Third-party money that poured into the midterm election cycle may have just been a preview of the fallout from the Supreme Court decision that struck down campaign finance limits.



The ultimate impact of the Citizens United decision hasn’t been fully realized, observers say, despite the record amounts of outside money spent in the 2010 election, and spending is predicted to be even more extreme in the 2012 elections.





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Most observers say the midterms laid the groundwork for the way corporations and outside groups will operate in the new campaign finance environment, but the die is hardly cast."A number of us thought this would ultimately take a couple of cycles to really play itself out, and I think that's still the case," said Robert Lenhard, a Democratic finance lawyer and former chairman of the Federal Election Commission. "But what you did see this year were some people beginning to test the waters."There's no doubt that some of the early worries candidates and campaigns had about the decision's impact played out this past fall -- outside spending pouring into races late in the game, leaving many incumbents with little time or cash to counter the message. Democrats unsuccessfully ran with accusations that outside groups with anonymous donors were perhaps injecting foreign influence into the elections.Republican-friendly outside groups coordinated a good deal of their spending, allowing them to vastly expand the playing field in House contests while Democrats were left scrambling to protect their incumbents as left-leaning groups stayed largely on the sidelines.Corporate interests mostly funneled their money through other third-party groups, as opposed to setting up their own independent expenditure arms to spend, as some feared they would.Thedecision struck down direct spending prohibitions on corporations and unions, permitting them to spend unlimited amounts to advocate for specific candidates.It paved the way for outside groups like Crossroads GPS and the American Action Network -- two conservative-backed organizations that raised and spent millions to aid Republican candidates as the party took back the majority in the House and picked up six seats in the Senate.In addition, business and labor interests poured millions into independent expenditure ads. The U.S. Chamber reportedly invested $75 million into the election, mostly on behalf of Republican candidates. On the union side, the American Federation of State, County and Municipal Employees alone spent an estimated $88 million on ads and other electioneering on behalf of Democratic candidates.Campaign watchdog groups say those numbers could be doubled next cycle."[The decision] had a disastrous impact on the 2010 elections and this is just the beginning," said campaign finance watchdog Fred Wertheimer, who heads Democracy 21. "You could easily have secret money doubled in 2012."Reform advocates and others on the left point out that conservative-backed outside groups, many of whom did not have to disclose their donors, vastly outspent liberal ones in 2010. According to data compiled by the Center for Responsive Politics, conservative organizations spent $188 million to the $92 million spent by left-leaning groups.This past cycle's Senate races were largely the center of all the outside spending. A total of $73.2 million was spent in just five key contests -- Colorado, Nevada, Washington state, Pennsylvania and Illinois.Conservatives argue the 2010 election was hardly bought by corporate interests, noting the heavy union spending and a political environment that made it much easier to organize and raise money from energized conservatives.Despite conservative groups outspending liberal ones in all five of those key Senate contests, Democrats went 3-2, winning in Colorado, Nevada and Washington state.Former Federal Election Commission Chairman Bradley Smith has been a staunch critic of what he has called President Obama's "misleading" critiques of the court's decision and he said its impact on the midterms turned out to be just what he and many other conservative voices predicted: "Not all that big.""Overall, I actually think it's had a very healthy effect," said Smith, pointing to the sizable amount of issue advertising that outside groups bankrolled in 2010. "This was a very issue-oriented election and I fail to see how that does any harm to the public debate."The spending did have some affect on the state level.Both Smith and Lenhard noted the firestorm retail giant Target created with its six-figure donation to a group backing Minnesota gubernatorial candidate Tom Emmer (R). Gay rights groups immediately criticized the donation, highlighting Emmer's support for an amendment banning gay marriage.While it serves as a cautionary tale for corporations balancing their political interests with protecting their corporate brand, Wertheimer doesn't think it'll stop companies from figuring out how to dive in head first next cycle.Wertheimer and other finance watchdogs are pushing Congress to take up the Disclose Act during next month's lame duck session. Without enacting some reform measures to "mitigate the damage," Wertheimer said he expects the landscape to become exponentially worse in two years, with Democrats forming their own network of 501 c groups to do battle with organizations like Crossroads GPS and American Action Network."We don't know if they can respond with the same amounts of money or whether they'll be 527's or c4's, but I don't think there's any question they'll be there," he said.Those on the left, who were tamped down by Obama during the 2008 cycle, are already beginning to plan competing structures. According to the, Media Matters founder David Brock is planning a new 527 to raise and spend millions for Democrats during the 2012 cycle.For candidates and parties to keep up with the flood of outside spending that is sure to increase in 2012's presidential year, they need to stop handicapping themselves or risk non-party structures completely running the show in 2012, said Smith."They need to quit trying to limit spending," Smith said of lawmakers in both parties. He said removing the limits on party coordination would be a good starting point if candidates want to make it easier to operate in an environment with loads of outside spending."If something like that doesn't happen," he said, "the [Republican National Committee] might as well just sell that nice building they have over there on Capitol Hill to Crossroads GPS."