2010 Election Spending Up 40 Percent, Watchdog Estimates

VIDEO: Obama accuses the Republicans of taking donations from foreign companies.
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With just under two weeks before voters head to the polls, the 2010 midterm election cycle is on track to be the most expensive in history, flush with 40 percent more cash than in 2008, according to the latest figures from the nonpartisan Campaign Finance Institute.

The group estimates $564 million will be spent by political committees and nonprofit groups this year, including $334 million by pro-Republican organizations and $230 million by pro-Democratic groups.

Experts say spending by independent third-parties are driving the surge, infusing 73 percent more cash into the campaign through mid-October than they did two years ago.

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President Obama and top Democrats have pointed to the record sums as the basis for their criticism of groups like Crossroads GPS and Americans for Prosperity, which don't have to disclose the identities of their donors.

"Their lips are sealed, but the floodgates are open," Obama said. "If we just stand by and allow the special interests to silence anybody who's got the guts to stand up to them, our country is going to be a very different place."

The administration has said the Supreme Court's "Citizens United" decision has played a key role in unleashing the flood of cash, by lifting campaign finance restrictions on direct, independent electioneering by corporations, and unions using their general funds in the weeks before elections.

But Campaign Finance Institute executive director Michael Malbin said it's too soon to tell whether the court's decision facilitated an influx of new money – or just allowed corporations to spend it differently.

"While the [Supreme Court's] decision enables more direct business participation, it does not mean more business corporations will feel an incentive to act in this way, instead of giving money through intermediaries (including trade associations and non-profit advocacy groups) as they have done in the past," he said. "The evidence so far is mixed; any conclusion is highly premature."

Impact of Citizens United Debated

Malbin points out that a significant amount of campaign spending by third party groups does not have to be reported at all, under the law. Moreover, groups that do report, occasionally overestimate spending to gain a competitive advantage, or underestimate to later show they exceeded expectations, he said.

Many corporations may also be wary of directly, publicly tying their names to specific candidates. Target Corp. and Best Buy, for example, drew fire earlier this year when they made direct contributions to a political group supporting Republican gubernatorial candidate Tom Emmer.

And some experts say the uptick in political spending by third-party groups may simply be continuing through the channels that they have always used.

"The day before 'Citizens United,' corporations had the right to make unlimited contributions to issue advocacy," said Allison Hayward of the Center for Competitive Politics. "The one thing that's changed is specific advocacy [for candidates]… There would have been a lot of spending even if there hadn't been 'Citizens United.'"

Still, skeptics say the court's decision has undoubtedly given business corporations new confidence in directly campaigning for or against a candidate, and allowed them to give secretly to nonprofit interest groups, like the U.S. Chamber of Commerce, which orchestrate elaborate election advertising campaigns.

"'Citizens United' represents an enormous change in how elections are funded," said Trevor Potter, president of the Campaign Legal Center, adding that, in his view, even if the influence of 'Citizens United' is not fully apparent it is definitely having an effect.

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