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POLITICS: PennAve

Is a fear of 'getting Koch'ed' hurting Republican super PACs?

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Politics,Congress,Barack Obama,Harry Reid,Campaign Finance,2014 Elections,David M. Drucker,Campaigns,PennAve,Koch brothers

Democratic super PACs have outraised their Republican counterparts by millions, a factor attributed in part to GOP donors' fear of being targeted by the Internal Revenue Service -- or “getting Koch'ed.”

Republican political operatives concede that there are multiple reasons for the Democrats' advantage in super PAC money raised.

Among them: Labor unions have become among their largest and most consistent donors. But this election cycle, two new challenges have chilled GOP super PACs' effort to raise cash from wealthy individuals and corporate donors: anxiety that they could get slapped with an IRS audit and unease that donating could lead to public demonization.

The former concern has arisen in the wake of revelations that the IRS has targeted conservative groups for extra scrutiny and leaked confidential information about their contributors. The latter is tied to Senate Majority Leader Harry Reid's relentless attacks on Charles and David Koch.

The two brothers are wealthy industrialists who have invested millions of dollars through their organizations to push conservative policies and help Republicans win seats in the midterm elections.

“Certainly, there is some abiding sense of distrust that people who give to these super PACs will be looked at more closely by federal authorities,” said Fred Malek, the finance chairman at the Republican Governors Association and a longtime major donor to GOP causes and candidates.

Added Charlie Spies, a Republican attorney who has run various super PACs, including the main outside group that supported Mitt Romney's 2012 presidential bid: "With some donors, Sen. Reid's concerted effort to demonize political giving as made an impact."

Democrats countered that Republicans are simply making excuses for their poor fundraising performance.

"Many super PACs are likely struggling simply because their donors realize what a poor investment they are," said Ty Matsdorf, spokesman for Senate Majority PAC. "If these groups are looking for reasons why their funding has dried up, they should probably start by looking in the mirror."

Political action committees defined as super PACs are permitted by U.S. election law to raise money in unlimited amounts from individual and corporate donors. These groups cannot coordinate directly with candidate campaigns or official party committees, but can spend all of their resources on political activity, including on advertising supporting and attacking candidates and issues. Super PACs must disclose their donors in public filings to the Federal Election Commission.

The Wall Street Journal reported this month that the largest Democratic-aligned super PACs had raised $82 million so far this election cycle, compared to just $47 million for the largest Republican-affiliated super PACs.

But politically oriented nonprofit organizations that support Republican policies have had no problem raising money this cycle, and are in fact doing better than their Democratic counterparts. Republican operatives say that's because, unlike super PACs, these nonprofits, classified as 501(c)(4) organizations by the IRS, don’t have to disclose their donors.

Consequently, GOP donors who have been apprehensive about giving to super PACs because they might face some sort of public or federal retribution have focused their giving on conservative nonprofits.

The problem for Republicans is that federal law limits what kind of political activity nonprofits can engage in, and how much of the their resources can be devoted to politics. In turn, a 501(c)(4) is much less effective at influencing campaigns than a super PAC.

“Those groups aren’t political so you get a different product on TV, but still it gives the donors a way to get in the policy game without worrying about Obama’s IRS looking over their shoulder,” a Republican operative who advises a super PAC told the Washington Examiner.

Congressional Republicans are positioned to make gains in the November elections, public opinion polls suggest. President Obama's approval ratings have sagged in the low to mid 40s for more than a year, Obamacare remains unpopular and voters are still skittish about the economy despite a booming stock market and recent jobs gains.

Republicans are expected to hold their House majority and need to win six seats to take control of the Senate. Senate Democrats are defending at least a half dozen seats in Republican-leaning states, and political odds-makers give the GOP at least a 50-50 chance of flipping the chamber, if not better.

The Democrats have a strong advantage in resources, however. That includes having raised more money through their House and Senate congressional campaign committees, and via the super PACs controlled by their allies. This election cycle, Senate Majority PAC, the main super PAC supporting Senate Democrats, had raised $27 million through the end of May; House Majority PAC reported raising $15 million during the same period.

Republican fundraisers caution that there is more at work depressing giving to GOP super PACs than fear of the IRS or being next on Reid’s political hit list.

Here are five other factors that have led to the Democratic advantage in super PAC funds:

Labor Unions: For years, organized labor has spent millions of money it collects in union dues on political campaigns; Republicans don’t have a comparable source of automatic funds to draw from. The funds have paid for advertising and get-out-the-vote activity. Now, unions are investing heavily in Democratic super PACs. This has the added strategic side benefit of providing Democrats with more central control of how their resources are spent. Recent donors to Senate Majority PAC include the National Air Traffic Controllers Association ($400,000 contributed in May.)

Democratic unity: Democrats have consolidated their super PAC giving to a greater degree than Republicans, who feature more outside spending groups on their side with varying goals. For instance, some GOP super PACs have been focused on the primaries, others on boosting individual senators. The Democratic super PACs are focused almost solely on boosting House and Senate candidates in the general election.

2012 hangover: Republican super PACs cleaned up in 2012, and many wealthy donors were angry when Romney lost the presidency and Republicans lost two Senate seats. That hangover has dissipated, but has remained strong enough that GOP fundraisers credit it with diminishing super PAC giving four months before the 2014 elections.

Reputation: It's notable that arguably the most successful Republican super PAC this cycle has been the RGA. The RGA can raise and spend money like a super PAC. It recently announced raising $26.6 million in the second quarter -- a record haul. Republican operatives say big GOP donors are still willing to give if they believe in the product, and many GOP donors are looking to Republican governors to help revive the party. Super PACs supporting individual senators, like Senate Minority Leader Mitch McConnell of Kentucky, have also been successful, attributed to the strong reputation those member have among donors.

Motivation: Super PACs intending to boost House Republicans have had trouble for the simple fact that GOP donors believe their party's House majority is safe. They're more inclined to invest in Senate races given the Republicans' prospects for winning the chamber.

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Author:

David M. Drucker

Senior Congressional Correspondent
The Washington Examiner

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