Money and Politics

When Mad Men meet dark money

Money in U.S. politics was once a straightforward thing, but we're now in the era of dark money. We look at who’s spending, how much, where the money’s flowing and what it’s paying for. Credit: Michael I Schiller/Reveal

Money in U.S. politics once was a straightforward thing. In 19th-century America, a politician running for office would pay to print ballots with his name on them and pay voters to cast them. The cost was about $2.50 per vote.

Clear, transactional and pretty undemocratic.

But the sheer amount of money involved now dwarfs every previous period of Wild West American politics – spending will top $5 billion by the end of the race to the White House by some estimates.

Enter Mad Men: This heap of money is fueling a barrage of political ads. Messages, which have cost more than $300 million so far, are being designed specifically for you – popping up in your Facebook feed or streaming into your living room during commercial breaks.

In this Reveal hour, a collaboration between The Center for Public Integrity’s campaign finance reporting team and WAMU in Washington, we look at who’s spending, how much, where the money’s flowing and what it’s paying for.

Producer and reporter Laura Starecheski takes us behind the scenes with John Dunbar and his team at CPI as they track the millions behind political ads.

In the second half of the show, Reveal takes a look at how kings are made with two political donor powerhouses: first, the new-money Texas fracking billionaires you’ve never heard of, who are backing Ted Cruz; then Wilson Sayre of WLRN in Miami takes us through the intricate dance of cash, candidates and environmentalists unfolding in Florida’s Democratic race.

Finally, we head to local city races, where WAMU’s Patrick Madden takes a look at what happens when super PACs hit close to home.

DIG DEEPER

Support for Reveal is provided by The Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation and Mary and Steven Swig.

Track list:


TRANSCRIPT:

Reveal transcripts are produced by a third-party transcription service and may contain errors. Please be aware that the official record for Reveal's radio stories is the audio.

Section 1 of 3          [00:00:00 - 00:14:04] (NOTE: speaker names may be different in each section)
Al: From The Center for Investigative Reporting and PRX, this is Reveal. I'm Al Letson. This week, we're looking at money in American politics. How much is given, who gives it, and why. Does it really make a difference? To help us out this week, we're joined by the Center for Public Integrity's John Dunbar. John is an executive editor who runs the Center's Buying of the President project. His reporting team meticulously tracks every single dollar spent in the race to the White House. Welcome John.
John: Good to be here, Al.
Al: We're going to get into a lot this hour, but first John, what's the biggest change money-wise since the last presidential election?
John: Well, the biggest change is that there's just a lot more of it. This is on track to be the most expensive election in American history. Almost a billion dollars, that's billion with a B, has been raised for the race to the White House already. Some estimates place the final total cost at more than five billion dollars. That's about double of what was spent in 2012.
Al: All this because in 2010, Citizens United came out. Now that was the Supreme Court decision that changed the entire landscape of political fundraising. How has that specifically changed it? I mean, what did that ruling do?
John: It's interesting because at the time, I don't think anybody really was paying a whole lot of attention to it, but it was a sea change. It's changed how elections are funded in a very profound way. One of the main things that decision did was open the flood gates for these things that we call super PACs.
Al: Okay, so let's say that I decided to run for office, and you wanted to create a super PAC just for me because you love my values and my great ideas. I'd be a great president because I would, and I look good in a suit, so let's say that you were running my super PAC. What limits would there be on you going out and getting money for me?
John:

 

[00:02:00]

Well, for one thing, I'm not supposed to coordinate with you, but for another thing, I can go out and collect unlimited amounts of money from practically any source. I can collect money from a corporation, I can collect money from a labor union, I can take money, like we see so much right now, from a billionaire. I can collect ten million dollars. I can go out, and I can run an ad saying that Al is just the greatest thing since sliced cheese, and it's all perfectly legal.
Al: I'm lactose intolerant so I won't eat the cheese, but I appreciate the love. There's no limits at all. You could basically bankroll my entire run.
John: Absolutely. I could pay for your, what they call the ground game, knocking on doors, handing out fliers-
Al: Paying for ads, right?
John: Right. Ads are by far the biggest expense, and the vast majority of those ads are attack ads, especially now.
Al: This is mostly on the republican side, right? I mean, you guys have found that on the democratic side, outside groups like super PACs are paying for just one percent of TV ads. On the Republican side, it's over half. How's that playing out?
John: Right now we're seeing a really interesting phenomenon actually. You've got Trump who's a billionaire himself, the Republican front-runner, and he doesn't rely on super PACs at all. Meanwhile, just this week, a group of Republican super PACs have gotten together, and they're going to spend anywhere between ten and twenty-five million dollars, we've read, to join forces and try to shoot him down in the key primaries in Ohio and Florida. Now, for some people who don't like Donald Trump, well, maybe they think super PACs aren't such a bad thing.
Al: Yeah, it just seems to me, if you're not Donald Trump and you don't have access to all this money, when these super PACs come after you you're kind of stuck.
John: Yeah, unless you're a billionaire or unless you have really an impressive grassroots support like Bernie Sanders has. To be competitive in this race, you better have a super PAC.
Al: That is John Dunbar of the Center for Public Integrity. He's going to be joining us throughout the show. John, talk to you in a bit and keep thinking about being my campaign manager. That'd be great.
John: Okay. Thanks, Al.
Al: John's team of reporters at the Center has been tracking money behind political ads throughout this election season. We're going to take a close look at how it's done with Reveal's Laura Starecheski.
[00:04:00]
Laura:
 

In an office building in Washington, D.C., one corner of the seventh floor is full of reporters in jeans and button down shirts, flats, and cardigans, quiet with concentration. Cady Zuvich is one of them, tracking the dollars flooding our political system. She's hooked into a stream of information that gives her a bird's-eye view of the whole country.

Cady: My entire inbox is just like ad alert, ad alert, ad alert.
Laura: They come from a special database, telling her when there's a new political ad set to air somewhere in the US. She's seen hundreds since the primary season started. Back in January when I first visited Cady, most of the ads were flowing into Iowa and one caught her eye.
Speaker 5: We are at war. Not just abroad, but here at home. With the clear and present threat of radical Islamic terrorism on the march, we must-
Laura: This is an ad for Ted Cruz.
Speaker 5: The one proven conservative for president. Stand For Truth Inc. is responsible for the content of this advertising.
Laura: That last line.
Speaker 5: Stand For Truth Inc. is responsible for the content of this advertising.
Laura: That's the part Cady pays attention to. Stand For Truth Inc. is a super PAC. The ad stood out to Cady because Stand For Truth is new. They just formed in November, and for a new group, they'd done something pretty big. They'd earmarked four million dollars for a thirty-second TV ads like the one you just heard, so who gave that four million dollars to Stand For Truth? To find out, Cady runs down a checklist of public documents. First on the list, super PACs have to register with the Federal Election Commission or FEC. She checked their website.
Cady: Okay. We have two pieces of information. We have the address, and we also have the committee's email address.
Laura: Which belong to a person. A guy in Kentucky names Eric Lycan as it turns out. We found his phone number.
Speaker 6:
[00:06:00]
You've reached the desk of Eric Lycan at Dinsmore [inaudible 00:05:57]. If this is an inquiry regarding a political committee-
Laura: Eric Lycan is the guy who files the paperwork for this super PAC. He's a lawyer who helps political campaign and super PACs navigate the legal landscape. He never responded to Cady's emails, so we sent a reporter to Lycan's law office in Lexington, Kentucky to try to get an interview.
Speaker 7: Good morning.
Laura: A secretary said Lycan wasn't in that day.
Speaker 7: Would it be possible for me to speak to his assistant?
Speaker 8: She is working on something right now.
Speaker 7: Would it be possible for me to make an appointment?
Speaker 8: You would have to call her.
Laura: We never heard anything back from his office.
Cady: That's about all we know.
Laura: That was all we knew until about a month later, anyway. A slew of new FEC filings came out at the end of January, so I went back to D.C. to see what we could learn about who was giving money to Stand For Truth. There were just twenty-nine donors.
Cady: The top two contributions are each five hundred thousand dollars, but Adam and Tara Ross-
Laura: Together, they gave a million. Who are they?
Cady: Let's find out, so Adam Ross, and he is Goldcrest Investments ...
Laura: We found out that Adam and Tara Ross are a husband and wife team. He's an investment fund CEO in Dallas, and she's a lawyer who's written a few constitutional history books. We wanted to ask the Rosses why they'd chosen to drop a million dollars to support Ted Cruz.
Speaker 10: Gold Crest Capital.
Cady: Hi, this is Cady Zuvich. I'm a reporter at the Center For Public Integrity. Is ...
Laura: We left a message.
Cady: ... Adam Ross available?
Speaker 10: All right, thank you.
Cady: All right. Thanks so much. That happens a lot.
Laura: Do you ever get a call back?
Cady: No. I never get a call back.
Laura:
[00:08:00]
The Rosses never responded to our inquiries, but with a little digging, we found out more about them. Adam sits on the board of the Republican Jewish Coalition , along with some of the biggest Republican donor billionaires in the country. On Tara Ross's website she says she's, quote, conservative but with a definite libertarian streak, exclamation point. They've both been donating small amounts to republican campaigns for years, but the million dollar donation to Cruz's super PAC dwarfed everything they've given before. How far did that million dollars go? Stand For Truth ran attack ads against Rubio and Trump in South Carolina that cost about two million total, so the Ross's donation would have paid for half of those ads.
Now onto more shadowy territory. A group that's one of the big players this primary season is not a super PAC, and they've spent millions on ads like this.
Speaker 11: What happens if we retreat? What happens is you'll leave us space, and that space will be filled by someone else. The only nations right now that can-
Michael: Music bursting in the back ground, the glory of America and you've got a very positive portrayal of Marco Rubio.
Laura: Michael Beckel is another political reporter at the Center for Public Integrity.
Speaker 13: Learn more at Conservative Solutions Project dot com.
Michael: It's mystery where Conservative Solutions Project money is coming from, and it will remain a mystery for most, if not all, of the election season.
Laura: Conservative Solutions Project is another kind of outside group called a political nonprofit, a 501(c)(4).
Michael: There's basically no paper trail. If it's an ad sponsored by a super PAC, you're going to be able to see who is behind it. You're going to see the names of the top donors, you're going to see who is really creating this and how much money is being spent on this. If it's an ad run by a nonprofit group, very limited information is publicly available.
[00:10:00]
Laura:
 

That's why political nonprofits are often called dark money groups. They can raise unlimited amounts, and legally, they never have to disclose who is giving them money. Do we have any idea how much money they have?

Michael: They put out a press release last year saying that they had raised about sixteen million dollars.
Laura: They've spent at least eight point five million on pro Rubio ads so far.
Michael: Marco Rubio is in a very unique situation. Most candidates haven't seen a single candidate nonprofit group pop up.
Laura: This is the first presidential election where one dark money group is pushing one candidate so aggressively. That's an issue because the whole purpose of these 501(c)(4) groups is that they're supposed to advocate for issues. They can't exist just to push one candidate. Some watchdog groups say Conservative Solutions Project has already crossed that line, but the group protects itself. Marco Rubio appears in their ads, but the ads never say the words, "vote for Marco Rubio".
Michael: Those few words are very important. The few words that are missing allow lawyers to make a case to the IRS that this is part of their issue advocacy.
Laura: They make that case, so the groups can keep their tax exempt status as nonprofits and spend as much money as they like. Even when there is a challenge, it takes years for the IRS to investigate. Conservative Solutions Project's ads for Marco Rubio have already run. They've already been seen by voters, they've already done their job.
Al: Laura, here's what I'm wondering. Why should we, the people whose living rooms are being flooded with these political ads, who [care 00:11:50] who pay for them? Does that actually affect the way you think about a candidate or an ad if you know who's paying for it?
Laura:
[00:12:00]
Al, if you want to answer that question, you have to think about that little disclaimer at the end of an ad.
Al: Okay.
Laura: Paid for by Stand For Truth Inc. or Priorities USA. That names of the outside group will be the only clue most people get about who's behind an ad. If you start paying attention, you'll notice that all those names seem to have something in common.
Al: That is?
Laura: To find out, we have to play the super PAC name game.
Speaker 14: The super PAC name game.
Laura: I'm going to name a super PAC, and you try to guess its political leanings, liberal or conservative.
Al: All right. Let's do it, let's do it. I'm ready.
Laura: Okay. Our Principles.
Al: Liberal.
Laura: Wrong. Conservative. Keep the Promise.
Al: Definitely a Conservative.
Laura: Correct. Ding, ding, ding. Ted Cruz. Priorities USA.
Al: Priorities USA. Priorities USA. I'm going to give this to the right.
Laura: No, it's Hillary Clinton.
Al: All right, all right, all right. Come on, come on, come on. Let's keep my averages up, let's go.
Laura: All right. Let's mix it up here.
Al: Bring it.
Laura: Right to Rise.
Al: Liberal.
Laura: Conservative. Jeb Bush.
Al: Really? I thought that was a Bernie thing, like Bernie has the right to rise.
Laura: All right. Protect Our Future.
Al: Liberal.
Laura: Totally fake.
Al: Really? Laura.
Laura: Okay. You did pretty good, Al. You put in a good effort.
Al: Thank you very much.
Laura: Thanks Al.
Al: That was Reveal's Laura Starecheski, and she'll be joining us a little bit later in the show. Clearly, it's hard to tell the political affiliation of these super PACs by their names alone. That's something political scientist, Johanna Dunaway, has been looking into.
Johanna: They're sort of deliberately not upfront about who they are. They choose these friendly sounding names so they can come in and just sound like, "Oh well, our main purpose is really just to help society."
Al:
[00:14:00]
Would those friendly sounding names actually sway voters? Do people even notice who pays for an ad? To find out, Dunaway created an experiment. She asked about four hundred people to-
Section 1 of 3          [00:00:00 - 00:14:04]
Section 2 of 3          [00:14:00 - 00:28:04] (NOTE: speaker names may be different in each section)
Al Letson: To find out, Dunaway created an experiment. She asked about 400 people to watch a political ad. What each person saw was the same, at first.
Speaker 2: It's happening right now, in your neighborhood. A generation of young people is in danger. Violence and drugs [crosstalk 00:14:16].
Al Letson: The ad was fake, but Dunaway tried to make it as real as possible. He accused one candidate of being soft on crime, and encouraged you to elect the other guy.
Speaker 2: America deserves better. Vote Dave Reed for Congress.
Johanna: The only thing we changed was the small disclaimer at the end of the ad, that said "Paid for by."
Speaker 2: Paid for by the campaign to elect Dave Reed. Paid for by the Nation Rifle Association. Paid for by the Citizens For A Safer America.
Al Letson: That was the only difference, the disclaimer at the end. Here's what's amazing. The ad paid for by Citizens For A Safer America, the group with a super-PAC-like name, was the one people found the most credible, with one exception, people who already liked the NRA trusted their ads the most. Everyone else trusted the vaguely named group. Dunaway calls this the persuasive power of ambiguity.
Johanna: If you can't assign a motive, then I think people are going to at least treat your message or what you're trying to say as baseline credible.
Al Letson: People don't trust the ad paid for by a candidate because in general, we think we know what politicians' motives are and we don't trust them. We know that they put ads out designed to help them win, but that's not how we think of groups we've never heard of before.
Johanna: That friendly-sounding, anonymous name really does allow the message to seep in, because people don't have a reason to instantly have their guard up, because they don't know anything about you, and sure, your name sounds friendly.
Al Letson: Persuasion by absence of red flags.
Johanna: Yeah, by absence of information, or absence of reputation, maybe that's the better way to put it.
[00:16:00]
Al Letson:
 

That was Johanna Dunaway from Texas A&M University. With so many outside groups airing so many ads, over 100,000 so far, it's harder than ever for voters to cut through all the noise. When we com back, we'll keep following the money trail, taking a look at some of the biggest political donors, and what they're after might surprise you. This is Reveal, from the Center For Investigative Reporting and PRX.

Starecheski: Hi, it's Reveal's Laura Starecheski again. If you want to play the Super PAC Name Game yourself, you can. We created a quiz so you can test your election savvy. Just head to RevealNews.org/SuperQuiz and see if you can guess which super PACs are liberal and which are conservative. That's RevealNews.org/SuperQuiz. Have fun.
Al Letson: From the Center For Investigative Reporting and PRX, this is Reveal. I'm Al Letson. We've told you that this is going to be the most expensive election in American history, but what we haven't said is there's a small group of very wealthy families behind much of that money. About half of the $400,000,000 that flowed into this year's election early on came from just 158 families in the whole country. I'm here with John Dunbar from the Center For Public Integrity, who's joining us throughout the show. John, tell me a little bit about who these families are.
John: They're rich. They're really rich, like billionaire rich. The really big money that's gone into the super PACs has come mostly from a bunch of older conservative white guys.
Al Letson: We're talking about old money here, right?
John: Not necessarily. A lot of these guys have actually built their fortunes themselves.
Al Letson: How'd they make their money?
John: We've seen a lot of hedge fund managers and insurance executive, we've seen some oil and gas magnets, but also we're seeing some new big donors that we hadn't seen in the last presidential election.
[00:18:00]
Al Letson:
 

Who are these new big donors and how much money are we talking here?

John: The families who have given the largest donations are supporting Ted Cruz, the libertarian candidate from Texas. The guys who stand out the most are brothers, Farris and Dan Wilks. These guys are billionaires. They made their money in the fracking business. They come from a little town in Texas called Cisco. Together they gave $15,000,000 to a super PAC that's backing Cruz.
Al Letson: $15,000,000 for one candidate?
John: Yeah, they're a new breed. They're playing a big role in the split that we're seeing now in the GOP, because they're supporting Cruz, who's an outsider. He's not really part of the party establishment, in a way like Trump is outside the establishment.
Al Letson: Thanks, John. Let's dive into the Wilks brothers. They are extremely media-shy, so we sent Laura Starecheski to their hometown, Cisco, to find out more about them, and not just their hometown, but straight to Farris Wilks's church.
Starecheski: About 10 miles outside of Cisco, the Assembly of Yahweh 7th Day Church stands out in an empty landscape. The Wilks family built this church, and Farris, the older brother, is the pastor here. I was hoping to talk to his parishioners. Excuse me, sir. Excuse me, ma'am. Ma'am. I tried for a couple hours to flag down people coming in and out of church. I got a lot of friendly waves from behind rolled-up truck windows, but almost nobody stopped.
Speaker 6: Hi.
Starecheski: Hi. Any chance you'd be willing to talk a little bit about the church?
Speaker 6: No thank you. Have a good day though.
Starecheski: Take care. Eventually, associate pastor James King came out to the side of the road. I think he felt bad for me.
James: Do you need any water or tea or ...
Starecheski: I'm okay for now. As far as coming inside, that was not allowed.
[00:20:00]
James:
 

We allow guests in all the time, but we have made the decision that no media are going to be allowed anymore. I really hope you understand. I'm sorry about that.

Starecheski: Who made that decision?
James: That was Farris and I.
Starecheski: Farris Wilks and James King made the decision because of an article a Daily Beast reporter wrote after attending a service. Her headline called the church anti-gay, but then some news aggregate re-posted her story on Facebook and gave it a new headline, "Gay-hating pastor," next to a photo of Farris Wilks.
James: It represented specifically our pastor as hateful and a lot of the members took offense to that.
Starecheski: Now James says he and Farris want the 200-some church members to focus on worshiping, with no microphones or cameras. He did fill me in on a few basics about the Assembly of Yahweh.
James: Most people hear the name of our church and think it's a little strange, but it goes back to that wanting to get back to a pure religion.
Starecheski: That search for a pure religion goes back to the Wilks brothers' father, Voy Wilks, who founded this church in the 1950s. Their beliefs come from a literal reading of the Bible, which leads to a blend of evangelical Christianity and Judaism. They celebrate the Jewish feasts and holidays like Passover, not traditional Christian ones, and they worship on Saturdays instead of Sundays.
Farris: Good afternoon.
Starecheski: I could not attend the service, but I found some recordings of Farris Wilks preaching from the pulpit.
Farris: Hope y'all are having a wonderful day so far. Hope I don't do something to mess it up.
Starecheski: In between long sections on specific Bible verses, Farris makes his views plain in a slow, low-key way.
Farris: One of the great sins of our nation is abortion. Marriage being one man and one woman, that has to be part of what we stand for and what we believe.
[00:22:00]
Starecheski:
 

To Farris, the so-called gay agenda is part of an attack on Christianity and traditional family values.

Farris: Do understand that there is a war going on out there, and they're after the minds of your children and your grandchildren.
Starecheski: These aren't just views Farris preaches to his congregation, they're causes he and his brother, Dan, have put big money behind. They've given millions to anti-abortion, anti-gay organizations like Focus On the Family. They've also shaped life here in Cisco. Pretty much everyone I talked to knew the Wilks.
Matt Horner: How's it going?
Starecheski: Hi there. I met barber Matt Horner at his shop on the main drag down the block from one of Cisco's two traffic lights.
Matt Horner: You'll see this Chinese restaurant right here, you'll see a Ferrari or a Lamborghini pull up and they're eating in here or they come in here for haircuts. My wife saw them at the Denny's the other night, Farris and Joann Wilks at Denny's.
Starecheski: They're simple people with humble roots. That's what I kept hearing. Pam [Craybill 00:22:59] was playing canasta with some friends on a Friday night at the town's community center, which the Wilks built. Pam said between that and the new baseball field, she didn't know where Cisco would be without them.
Pam: They've just done a lot. I think they're probably the reason that the town is starting to clean up a little bit. I just wish they'd do something about the streets. We've got potholes that will eat a car alive.
Starecheski: The potholes, the boarded-up buildings, it's clear Cisco is hurting, and this also has something to do with the Wilks. The fracking company they founded called Frac Tech was originally based here in Cisco. The brothers sold their stakes in 2011 for over $3,000,000,000. The new owners closed the Cisco plant just this winter. I went out to the Frac Tech facility-
Speaker 11: Hey there.
Starecheski: ... where I ran into Deputy Sheriff Wendell Light. He moonlights working security for the Wilks, circling the deserted plant in his pickup truck and Ray-Bans.
Wendell: Everybody's just down and out, because they supplied lots of job and lots of income. If you have one income for one man that works here, he has family he feeds with that money, and so it affects lots of people.
Starecheski: When the plant closed, almost 100 jobs were lost. That's a big hit a town of 3,900. The Wilks seem to be pretty much the only people in town who came out ahead after the fracking money dried up.
Wendell: They did good. They got in the fracking business at the right time, got out of it at the right time. They made a good home run out of this place.
Starecheski: That home run was what launched the Wilks's bold entrance into national politics as huge donors to Ted Cruz. They gave $15,000,000 to a pro-Cruz super PAC. Farris has also poured hundreds of thousands into Texas state races this year. Mark Jones at Rice University in Houston researches Texas politics.
Mark: The Wilks brothers alone can affect the balance of power in a way that no one on the establishment side is willing to do right now, or in some cases has the resources to do.
Starecheski: Jones says the Wilks are strengthening the split in the Republican party between the establishment and newly powerful conservatives like Cruz. Plus he says the Wilks brothers have a different reason for giving than mainstream donors, who are usually hoping for financial benefits like tax breaks.
Mark: The Wilks brothers really are not donating to further their economic interest. Rather, they're giving money primarily to candidates that share their worldview or their political vision for the United States. In many ways, Ted Cruz is the perfect presidential candidate for them, because he combines a strong support for liberty and a limited government, with also support for social conservative values.
Starecheski:
[00:26:00]
Like fighting gay marriage and rolling back abortion rights. Farris's family foundation has given millions to beef up a whole network of evangelical activist groups. It's given at least $1,000,000 to Liberty Council, a Christian law firm. Founder Matt Staver says since the Wilks's donation, he's become close with the family.
Matt Staver: I wish America had more families like this that are concerned about the well-being of our country and are willing to share the resources that they have to help benefit others and this country.
Starecheski: You might recognize Matt Staver's name. In 2015, he represented the Kentucky county clerk who refused to issue same-sex marriage licenses. He's also defending the anti-abortion activists who made the Stealth Planned Parenthood videos. The danger for America, Staver says, comes in not mixing faith and politics.
Matt Staver: That's how the country began, it was faith and politics. George Washington said that the twin pillars of America were religion and morality and we couldn't continue to survive if we labored to undermine those twin pillars.
Starecheski: Religion and morality are what drew the Wilks brothers to Ted Cruz. If he turns out not to be electable, Staver says, they aren't afraid to change course.
Matt Staver: It's like looking at a pitcher in a baseball game, and if one pitcher is doing well, they're going to stand behind that pitcher, but if that pitcher's no going so well and there's another one that needs to come in to win the World Series, they're going to stand behind that person too, and they're going to make the difficult decision.
Starecheski: The Wilks are committed to a cause, not a person.
Al Letson:

 

[00:28:00]

That's Reveal's Laura Starecheski. As of this broadcast, Ted Cruz is catching up to Republican front-runner Donald Trump. His super PACs still have about $25,000,000 left in the bank to keep him in the race, so what about Democratic king makers? Everybody's heard of George Soros, but there's this other guy, Tom Steyer, doing something a little different. He was a billionaire hedge fund manager, the head of a global investment firm.
Section 2 of 3          [00:14:00 - 00:28:04]
Section 3 of 3          [00:28:00 - 00:51:54] (NOTE: speaker names may be different in each section)
Al Letson: He was a billionaire hedge-fund manager, the head of a global investment firm, but in 2012 he stepped down to become a full-time environmental activist. He's the founder of Next Generation Climate, which combines grassroots organizing with big money contributions to campaigns. We turned to Wilson Sayre, a political reporter in Miami with WLRN, and asked her to take us through the intricate dance between cash, candidates, and environmentalists taking place in Florida right now.
Wilson Sayre: About 20 minutes south of downtown Miami, Black Point Marina jets out into Biscayne Bay. A path takes you onto the skinny little jetty surrounded by water.
Esteban Castro: That was like 2 weeks ago. There's a hidden trail back here that I take with my friends and my dog and everything, and which leads to Biscayne Bay. I'm the only one like out there, for like 2 miles.
Wilson Sayre: Esteban Castro is a student at Florida International University. He's showing me one of his favorite spots.
Esteban Castro: It's a beautiful little secluded location, and I was like, "Wow, I've taken family members, taken friends, and I would like to take my future children there," but honestly, it hit home when I realized that 15, 20 years from now, even then I won't be able to show them.
Female: That's because rising sea levels are threatening low-lying areas in South Florida. It gets a lot of media attention down here.
Female: Fish taking to the streets in one South Florida neighborhood.
Female: Indian Creek Drive out here filling up with water.
Male: Another night of tidal flooding on Miami Beach, but not as bad ...
Wilson Sayre: All of this has led some people, like Esteban, to sign on as volunteers with a group called NextGen Climate. Here's one of their ads.
Male: America's never been a country of quitters. It's not who we are. We don't ignore threats like climate change. We face our problems head on. With American ...
[00:30:00]
Wilson Sayre:
 

NextGen is trying to make climate change a bigger part of our national conversation.

Esteban Castro: ... and you have most clean energy ...
Wilson Sayre: As a volunteer, Esteban goes out on campus and catches students on their way to class. He tries to get them signed up to support NextGen's 50by30 initiative.
Esteban Castro: With NextGen, we have a specific plan to switch the United States to 50% clean energy by the year 2030. We are trying to push our politicians to make the changes that would need to happen to save the earth, honestly, because we want to [do 00:30:13] that. Especially Miami, dude.
Wilson Sayre: Today, Esteban's talking to a student named Derick Colas.
Esteban Castro: We're on the biggest threat to be like underwater this year. [This 00:30:20], no, no, no, no ...
Derick Colas: Yeah, I know.
Esteban Castro: Yeah, it's crazy, man.
Derick Colas: We're already under sea level, so ...
Wilson Sayre: Derek fills in his name on a roster. Then he ticks a box that says he'll vote in elections. This is an important part of NextGen's strategy.
Esteban Castro: By me having them sign up and putting information down, that's kind of the first step in getting their personal momentum going.
Wilson Sayre: The next step is having people support candidates who advocate climate solutions, especially NextGen's; and for the most part, this means Democratic candidates.
Bernie Sanders: Climate change is real, and we have a moral responsibility to transform our energy system.
Hillary Clinton: The United States will then lead in dealing with the very real problems of climate change.
Wilson Sayre: Both Bernie Sanders and Hillary Clinton have said something needs to be done about climate change, but only Clinton has signed on with NextGen's pledge of powering America with 50% clean energy by 2030. NextGen hasn't endorsed her yet. Last year, Tom Steyer and his wife hosted a fundraiser for her in their house in San Francisco, $2,700 per person; but for the most part, instead of directly contributing to campaigns, Steyer uses his organization to sway elections.
 

 

[00:32:00]

In 2015, Steyer put at least $13 million into his super PAC, NextGen Climate Action Committee; and there's also NextGen Climate Action, a 501(c)(4) nonprofit. It doesn't have to disclose its donors or specifically how it spends its money. It's one of those dark money organizations. Now, these groups have separate finances, but clearly there's some cross-pollination. Take a listen, for example, to this ad, paid for by NextGen Climate Action, the nonprofit.
Female: The pollutants that cause climate change also pose great risk to our health. We must use science to inform our policy decisions. It's the responsibility of all of us and our government to protect our collective health.
Wilson Sayre: Now this ad, paid for by NextGen Climate Action Committee, the super PAC.
Male: Climate change puts men and women in uniform at risk in ways we've never had to consider before; so the Department of Defense has classified climate change as a threat multiplier that destabilizes already unstable parts of the globe.
Wilson Sayre: Yeah. They sound and look and feel almost identical. Same music, same tone. Online, they use the same graphics, and the 2 groups share a website. There aren't any rules saying they're not supposed to do this, but remember, (c)(4)s don't have to disclose their donors like super PACs do. I sent an email to a spokesperson with NextGen's national operations, with some questions about how they maintain transparency with the nonprofit. NextGen spokesperson Susan Henkels didn't answer that question. She just said the setup allows the organization to be more effective.
How is NextGen effective? Campaigns and outside organizations like NextGen's aren't supposed to coordinate with each other directly, but there are some ways they do help each other out, and it's a silent tango.
Suzanne Robbins: The general courting that goes on between candidates and organizations.
Wilson Sayre: Suzanne Robbins teaches political science at the University of Florida, and specializes in campaign finance. She says in some ways, NextGen isn't all that unique.
Suzanne Robbins: Groups are getting more and more active in this type of activity.
Wilson Sayre:

 

[00:34:00]

Here's what she says is new. Some issue-based groups like NextGen have changed tactics. Instead of just trying to be heard and influence the debate, they're getting directly involved in election activity. Here's how it works for NextGen. For this election cycle, the group started up its Florida operations in April of 2015. It's built up a pretty robust network of people across the state who are talking a lot about the election and the environment; but for now, it doesn't bring up specific candidates.
Jackie Lee: We're not here to say who you should vote for.
Wilson Sayre: Jackie Lee is director of NextGen Climate in Florida.
Jackie Lee: It's a matter of bringing the issue up and making sure candidates understand that they have to address it, and now come out with clear plans, and that voters demand clear plans for 50by30.
Wilson Sayre: ... but if NextGen does endorse Hillary Clinton, she stands to benefit from the power of NextGen and their campaign, along with the network it's set up over the past several months; and since Clinton campaign staffers only showed up in force in mid-February, it's safe to assume she could really use this extended network.
Jackie Lee: What she gets is sort of an endorsement that says, "I'm the environmental candidate," so for people where climate change, rising sea level issues, and the environment more generally, it signals that this is a candidate that other groups find acceptable and in fact desirable; so it acts as somewhat of an endorsement of her candidacy.
Wilson Sayre: Even if they're not running ads directly in support of her. It's not a quid pro quo, but it's the same type of winking and helping without touching that these sort of outside organizations do with growing frequency. More and more groups set up just like NextGen, with a nonprofit and a super PAC, are doing this. It's about using every tool in the toolbox, and for NextGen, this 50by30 initiative is the litmus test for the candidates to figure out where to employ these tools. Those who pass don't necessarily get direct payment, but NextGen might help a candidate get votes; and in the end, isn't that what races are all about?
Al Letson:

[00:36:00]

That's Wilson Sayre of WLRN in Miami. In the interest of full disclosure, we should mention that we've received funding from the Tomkat Charitable Trust, which was established by Tom Steyer and his wife, Kat Taylor. If you think super PACs are just for big, nation-wide elections, think again. It turns out, they're also getting involved in local races, and bringing plenty of cash to the game. We'll be back in a minute for that part of the story on Reveal, from the Center for Investigative Reporting and PRX.
Meghann: Hey, folks. It's Meghann Farnsworth from Reveal. We strive to bring you the best possible hour of investigative reporting every week; but what do you think about the show? How are we doing? We want to know; so do us a quick favor, visit surveynerds.com/reveal, and tell us more about yourself. It'll take less than 2 minutes, I promise, and your feedback will go a long way. That link again: Surveynerds.com/reveal.
Al Letson: I'm Al Letson, and this is Reveal. Today, we're talking about money in politics, the incredible amounts flowing this year, and what that money pays for; so far, we've been focusing mostly on the presidential race, but there's a lot of money pouring into local races. Mayoral contests, school board races, even council primaries. In these small races, a little bit of money goes a long way. Patrick Madden's an investigative reporter at WAMU in Washington, DC. He's looked into a couple city elections where there was an influx of mysterious money.
Male: Thank you. Mr. Lake.
Male: Thank you very much. I am, I saw a couple of [crosstalk 00:37:29]
Patrick Madden: The seed, a run-of-the-mill legislative hearing. A wooden dais, bad lighting, a handful of lawmakers, lobbyists, and staff, milling around.
Chairman: Thank you, Councilmember Nadeau.
Patrick Madden: We're in Washington DC. Not the U.S. capital, but about a mile down Pennsylvania Avenue. It's here, at the DC Council Chambers, where lawmakers tackle life's more nitty-gritty details: Garbage pickups, parking meter rates, potholes.
[00:38:00]
Male:
 

The project in question is public land.

Patrick Madden: This hearing is over a parking lot that's being sold off to private developers at a discount. It's pretty normal stuff. Except it doesn't go according to script.
Mary Cheh: Public records show that you donated $10,000 to the mayor's quote-unquote "FreshPAC," which is this [super PAC 00:38:20]
Patrick Madden: Councilmember Mary Cheh starts questioning one of the developers.
Mary Cheh: ... the whole of their campaign? Is that correct, you gave $10,000 ...
Buwa Binitie: That is correct.
Mary Cheh: ... and you are doing business with the city at the same time. Right?
Buwa Binitie: Yes.
Mary Cheh: Yes. Okay, and then also ...
Patrick Madden: The FreshPAC scandal erupted last fall in DC. I'd gotten a tip about the group's existence, and looked through campaign finance filings for the city. There they were. It turns out some close associates of Mayor Muriel Bowser had found a loophole. Normally, there are limits on how much you can give to a political action committee, or a PAC, but a small change in city law allowed PACs to raise unlimited donations during non-election years. It essentially turned them into super PACs, which have no limits on contributions; so the mayor's friends put together FreshPAC and started collecting money from people, like this developer.
Mary Cheh: Who asked you to give $10,000, which is 5 times the amount in an ordinary election year you could give to a mayoral candidate, and far more than, way more than the $500 you could give to a board council member? Who asked you to give that money?
Buwa Binitie: I don't recall. I can't disclose [this 00:39:36].
Patrick Madden:

 

[00:40:00]

The developer, Buwa Binitie, admitted giving the money, but wouldn't name names. I started looking at everyone connected to the group. FreshPAC's treasure also served as the mayor's campaign treasure, and going through contracting records and campaign finance reports, I found that a number of the group's donors had received millions of dollars in city contracts. Others had been appointed by the mayor to sit on powerful boards and commissions. Councilmember Mary Cheh was livid.
Mary Cheh: The money was being sought from people who were then doing business with our government. I was stunned by the audacity of it. I think it put right there in front of the public what I would have considered sleaze.
Patrick Madden: Not only that. As a critic of the mayor, the councilwoman was a potential target of FreshPAC. The group had raised several hundred thousand dollars, and hoped to raise more, up to a million dollars; but public outcry over FreshPAC was growing, and late one night, as Mayor Bowser was travelling overseas, organizers announced the group was shutting down. The money was returned to donors. Even its name was an embarrassment. The mayor had run for office promising a fresh start to scandal-plagued DC. During a talk show interview, she told listeners she didn't do anything wrong or out of the ordinary.
Muriel Bowser: I don't think I look like a hypocrite at all, having a PAC. We know, if you look at any state across the nation, and you look at congressional seats that political leaders have PACs.
Patrick Madden: She's right, but FreshPAC was raising lots more than a mere PAC could; and this flood of big money political contributions is changing local politics around the country. Campaign finance experts say it was just a matter of time.
Edwin Bender: Because local-level races are generally very inexpensive.
Patrick Madden: Edwin Bender heads the National Institute on Money in State Politics. Ever since the Supreme Court Citizens United decision, there are no limits on how much money people can give to super PACs.
Edwin Bender: The super PAC can come in and dump a million dollars, and have an outsized impact on a local race.
Patrick Madden:
[00:42:00]
That investment can pay off. Local lawmakers are often in charge of millions of dollars in city contracts, and real estate deals.
Edwin Bender: The economic incentive for builders, contractors at the local level, to form a super PAC, to get their friends elected, and to also then have a friendly ear when it comes time to contract is absolutely an incentive to form a super PAC, and one of the reasons why there probably will be a great proliferation of them.
Patrick Madden: From a big-city mayoral contest in Philadelphia to council elections in Dallas, super PACs are already starting to influence local races around the country, and when they do show up in local races, voters are often left searching for answers. I make the drive up I-95, and then the New Jersey turnpike to the town of Parsippany. It's a small bedroom community, less than an hour's drive from Manhattan. I meet Roy Messmer, a local activist, in a parking lot next to town hall. Hey, Roy, how are you?
Roy Messmer: Good. [crosstalk 00:43:04]
Patrick Madden: Last spring, a mysterious super PAC got involved in the local council primary. Messmer pulls out a campaign flyer, one of several that were dropped off at the homes of Republican voters. This one, this is an attack ad.
Roy Messmer: Yes, that's an attack ad, sir.
Patrick Madden: This lists sort of these accusations here, abuse of power, stolen records.
Roy Messmer: Right.
Patrick Madden: The nasty flyer targeted one of the council members up for reelection. The flyers looked pricey and professional, but on an another one, there was a small mistake.
Roy Messmer: This is a sitting councilman for over 20 years. I think 27, to be exact.
Patrick Madden: They misspelled his name.
Roy Messmer: Misspelled. Boom. Boom, and on the back. I caught this immediately.
Patrick Madden: The man's name was misspelled. The name of the group was at the bottom.
Roy Messmer: New Jersey Future First.
Patrick Madden:
[00:44:00]
At first, people were stumped. New Jersey's Future First wasn't on file with the state or federal election commissions, and the flyers listed a Washington DC address.
Roy Messmer: Why is somebody coming to Parsippany spending this kind of money? You're talking about a town of a population about 55,000. You just say to yourself, "What's going on?"
Patrick Madden: Back to DC to find out. You couldn't be closer to Congress than where we are right now. Just at 100 feet from where the U.S. capital starts, and here it is. Jennifer May was listed as New Jersey's Future First treasurer. I had tried calling and emailing her, and got no answer, so I showed up in person.
Female: Hello?
Patrick Madden: Oh, hi. I'm trying to reach Jennifer May.
Female: She's ... You can come on up. Third floor.
Patrick Madden: Thank you. When I got to Jennifer's office on the third floor, the sign on the door read, "Next Level Partners," which turned out to be what's called a compliance firm. They do the paperwork for federal super PACs and other campaigns. There are dozens of companies like this on Capitol Hill. Super PACs are an industry in DC. When I walked in, Jennifer said she didn't want to talk about the super PAC in Parsippany. You've helped, I guess, set that up, or at least handled the compliance for that.
Jennifer May: It's kind of like, would you talk to your accountant, like would someone call your accountant about your personal tax return? No, so I just don't feel comfortable talking about this stuff, because you would need to call the entity where I'm the accountant.
Patrick Madden:

[00:46:00]

All right, so she didn't want to talk. As she put it, she's there just to make sure everything is in working order. She's not really in charge of the PAC, so the trail, I guess, goes back to New Jersey now. First stop, Trenton, the state capital, where Jeff Brindle leads New Jersey's Election Law Enforcement Commission.
Jeff Brindle: We don't have a law which requires groups that are simply spending independently to register or to disclose their activities with us.
Patrick Madden: Let me get this straight. This super PAC that came into this local council race in a township of New Jersey, they didn't have to disclose who their donors were?
Jeff Brindle: No. Under the law, they were not required.
Patrick Madden: Most cities and states have strict campaign finance limits. Some even go a step further with so-called pay-to-play laws. New Jersey says government contractors can't donate more than $300, but these restrictions don't apply to super PACs.
Jeff Brindle: I don't think there's any question about it. We're seeing more and more contractor money going to independent groups and PACs, because they're not included under the pay-to-play law.
Patrick Madden: A few days before the primary in Parsippany, the donors behind New Jersey's Future First were finally unmasked. IRS filings show it was mostly funded by 2 New Jersey companies with large contracts with the town. One was an insurance company. The other, an engineering firm. The super PAC sent me a statement. They wouldn't comment on the Parsippany race, but said they were founded by New Jersey businesspeople who were concerned about partisan gridlock, and wanted their voices heard. Paul Carifi Jr. was the council member targeted by the super PAC's negative flyers.
Paul Carifi: There were a lot of lies in these mailers, and they were just pumping these things out every couple days.
Patrick Madden: He'd been critical of the town's contract with the insurance company.
Paul Carifi: For these people to donate the amount of money that they were, 40, 50, 60 thousand dollars, is nothing to them, with the amount of money that they're making from our town.
[00:48:00]
Patrick Madden:
 

He won the primary, though it was close, 14 votes. After the election, he had a message for the contractors who funded the group.

Paul Carifi: I wish these people that donated to this PAC would have spent their money more wisely, maybe on cancer research, because they wasted almost $200,000 trying to get rid of me, and it didn't work.
Patrick Madden: Not every investment pans out. Super PACs don't always decide the winner; but for companies and contractors, it's a risk many are willing to take.
Al Letson: Patrick Madden is an investigative reporter at WAMU in Washington, DC. I'm going to bring back John Dunbar from the Center for Public Integrity, and John, this whole hour, I've been wondering just this one thing, and that is: What difference does it make? I mean, you look at Jeb Bush, whose super PAC raised an ungodly amount of money.
John Dunbar: Yeah. Way more than $100 million.
Al Letson: Even that did not give him the nomination.
John Dunbar: A lot of it, I think, has to do with the candidate, at least in this case. Jeb just happened to walk into an election as an establishment choice in an anti-establishment environment, and he had a slow start, and he really didn't hit his stride until it was too late. I also think it's worth remembering that it's awful early. We're talking about hundreds of millions of dollars, and the amounts are only increasing. Somebody thinks they're getting something for their money, that's for sure. Otherwise, they wouldn't keep dumping it into these races. I think when a big donor doesn't get what they want, it's more an exception to the rule, and I think they're still figuring out the best way to spend their money.
Al Letson: Citizens United has been made into the big bogeyman and all this. Do you see it like that, or is it more nuanced?
John Dunbar: Well, the Supreme Court is basically saying that money is speech, and if I've got more money than you, well, I got more speech, or at least I got a bigger bullhorn. A lot of people find that troublesome.
Al Letson: I guess the question I have is, if you disagree with Citizens United, then what can be done? How is this ever going to change?
[00:50:00]
John Dunbar:
 

Well, the first and most obvious route would be to pass an amendment to the Constitution, but that's really, really hard to do. I mean, remember the Equal Rights Amendment? Well, they still haven't passed that. The other route is to get the Supreme Court to reverse itself, and that doesn't happen very often either. However, with the passing of Justice Scalia, the possibility of a reversal is a little bit greater, but right now, there are no cases in the pipeline.

Al Letson: John, that just sounds so, I don't know, rare and limited. Is there any other way this could happen?
John Dunbar: Yeah. What we need is a scandal, a big one. I'm actually serious about that. That's what happened in Watergate, and that's what happened in the soft money scandals in the late '90s and the early 2000s that resulted in the McCain–Feingold legislation, but unfortunately it's a heck of a thing, but we don't see major change in this country until we see major crisis.
Al Letson: All right, John, well, I guess we'll just have to wait for the next scandal. That's John Dunbar from the Center for Public Integrity. Laura Starecheski was our lead producer on today's show. Deb George was the senior editor. We had a lot of help from WAMU and WLRN, and the political reporting team at the Center for Public Integrity. Special thanks to Peter Montgomery at People For the American Way, who helped us get ahold of the recording of Farris Wilks' sermons. Our theme music is by Camerado-Lightning. Support for Reveal is provided by the Reva and David Logan Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the John S. and James L. Knight Foundation, and the Ethics and Excellence in Journalism Foundation. Reveal is a co-production of the Center for Investigative Reporting and PRX. I'm Al Letson, and remember, there is always more to the story.
Section 3 of 3          [00:28:00 - 00:51:54]

Get the Weekly Reveal newsletter

Don’t miss out on the next big story. Sign up today.