Shadowy Groups Have Poured Nearly $227 Million Into 2010 Elections

Money from Independent Groups Favors Republicans Over Democrats

By AVNI PATEL

Oct. 27, 2010 —

Oil and gas industry services and investors have contributed $415,000 from their company coffers to fund a group blasting Democratic Senate candidates in four states with attack ads.

A North Carolina pharmaceutical executive has spent $3.3 million of his personal wealth to spearhead another group that has spent hundreds of thousands of dollars on mailings to influence Senate races in nine states.

Labor unions and Las Vegas resorts are largely funding a group that has focused on attacking Republican challengers to Democratic Senate Majority leader Harry Reid's seat.

The three groups -- First Amendment Alliance, Rightchange.com and Patriot Majority -- are among more than 230 independent groups that have poured $227 million into the 2010 elections so far, according to federal election data available through the Sunlight Foundation Reporting Group, an organization that tracks campaign spending. Of the total that can be tracked, some $103 million has been spent to support Republican or oppose Democrats, while $67 million has gone toward supporting Democrats or opposing Republicans.

Campaign finance watchdog groups say the flood of money reflects an altered election spending landscape following a series of Supreme Court decisions that have cleared the way for independent groups to raise unlimited amounts of money from corporations, unions, and individuals to directly fund ads, mailings and other messaging expressly supporting or opposing federal candidates in the final days running up to an election. The interests backing the groups are not always apparent to voters, and often the donors remain secret.

"We're talking about a new kind of spending," said Taylor Lincoln of Public Citizen, a Washington, D.C.-based advocacy group that follows campaign spending. "There are probably a lot of corporate spenders out there that, for fear for their reputation and a sense of what was right and the law of the land, didn't want to play that game. Now they don't have to fear any kind of legal retribution. That's a big deal."

The First Amendment Alliance, funded largely by oil and gas interests, is one of the groups ramping up fundraising and spending this election cycle. In 2008, the group spent $120,000 on radio ads, and raised most of its money from three donors, according to filings.

This year, the Alliance has raised $1.4 million, with at least $1.1 million of those receipts coming from the oil and gas interests, according to an ABC News analysis of the group's filings to the IRS. More than a third of the industry cash has come directly from businesses, while the remaining contributions have come from individual contributions from industry executives and investors.

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Top Donors Include Aghorn Energy and Anschutz Corporation

Among the Alliance's top donors are two private corporations, Odessa, Texas-based Aghorn Energy Inc and Denver-based Anschutz Corporation. In previous election cycles, the corporations had been constrained in making independent expenditures on ads that expressly advocated one candidate over another.

Top individual contributors include Texas rancher Russell Gordy, energy investor Jonathan Farber, and Texas homebuilder Bob Perry.

In the past month, the Alliance has spent $1.2 million on television ads aimed at defeating Democratic Senate candidates in Colorado, Kentucky, Nevada, and West Virginia, according to Federal Election Commission data available via Sunlightfoundation.com.

Anthony Holm, an Austin-based political consultant and the Alliance's president, says the Supreme Court's decision has had no impact on the group's fundraising strategy. "This is a group run out of Texas. Overwhelmingly the largest industry in Texas is oil and gas, so one would expect donors to be in the energy industry."

Those ties are not apparent in the group's ads or on its web site, which lists a post office box in Alexandria, Virginia as its address. The web site states the Alliance's mission is to "communicate instances of waste, fraud, hypocrisy and general disregard for standards of civility in society."

At the top of the group's list of targets is incumbent Democratic Senator Michael Bennet of Colorado, who is fighting to keep the seat he was appointed to when Interior Secretary Ken Salazar joined the Obama administration. The group has spent $262,000 in ads opposing Bennet, and another $131,000 on ads supporting his challenger, Ken Buck, according to FEC data available via Sunlightfoundation.com.

The Democratic-leaning group Patriot Majority is one of the biggest players in the contest between Democratic Senate Majority leader Harry Reid and Sharron Angle in Nevada. With its $1.6 million in ad spending attacking Angle, the group has even outspent the Democratic Senatorial Campaign Committee in Nevada.

"You can now have these essentially 'shadow parties' doing the bidding that the official parties did back in the nineties," said Lincoln.

Labor unions and Las Vegas resorts have contributed a total of $1.2 million to the group. So far, the group's spending has been solely focused on opposing Republican candidates in the Nevada race, according disclosures made to the FEC available through SunlightFoundation.com.

Earlier in the year, the group spent $320,000 on ads attacking Republican primary candidate Sue Lowden, who some believed could be a stronger threat to Reid in the general election.

GOP Donor Fred Eshelman

The Patriot Majority ads have been competing with some $3 million in ad-spending targeting Reid from conservative-leaning groups, American Crossroads and Crossroads GPS. The two organizations, which share a Washington, D.C. office and the same consultants, have spent nearly $30 million on races around the country, according data available at Sunlightfoundation.com. While American Crossroads publicly discloses its wealthy donors, Crossroads GPS does not.

Not all outside groups are using their cash to blanket the airwaves; some have decided to focus their efforts on direct mail, robo-calls, and web videos.

Rightchange.com has spent $2.2 million in mail pieces targeting voters in nine hotly contested Senate races, opposing Democrats and supporting Republicans. The group has also launched "micro-sites" in hotly contested House and Senate races.

The group purports to be "a new generation of conservative film, Hollywood, TV and technology professionals," according to its web site.

But the effort is largely funded and spearheaded by Fred Eshelman, a GOP donor and millionaire chief executive of a North Carolina company that runs drug trials for pharmaceutical companies.

A spokesman for the group said that Rightchange.com aims to be "a departure from the traditional political or issue advocacy organization model," contracting with film production companies and animators to produce creative and sometimes satirical web videos aimed at going viral.

Rightchange.com is one of many groups that have set up a separate arm that is not required to disclose its donors. Lincoln says that the shadowy nature of such groups is bad for the electoral process.

"It's not good for democracy to have all these attack ads when no one is standing behind them," said Lincoln, who acknowledges that the actual impact of the spending is largely unknown. "The question is ??? how much of this stuff sticks? To what extent do voters tune out when the ad comes from Americans for America?"

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Chris James contributed to this report.

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