Independent Expenditures: The New Money in California Politics   
By Mike Polyakov on Oct 18, 2012

Note: Our interactive flow chart visualization summarizes the flow of money for some of the biggest players and expenditures.

Money fuels politics.  Traditionally, political supporters and special interests channeled money to candidates and their parties as direct contributions and lobbying.  But since the first campaign contribution limits were enacted in the 1970s, political money has increasingly taken the form of so-called “Independent Expenditures” (IEs), political campaign spending that is not coordinated with a candidate’s official campaign. 

Though IEs have only received significant national attention in the wake of the U.S. Supreme Court’s Citizens United v. FEC ruling in 2010, they have been a growing factor in California politics since Proposition 34 (2000) limited direct contributions to candidates.  In that time, total independent expenditures in legislative races have increased by a factor of 60, and those in statewide candidate elections by a factor of 55. In the 2010 election alone, over $80 million was spent independently on political campaigns.

This report examines the $220 million in independent expenditures spent on candidate races in California between 2000 and late May 2012, focusing on the 106 organizations and committees that spent all but $25 million of it. We dissected the races that attracted the most money, the groups who spent it, and their donors.

We identify a dramatic increase in IEs from the 2000-02 to 2004-06 election cycles and a substantial increase between the 2004-06 and 2008-10 cycles. We also find that labor unions are the largest source of independent spending, focusing primarily on governor’s races. Labor-backed committees spent nearly 50% of all IEs and unions made 75% of all donations to IE committees larger than $1 million. Business-backed and political committees each spent 12.5% of IEs. Finally, the report identifies a number of inadequacies in the current IE disclosure and publication system.

Other specific findings include the following:

  • Fewer Donors, Larger Donations. In 2010 alone, approximately 100,000 groups and individuals donated more than $550 million directly to candidates in 2010 (excluding self-funding by candidates), with a $250 median contribution. But since 2000, fewer than 6,000 groups and individuals donated $573 million to IE committees that spent the most on candidate elections, with a $5,000 median contribution.
  • Union-Backed Committees Outspend. Spending over $90 million, union-backed IE committees spent three times more than their nearest competitors (business and business-backed committees, $27.7 million, and political committees, $27.5 million). Labor-backed committees spent nearly 50% of all IEs and unions made 75% of all donations to IE committees larger than $1 million. 
  • Governor is Top Target. Since 2000, the Governor’s seat was the target of $76 million in independent spending, drawing almost 40% of all IEs. Unions allocated almost two-thirds of their independent expenditures ($56 million) to governor’s races.
  • Corporations Rank Lower. Chevron, the largest corporate contributor to IE committees, ranks 28th among all donors. Seven unions are among the top ten.

We conclude with a discussion of how the state can effectively balance the freedom to engage in political speech and the inherent benefit in providing the electorate with information about the sources of funding of political speech. We recommend several reforms that would enable the state to deliver accurate and usable information to the public, increase transparency, and improve enforcement of campaign finance violations. Those recommendations include redesigning the state’s current disclosure website, requiring an accountable principal officer for IE committees, and requiring more stringent disclosure to help voters identify original sources of political funding.

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