by Robin Parkinson | 2011-12-20
Übersicht
The U.S. Supreme Court’s January 2010 Citizens United v. FEC ruling permitted corporations and unions to spend unlimited amounts of money from their general treasuries on political expenditures. In response, North Carolina lifted the state’s ban on political expenditures paid for by corporate and union treasuries.
This report analyzes the independent spending on state campaigns in North Carolina from 2006 through 2010 and reviews the actual quality of disclosure in North Carolina.
Independent spending in 2010 more than quadrupled from 2006, the last comparable election. Since most of the 2010 spending occurred after the new law (HB 748) went into effect, it is possible that the increase was, at least in part, due to the lifting of the state ban. The most independent spending happened in 2008 with $8.8 million, most of which targeted the competitive open gubernatorial race.
Three spenders associated with conservative millionaire Art Pope targeted 16 of 24 races in 2010 that saw a Democratic incumbent lose reelection. Pope’s groups spent nearly $2 million targeting 27 legislative races, accounting for 72 percent of the independent spending in 2010.
North Carolina is one of just 17 states that require reporting of both electioneering communications and independent expenditures. During the three elections studied, a total of $12 million was spent independently, amounting to 8 percent compared to the $152.5 million raised directly by candidates. Most of that independent money—$10.5 million—was spent on electioneering communications; just $1.6 million was spent on independent expenditures. Compared to 2006, spending on electioneering communications increased by 716 percent in 2010, while independent expenditures only increased by 79 percent.
Methodology
The National Institute on Money in State Politics collected independent expenditure reports filed by individuals and committees with state disclosure agencies in states that provide robust disclosure. These states define “independent expenditure” and/or “electioneering communication” in statute at least as thoroughly as the federal definition.
The Institute used the information provided on disclosure reports to assign an occupation code to the filers. When that information was not provided, staff conducted additional research to determine a filer’s economic interest, where possible. The occupation codes are based on the Standard Industrial Classification system used by the federal government.
If an expenditure listed multiple targets, and the amount paid did not specify how much was attributable to each target, the target amount was left blank. Therefore, the total spent on each target may be under-reported.
The Institute does not equate money spent in opposition to one candidate with money spent in support of that candidate’s opponent and instead discusses the money spent on each race. Only expenditures made for the purpose of influencing state elections were collected and analyzed for this report.
State of Disclosure in North Carolina
North Carolina is one of 17 states that require the reporting of two types of independent spending: independent expenditures and electioneering communications.
An independent expenditure is defined as:
“[…]an expenditure to support or oppose the nomination or election of one or more clearly identified candidates that is not a coordinated expenditure. Supporting or opposing the election of clearly identified candidates includes supporting or opposing the candidates of a clearly identified political party. A contribution is not an independent expenditure. As applied to referenda, the term "independent expenditure" applies if consultation or coordination does not take place with a referendum committee that supports a ballot measure the expenditure supports, or a referendum committee that opposes the ballot measure the expenditure opposes.”1
North Carolina requires spenders to report both the funds they received and the funds spent on independent expenditures. These expenditures are first reported within 24 hours of making an expenditure that exceeds $5,000. After that initial report, they are reported on a regular schedule.2
Independent expenditures are required to be reported on either form CRO-2520 or CRO-2210C.3 These forms require the full name of the candidate being targeted, and whether the expenditure supported or opposed the candidate. The reports also require the name and address of the payee to be listed, along with the purpose of the expenditure.
An electioneering communication is defined as:
“any broadcast, cable, or satellite communication, or mass mailing, or telephone bank that has all the following characteristics:
a. Refers to a clearly identified candidate for elected office.
b. Is aired or transmitted within 60 days of the time set for absentee voting to begin pursuant to G.S. 163‑227.2 in an election for that office.
c. May be received by either:
1. 50,000 or more individuals in the State in an election for statewide office or 7,500 or more individuals in any other election if in the form of broadcast, cable, or satellite communication.
2. 20,000 or more households, cumulative per election, in a statewide election or 2,500 households, cumulative per election, in any other election if in the form of mass mailing or telephone bank.”4
Electioneering communication expenditures are reported on form CRO-2340,5 and must be reported within 24 hours of making any expenditure that totals at least $10,000.6 Electioneering reports identify the candidates mentioned in the communications. Those making electioneering communications, like independent expenditures, are required to report how their money was spent and report the name and address of the business that was paid.
Both electioneering communications and independent expenditures can be found on North Carolina’s campaign finance website by searching for reports by report type. This search brings up a list of independent expenditure or electioneering communication filers, but each report has to be viewed individually.
Top Independent Spenders in North Carolina, 2006–2010
Three spenders were responsible for 75 percent of the total independent spending made in North Carolina from 2006 through 2010, two of which were only active during the 2008 election.
The Republican Governors Association (RGA) is a 527 organization whose primary mission is to “help elect Republicans to governorships throughout the nation.”78 The RGA spent all of its money on electioneering communications in 2008 that identified gubernatorial candidates Bev Perdue (Democrat) and Pat McCrory (Republican).
Alliance for North Carolina, also a 527 organization, was funded in 2008 primarily by the Democratic Governors Association. Like the RGA, the organization spent all of its money on electioneering communications on the 2008 gubernatorial race. The only candidate the group identified was Republican Pat McCrory.
Real Jobs North Carolina, one of three spending groups tied to the conservative North Carolina millionaire James Arthur Pope,9 spent all of its money on electioneering communications targeting 19 legislative races (13 house and 6 senate) during the 2010 election. The Democratic incumbent was unseated in 16 of the 19 races targeted by this spender.
2010 Elections in North Carolina
In 2010, a total of $2.7 million was spent independently, just 7 percent compared to the $37.7 million raised directly by candidates in 2010. Most of the money—more than $2.1 million—was spent on electioneering communications; $558,504 was spent on independent expenditures.
Three of the four top spenders were associated with James Arthur (Art) Pope, the millionaire owner of Variety Wholesalers: Real Jobs North Carolina, Civitas Action, and Americans for Prosperity.10 Together, these three groups were responsible for 72 percent of all the independent spending in 2010.
Republicans won 20 of the 27 legislative races targeted by Pope’s organizations in 2010, and both the house and senate went to a Republican majority for the first time since 1870.11
The North Carolina Homeowners Alliance, a group associated with the North Carolina Association of Realtors, was the other prominent top spender, making $214,026 in independent expenditures supporting three Democrats and four Republicans.
Three senate races saw more than $200,000 in independent spending in 2010. In all three, the Democratic incumbent was defeated by the Republican challenger.
- In Senate District 47 drew the most spending, with $308,055. Incumbent Democrat Joe Sam Queen was targeted by $268,680 in spending by Real Jobs North Carolina and Civitas Action. Queen’s opponent, Republican Ralph E. Hise, Jr., was targeted by $39,374 in spending, mostly by an auto dealers group, Driving North Carolina Forward, and by Americans for Prosperity. Hise won the election with 56 percent of the vote.
- Senate District 24 drew $307,459. Republican challenger Richard Wallace Gunn, Jr. was targeted by $164,214 in independent spending, the majority of which came from the North Carolina Homeowners Alliance. Democratic incumbent Anthony Emanuel Foriest was targeted by $143,245, all from the two groups associated with Pope: Real Jobs North Carolina, and Civitas Action. Independent spending on both candidates totaled less than the amount they raised in direct contributions. Foriest raised $571,445 and Gunn raised $508,138. Gunn unseated the incumbent with 53 percent of the vote.
- Senate District 50 drew $279,666 in independent spending. A majority of the money ($265,667) was spent by Real Jobs North Carolina and Civitas Action targeting Democratic incumbent John Snow. In a close election, Snow lost to Republican challenger Jim Davis by less than half a percent of the vote.
Nearly all of money spent independently in 2010 paid for broadcast media ($1.2 million), direct mail ($721,395), and get-out-the-vote ($699,706). The highest paid company, Specialized Media Services, was located in Charlotte, North Carolina and received all of its $1.1 million from Real Jobs North Carolina.
2008 Elections in North Carolina
In 2008, a total of $8.8 million was spent independently, which is just 11 percent compared to the $82.1 million raised directly by candidates.
Two spenders—the Republican Governors Association and the Alliance for North Carolina (funded by the Democratic Governors Association)—were responsible for 86 percent of the total independent spending in 2008. Both were 527 organizations that spent only on electioneering communications targeting the gubernatorial race.
The open race for governor was the top targeted race in 2008, with $7.7 million in independent spending. The majority of that amount ($7.5 million) was spent by the Republican Governors Association and the Alliance for North Carolina.
Both groups spent only on electioneering communications, so their position on candidates is not identified. The Republican Governors Association disbursed $4.1 million on expenditures that identified Democrat Bev Perdue, the former lieutenant governor, while the Alliance for North Carolina spent $2.9 million on expenditures that identified Republican Pat McCrory. Perdue raised $14.7 million in direct contributions, while McCrory raised $6.2 million. In a close election, Perdue won with slightly more than 50 percent of the vote.
How the Money was SpentMore than 80 percent of the independent spending was expended for miscellaneous advertising and broadcast media, with $4.1 million and nearly $3 million, respectively. The most money was paid by the Republican Governors Association to Smart Media Group, in Alexandria, Virginia.
2006 Elections in North Carolina
In 2006, a total of $570,734 was spent independently, which is just 2 percent compared to the $32.6 million raised directly by candidates.
Spender | Organization Type | Total |
---|---|---|
Asian Pacific Bar of California | Lawyers | $259,101 |
North Carolina Democratic Party | Political Party | $123,130 |
Total | $382,231 |
Two of the seven independent spenders in 2006 were responsible for 67 percent of the total spending. The top spender, a law association named Asian Pacific Bar of California,12 only made electioneering communications, while the North Carolina Democratic Party only made independent expenditures.
While it is unknown how much the Asian Pacific Bar of California spent on each candidate, they reported that they spent all of their $259,101 targeting multiple supreme court candidates.
The North Carolina Democratic Party also targeted mostly supreme court candidates with their $123,130, but half of their expenditures targeted multiple candidates and the amounts spent on each individual candidate are unknown. The $66,672 that does have specified target amounts was split fairly evenly between Robin Hudson, Sarah Parker, and Patricia Timmons-Goodson, but no candidate positions were identified.
House District 41 was targeted by the most independent spending in 2006, with $60,899. All of the money was independent expenditures identifying Democrat Ty Harrell, but no position was listed even though spenders were required to disclose their positions on candidates. Service Employees International Union spent $55,899, and Conservation Council of North Carolina spent $5,000. Harrell raised $307,945 in direct contributions, and defeated his incumbent Republican challenger, J. Russell Capps.
How the Money was SpentThe majority of the money (96 percent) was spent on broadcast media ($283,101) and direct mail ($266,529). The most money was paid to Tim McKay Consulting, in Raleigh, North Carolina, which received all of Asian Pacific Bar of California’s $259,101 for broadcast media.
Fazit
North Carolina is one of only 17 states that require reporting both electioneering communications and independent expenditures, allowing for a complete picture of independent spending in the state. Although North Carolina has good reporting requirements, multiple targets are often listed for the same expenditure, making it impossible to tell exactly how much money was spent targeting a specific candidate. In addition, searching through the state’s database to get the complete picture of independent spending is difficult, as one must look through every single expenditure record to find independent spending.
Independent spending more than quadrupled in 2010 from the comparable 2006 election, possibly because the state’s ban on corporate and union spending was lifted before a majority of the spending occurred in 2010.
In 2010, 24 Democratic incumbent legislators lost their reelection bids; as a result, Republicans took control of both the senate and house for the first time since 1870.13 Three organizations associated with conservative millionaire Art Pope targeted 16 of those 24 races. Pope’s groups dominated the spending in 2010, with nearly $2 million targeting a total of 27 legislative races, accounting for 72 percent of the independent spending in 2010.
- 1. North Carolina State Code, Chapter 163, Article 22A, available from http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/ByArticle/Chapter_163/Article_22A.html, accessed Dec. 1, 2011.
- 2. “2010 Campaign Finance Manual,” available from: https://www.ncsbe.gov/GetDocument.aspx?id=2275, accessed Dec. 1, 2011.
- 3. “Required NC Campaign Reporting Forms,” North Carolina State Board of Elections, available from http://www.sboe.state.nc.us/content.aspx?id=10#disclosure_forms, accessed Dec. 1, 2011.
- 4. North Carolina State Code, Chapter 163, available from: http://www.ncga.state.nc.us/EnactedLegislation/Statutes/HTML/BySection/Chapter_163/GS_163-278.6.html, accessed Dec. 1, 2011.
- 5. “Required NC Campaign Reporting Forms,” North Carolina State Board of Elections, available from http://www.sboe.state.nc.us/content.aspx?id=10#disclosure_forms, accessed Dec. 8, 2011.
- 6. “2010 Campaign Finance Manual,” available from: https://www.ncsbe.gov/GetDocument.aspx?id=2275, accessed Dec. 8, 2011.
- 7. “About,” Republican Governors Association, available from http://www.rga.org/homepage/about/, accessed Dec. 8, 2011.
- 8. The definition of a 527 organization can be found at http://www.irs.gov/newsroom/article/0,,id=103480,00.html, accessed Dec. 8, 2011.
- 9. Mayer, Jane, “State for Sale,” The New Yorker, October 10, 2011, available from http://www.newyorker.com/reporting/2011/10/10/111010fa_fact_mayer, accessed Nov. 21, 2011.
- 10. Ibid.
- 11. Ibid
- 12. More information about the Asian Pacific Bar of California can be found at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCUQjBAwAQ&url=http%3A%2F%2Fasianpacificbar.org%2Fwp-content%2Fuploads%2F2010%2F01%2FABC-Ltr-re-Chen.Nguyen.Gee.pdf&ei=DhjZTtfHFNSlsQLizdz0DQ&usg=AFQjCNF4rhe-InT2CcvUvdb3bZ-pKAv--A, accessed Dec. 8, 2011.
- 13. Mayer, Jane, “State for Sale,” The New Yorker, October 10, 2011, available from http://www.newyorker.com/reporting/2011/10/10/111010fa_fact_mayer, accessed Nov. 21, 2011.
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