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Presidential candidate Newt Gingrich (R-GA) has apparently exploited a loophole in campaign finance law that has allowed him to build what McClatchy News calls “a political money machine that raised $54 million over five years,” according to McClatchy reports. Gingrich has used “a supposedly independent political committee that collected unlimited donations” to “finance… a coast-to-coast shadow campaign that raised his profile and provided a launch pad for his presidential run.” Critics call the ASWF issue another aftereffect of the Citizens United decision (see January 21, 2010).
$54 Million over 5 Years - The Gingrich-supporting PAC, “American Solutions for Winning the Future” (ASWF) was closed down in July 2011. Organized as a so-called “527 group” (see 2000 - 2005 and June 30, 2000), the tax-exempt, “nonprofit” organization raised $28.2 million in the two-year period ending December 31, 2010, the last period for which McClatchy has data. The Center for Responsive Politics reports that ASWF raised almost double the amount garnered by the next closest 527. The organization raised some $54 million throughout its existence, from 2006 to July 2011. McClatchy has learned some of the details behind ASWF and is now revealing them to the public. The organization provided at least $8 million to pay for the chartered luxury jets that Gingrich used to fly back and forth around the nation for public appearances and campaigning for president. The jet charters occurred during the 2008 and 2012 presidential primaries.
Largely Financed by Billionaire, Corporate Donations - ASWF has accepted enormous cash donations from billionaires such as Sheldon Adelson, a Las Vegas casino owner, who has emerged as Gingrich’s primary benefactor. Adelson has given $7.65 million to ASWF, including a million-dollar startup contribution in 2006. According to an Adelson spokesperson, “he and Speaker Gingrich go back a number of years.” Adelson is a prominent supporter and financier of Israeli Prime Minister Benjamin Netanyahu, and like Gingrich holds far-right, aggressively territorial views about Israel. Gingrich has made provocative statements about Israel and the Palestinian people over the years, denying that the Palestinians are a separate people and declaring his support for Israel’s forced-settlement plans that have displaced many Palestinians. A Gingrich spokesman says Adelson and others merely gave to the organization because they agree with Gingrich’s views. Charlotte, North Carolina, real estate developer Fred Godley gave ASWF $1.1 million in 2007 and another $100,000 in 2009. Energy firms donated heavily to ASWF: Peabody Energy, the world’s largest private coal producer, and its chief lobbyist Fred Palmer gave ASWF $825,000. Arch Coal, the US’s second-largest coal company, gave $100,000. Oil and gas firm Devon Energy gave $400,000, as did American Electric Power Company and its CEO Michael Morris. Plains Exploration Company gave $200,000. The late Cincinnati billionaire Carl Lindner gave $690,000. Dallas real estate firm Crow Holdings gave $600,000. Minnesota broadcasting mogul Stanley Hubbard gave $385,000. Wisconsin businessman Terry Kohler gave $328,082. California businessman Fred Sacher gave $275,000. NASCAR president James France gave $264,000. Home Depot co-founder Bernie Marcus gave $250,000. Another Las Vegas casino owner, the late Frank Fertitta Jr., gave $250,000, along with his sons; together the three of them co-owned a casino and the Ultimate Fighting Championship sports league. Former CarMax and Circuit City chief Richard Sharp gave $150,000. Stock brokerage titan Charles Schwab gave $150,000. Cincinnati Reds owner Robert Castellini gave $146,000. Political science professor Larry Sabato says that in light of such enormous contributions, “there’s no way that any politician is going to deny you much of anything that you want.”
New Super PACs Supplanting ASWF - In place of ASWF, two new pro-Gingrich super PACs have formed to support Gingrich’s attempt to close the gap between himself and frontrunner Mitt Romney (R-MA) in the Republican primary.
'Diabolical Scheme' to 'Circumvent' Campaign Finance Law - Campaign expert Lawrence Jacobs calls Gingrich’s use of ASWF “clever,” and adds, “Looking back, and now seeing Gingrich as the frontrunner… it’s an ingenious, diabolical scheme to circumvent what’s left of the campaign finance regime.” Jacobs says of the organization: “The money wasn’t used literally to finance a campaign for a particular office. It was used for a general, over-time campaign to keep Gingrich alive politically—an enormously luxurious campaign operation to sustain his political viability for the right time to jump into the presidential race. It’s no accident that he’s popped in in 2012.” Jacobs says ASWF operated “right on the line” of legality. Sabato says ASWF played a key role in resuscitating Gingrich’s flagging political career. His term as speaker of the House ended in scandal and resignation, and his high-profile divorces and profligate personal and campaign spending had led many to assume that Gingrich’s political career was over. But Sabato says Gingrich used ASWF to create what he calls a new kind of informal candidacy, one that shows the inherent weakness of campaign finance laws that are supposed to ensure “nobody could give so much money that they would become too influential, too powerful.” ASWF was always nominally independent, as required by law, but in 2009 Gingrich ousted its board of directors and took the title of general chairman. Gingrich never formed a formal exploratory committee before declaring his candidacy for president. McClatchy observes, “None of his Republican presidential rivals, nor any other federal candidate for that matter, is known to have operated such a committee before formally declaring his or her candidacy.” Gingrich spokesperson R.C. Hammon says Gingrich did not begin considering a presidential campaign until April 2011, and all of his committee activities were “legitimate.” Hammond says: “The purpose of American Solutions was to advance an agenda of free enterprise and tri-partisan solutions. Those were the activities he was undertaking.” ASWF is just one of a network of political entities that Gingrich has created over the last 10 years. He has managed to enrich himself by charging lucrative fees for speeches, consulting for undisclosed health care industry firms, and selling historical documentaries and books. After the group was formed in the fall of 2006, Gingrich sent a letter to potential backers calling it a unique organization “designed to rise above traditional gridlocked partisanship” and to develop “breakthrough solutions to the most important issues facing this country.” Vin Weber, a former Minnesota congressman who served on ASWF’s board for two years, says the group “certainly helped build his path back into political prominence.” He adds, “They basically sent Newt around the country promoting American Solutions.” Weber is now supporting Romney for the presidency. He says that ASWF had “not gotten really up to speed in terms of programming” when he received a call, apparently in 2008, advising him that the board was being abolished. Gingrich then took over as the group’s general chairman.
Relatively Little Spent on Campaign Initiatives, Most Spent on Raising More Money - ASWF proposed a number of campaign and advertising initiatives that would appeal to conservative donors, including:
a “Drill Now!” movement aimed at increasing US oil exploration;
attempts to rally opposition to President Obama’s health care reform efforts;
a campaign to fight climate change legislation that would call for reduced carbon emissions by industrial concerns.
But of $37.9 million raised from 2006 through 2009, the committee spent just $7.2 million on programs, according to its filings with the Internal Revenue Service. Most of the ASWF money was spent on telemarketers and direct-mail appeals to develop a loyal pool of wealthy contributors. InfoCision, an Ohio telemarketing firm that specializes in building lists of “small” donors, was paid some $30 million over the course of the organization’s existence, exhausting much of the money contributed. $17 million of that money was used to finance Gingrich’s travel. (Gordon 12/19/2011; Waldron 12/19/2011)
Politico reporters Kenneth P. Vogel and Tarini Parti report on the difficulty of getting solid information about the donors being organized by the billionaire Koch brothers. Oil magnates Charles and David Koch (see 1977-Present, 1979-1980, 1981-2010, 1984 and After, Late 2004, May 6, 2006, April 15, 2009, May 29, 2009, December 6, 2009, November 2009, July 3-4, 2010, August 28, 2010, August 30, 2010, September 24, 2010, January 5, 2011, October 4, 2011, and February 14, 2011) intend to raise at least $400 million to defeat President Obama in the 2012 election (see Late May 2012), and to ensure victory for Republicans in state and local races around the nation (see February 21, 2012). Vogel and Parti call the Koch political operation “its own political party,” almost, even going so far as to hold its own semi-annual conventions, including one scheduled for late June in San Diego. That convention will bring together dozens of millionaire and billionaire conservatives, who will write big checks for the Koch efforts. Additionally, the Kochs will unveil their new voter database, Themis (see April 2010 and After), which they expect will help in targeting potential Republican voters around the country. Themis played a big part in a recent successful effort to stop Governor Scott Walker (R-WI) from being recalled, as did huge amounts of Koch-organized donations on behalf of Walker. Three of the prime figures in the Koch efforts are convention “emcee” Kevin Gentry and political operatives Marc Short and Tim Phillips (see May 29, 2009); the operation is orchestrated primarily by Koch advisor and operative Richard Fink. Additionally, the Koch brothers intend to take over the Cato Institute think tank (see February 29, 2012) and make it more politically active. Minnesota television station owner Stanley Hubbard, a longtime Koch supporter, says: “They ask for support—and they get it because we all love our country and we have a different vision than do the liberals. I’ve gotten friends to be involved, and I think others have, too, so I would guess, yes, that’s expanding.” Vogel and Parti expand on how secretive the Koch network (which they call “Koch World”) actually is. They are unable to find out where the San Diego convention is to be held, though they did determine that it is scheduled to take place over the weekend of June 23. A Republican who has worked with Koch-backed groups says: “The Koch groups are very complex in the way they do things. They’re difficult to penetrate from the outside, which is smart. You often need a Sherpa.” The conventions are heavily patrolled by hired security guards, who at one recent convention threw out a Politico reporter under threat of arrest. Participants are required not to discuss the convention with outsiders, including making posts on Facebook or Web blogs. (The winter 2011 convention in Rancho Mirage, California, leaked to the press, sparking what Politico calls “raucous protests” outside the exclusive resort hosting the conference.) According to Vogel and Parti, Phillips runs the lobbying organization Americans for Prosperity (AFP—see Late 2004 and November 2009). Short oversees the spending of Koch network monies by other approved groups, some of which air television ads attacking Democrats. Gentry raises money for the Koch network. Gentry often uses urgent and even apocalyptic rhetoric in his fundraising appeals, warning potential donors of “dangerous and imminent threats” to American society and comparing the Koch conventions to the Continental Congress of 1776. One recent email lauded efforts by Supreme Court Justice Clarence Thomas to help the Koch brothers’ fundraising. Gentry also spearheads the fundraising efforts for an informal network of conservative think tanks such as the Heritage Foundation, AFP, and the Texas Public Policy Foundation. Some conservatives are uncomfortable with the Koch brothers’ attempts to gain dominance in conservative party politics. “Koch has been angling for the last three or four years to consolidate more of the conservative movement within their network,” says one conservative operative. “That’s why they do these seminars—to try to consolidate more big donors’ money and direct it into their projects.” The operative admits that the Koch fundraising efforts are very effective, saying, “Some of the donors believe giving to one source makes it easier for them instead of having to give to a dozen different places, and others just want to come out to hang with the billionaire brothers and be part of a very elite universe.” Koch conventions regularly feature prominent conservatives like Thomas and fellow Supreme Court Justice Antonin Scalia, Texas Governor Rick Perry, New Jersey Governor Chris Christie, Virginia Governor Bob McConnell, House Majority Leader Eric Cantor (R-VA), and right-wing radio hosts Rush Limbaugh and Glenn Beck. While federal documents track some $120 million in donations from recent Koch summit donors, most of the money raised and spent goes untracked, instead being hidden away by “nonprofit” groups that purport to be non-political social advocacy groups. Gentry has assured donors, “There is anonymity that we can protect.” (Vogel and Parti 6/15/2012)
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