to a Florida law firm that offered no explanations. The Citizens for Strength and Security Action Fund, a liberal pop-up group that spent millions on elections in 2010, closed down in 2011. In its place came a new group: the Citizens for Strength and Security Fund, which earlier this year bought almost $900,000 in ads attacking Rehberg and the Republican Senate candidate in New Mexico.

Groups picked names that seemed designed to confuse: Patriot Majority USA is liberal. Patriotic Veterans is conservative. Common Sense Issues backed conservatives. Common Sense Movement backed a Democrat.

As in the 2010 midterms, the dark money spent in 2012 had a partisan tilt. Conservative groups accounted for about 84 percent of the spending reported to the FEC—mainly through Crossroads GPS, Americans for Prosperity and the U.S. Chamber of Commerce. Liberal groups spent 12 percent of the dark money. Nonpartisan groups made up the rest.

Despite shelling out hundreds of millions of dollars, conservatives lost big. Only about 14 percent of conservative dark money went to support winners.

Still, campaign-finance reformers say it's a mistake to minimize the influence of this money.

"What these donors were buying was access and influence, not only to the candidates but to the party machine," said Paul S. Ryan, senior counsel for the Campaign Legal Center. "And they will get that access. On the Republican side, you have people lining up to kiss the ring of (billionaire donor) Sheldon Adelson. And on the Democratic side, you have even people critical of these groups meeting with the funders of these groups. This money is not going away."

Even though liberal groups spent far less than conservative ones, they had a higher success rate. About 70 percent backed winning candidates.

Some Democrats have shown distaste for the dark-money arts, pushing for more transparency. But liberal strategists are preparing to ramp up their efforts before the next election, unless the IRS, Congress or the courts change the rules.

"We probably have a lot less comfort with some of the existing rules that allow for the Koch brothers to write unlimited checks to these groups," said Navin Nayak, the senior vice president for campaigns at the League of Conservation Voters, a liberal social welfare nonprofit for more than 40 years. "But as long as these are the rules, we're certainly going do our best to make sure we're competitive and that our candidates have a shot at winning. We're certainly not going to cede the playing field to the Koch brothers."

* * *

By the time Tester and Rehberg started buying TV ads, outside groups had been defining the race for a year.

Rehberg, 57, a six-term congressman and rancher often pictured wearing a cowboy hat and a plaid shirt, was portrayed as voting five times to increase his pay and charging an SUV to taxpayers. Tester, 56, a farmer with a flat top, was dinged for voting with Obama 95 percent of the time.

Tester's campaign went up with ads in March, mainly to counter the outside messages.

"The original plans were going up 60 or 90 days later than that," Tester said. "But it was important...We had to remind people of who I am."

His early ads highlighted his Montana roots, depicting him riding a combine on his farm and packing up Montana beef to carry back to Washington.

Rehberg had less money, so his earliest TV ads, which mainly attacked Tester, went up in May.

Neither Rehberg nor anyone from his media staff responded to requests for an interview on his views on campaign finance. In the past, he has said he supports the Citizens United ruling.

Meanwhile, conservative groups bought TV ads that hit at Tester but stopped just short of telling people how to vote. For instance, the conservative 60 Plus Association spent almost $500,000 buying TV ads featuring crooner Pat Boone criticizing Tester over the health care law. None of that was reported to the FEC.

Over the summer, the Concerned Women for America's legislative committee, Crossroads GPS and the U.S. Chamber of Commerce all weighed in. The TV spots were overwhelmingly negative, and many of them were cookie-cutter ads, similar to those that ran in other states against Democrats.

Liberal groups bought TV ads, too, but that was only part of their game plan. They spent their dark money on retail politics, hitting the streets and knocking on doors.

In January, the League of Conservation Voters set up two offices in Montana—one in Missoula and one in Billings. It canvassed voters and hired a full-time organizer, reaching out to 28,000 sporadic voters to urge them to vote early by mail.

Lindsay Love, the spokeswoman at Planned Parenthood Advocates of Montana, another nonprofit that doesn't report its donors for election spending, said the group targeted 41,000 female voters. More than 1,500 people ended up knocking on 28,500 doors and making 162,000 phone calls, she said. The group sent out about 470,000 pieces of mail.

"It's hard to unpack this," Parker said. "But it's fascinating to look at groups like the League, unions and Planned Parenthood. By and large, they did phones, canvassing, mail, very little TV. One of the best ways to get out the vote is personalized contact."

Many liberal groups active in Montana, including Montana Hunters and Anglers, were connected through Hilltop Public Solutions, a Beltway consulting firm.

Barrett Kaiser, a former aide to Montana's other Democratic senator, Max Baucus, is a partner at Hilltop and runs its office in Billings. The Hilltop website notes that Kaiser helped with Tester's upset Senate win in 2006. Kaiser is also a good friend of Messina, the manager of Obama's 2012 campaign, who also once worked for Baucus.

Kaiser was on the board of the Montana Hunters and Anglers dark money group. Another Hilltop employee in Billings served as the treasurer for the Montana Hunters and Anglers super PAC.

Hilltop partners in Washington also helped run two other dark money groups that spent money on the Montana race: the Citizens for Strength and Security Fund and the Partnership to Protect Medicare.

The League of Conservation Voters and Planned Parenthood Advocates of Montana paid management fees to Hilltop.

No one from Hilltop returned calls, but Nayak and Love said they worked with Hilltop independently of other groups.

Outside groups are allowed to coordinate with each other or use the same consultants—they're just not allowed to coordinate with a candidate. By working together, groups can disguise who is actually behind an ad.

In early July, for instance, the League of Conservation Voters gave $410,000 to the Montana Hunters and Anglers super PAC—almost all the money the group raised as of that date.

When the super PAC spent the money on TV ads against Rehberg later that month, the spots were paid for by what appeared to be an organization of Montana hunters, not some Washington-based conservationist group. Nayak said that was not a coincidence.

"We figured having a local brand like that and partnering with them on local issues made more sense than having a D.C. brand," he said.

Nayak said the League did not donate money for the later ads pushing Cox, the libertarian.

It's not clear where that money came from. The dark money side of Montana Hunters and Anglers paid for the radio ads. The super PAC bought the TV ads and had to disclose its donors, but FEC filings show its money came mainly from two other super PACs, which in turn reported getting most of their money from unions and dark money groups, including the League.

* * *

As the Montana Senate race approached its climax, as many as five fliers landed in voters' mailboxes daily. Robocalls, supposedly illegal in Montana, interrupted meals. Strangers knocked on doors, promising free pizza for voting. People turned off their TVs, dumped their mail without looking at it and stopped answering the phone.

"My ex and I moved in together, because he had cancer and I took care of him," said Louise McMillin, 51, who lives in the university district in Missoula. "He kept getting polling calls as he was dying. After he died, I kept saying, 'He's dead, could you take his name off the list?' And they said, 'Sure, sure.' And they kept calling."

The race stayed tight. Demand for TV ad slots spiked, so the TV stations started raising their prices. The law required them to charge candidates their lowest rate. But outside groups? They could be hit up for whatever the market would bear.

Rehberg's campaign paid $400 to run a 30-second ad during the show Blue Bloods on Oct. 19 on the CBS affiliate in Great Falls. A week later, Crossroads GPS paid $2,000 for a slot during the same show.

Anything was fair game for the ads. One, from the super PAC Now Or Never, made fun of Tester's buzz cut, then showed his hair growing down to his shoulders, a bizarre sequence apparently designed to signal his ties to Obama. Another ad, from the dark money group America Is Not Stupid, featured a baby with a gravelly voice saying he didn't know what smelled worse, his diaper or Tester.

"By the middle of October, people were just so tuned out and quite frankly disgusted by all these third-party ads," said Ted Dick, the executive director of the Montana Democratic Party. "We found that face-to-face conversations toward the end were most persuasive and effective. That's the lesson we're taking forward."

There are other lessons. Tester said the Montana race made clear that candidates will have to raise money sooner, and go up with TV ads faster. Although uncomfortable with outside money, Tester also said it's just the way things are now, even on the liberal side.

"I mean, look, they did it," he said. "And with as many ads that were against me, I was glad they did. But it needs to be transparent. I mean, everybody's needs to be transparent... It's important to know who's spending money on who so you know why they're doing it. And the way the system is set up right now, there is no transparency. Very little."

Campaign finance reformers agree that knowing who is behind a message helps people assess it.

One example: Two postcards sent to thousands of Montanans just before the election didn't include the required notice saying who paid for them. One said Rehberg had wasted "hundreds of millions of our tax dollars on pork barrel projects," and urged people to vote for Cox, "a champion for fiscal responsibility." The other called Rehberg "the king of pork" and told people to vote for Cox.

Cox said he didn't send them. The bulk-mail permit on the postcards came back to a Las Vegas company called PDQ Printing, according to the U.S. Postal Service. In an online manual, PDQ describes itself as "Nevada's preeminent Union printer." No one there returned phone calls.

Greenwood, the head of the Montana Republican Party, filed a complaint with the FEC over the mailers. The complaint blames liberal groups and says they "engaged in a duplicitous strategy of supporting the libertarian candidate, Dan Cox, in a desperate attempt" to siphon votes from Rehberg.

More than likely, that complaint won't be resolved for years.

Greenwood said he didn't think disclosure was a cure-all. But he also said the current system marginalized political parties.

"Whether it's Montana Hunters and Anglers or (the conservative super PAC) American Crossroads, they are not responsive to the grassroots," Greenwood said. "These are the professionals and the money men who are not responsive at all to people. The system as it is now does not reflect what people want."

Besides picking between Tester and Rehberg, Montanans got a chance in this election to say how they want the system to work. On the ballot was an initiative—largely symbolic in light of recent court decisions—that declared that corporations are not human beings and banned corporate money in politics.

Gov. Schweitzer, a Democrat, and Bertelsen, the former Republican secretary of state, campaigned for the initiative. In a shocker for backers, almost 75 percent of voters supported it.

"I realized it absolutely didn't have any legal basis to do anything dramatic," said Bertelsen, who is 94. "But it's a case of saying, 'We don't like it.' I guess we could just sit down and not say a word. But the Supreme Court—I think they made a mistake. Money isn't speech, anyhow. It's just money."

Correction (12/27): This story originally said that the libertarian candidate Dan Cox picked up more votes than any other libertarian on the Montana ballot. He actually picked up more votes than any other libertarian in a competitive race on the Montana ballot.

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