Outside money ban in Massachusetts Senate race is working, but at what price?

— -- What's one way to blunt the effects of outside interest groups on politics? Ban them. That's what Republican Sen. Scott Brown and Democratic challenger Elizabeth Warren did in their Massachusetts Senate race. The two candidates struck a unique deal in January (pdf) to penalize one another if any outside group bought advertising to influence their race--and it has worked. Maybe too well. Consultants and political observers now question whether the ban has come at an electoral price.

Brown was the driving force behind the agreement, dubbed the "People's Pledge." After weathering a negative special election campaign against Martha Coakley in 2010 and then facing attacks from the League of Conservation Voters and the League of Women Voters in his race against Warren in 2011, Brown lobbied hard for the arrangement. When Warren, a Harvard Law professor and consumer advocate, agreed in Jan. 2012 to a pact requiring each candidate to pay penalties to charity if outside groups advertised for them or against their opponent, the move was viewed as a coup for Brown who held a 2-1 cash advantage.

But since then, Warren has established herself as perhaps the most prolific Senate fundraiser in the country and became mired in controversy over her claimed Native American ancestry. Consultants in the state say these factors add up to potential regrets from Brown backers and frustration from super PACs and other third-party groups.

"They're champing at the bit from the outside," Tony Cignoli, a Massachusetts-based political consultant who works mostly with Democrats but has clients from all political parties, told Yahoo News. "What we're hearing from a lot of the consultants in both camps... is that there is so much at stake in Massachusetts with this particular race, it's very difficult for outsiders to stay out."

The controversy over Warren's heritage--she has provided no documentation to prove her 1/32 Cherokee heritage, but she and collegiate officials deny that it offered her any employment advantages--provided the first major example of a missed opportunity for outside groups in this race. Brown's campaign has chosen not to run any ads on this topic and outside groups can't pick up the slack.

Howie Carr, who hosts a conservative talk show popular in New England and writes a column for the Boston Herald, says he wishes Brown hadn't embraced the pact.

"I think it would have been better if Scott hadn't agreed to it, the way things worked out with the Indian stuff," Carr said. "It would have been nice to have some people come in and bang her over the head with the falseness of her claims to be an Indian."

Many political observers in the state agree that were it not for the outside money ban, the race's tone and topics of discussion would likely have been vastly different.

"If those outside groups had been able to launch on that issue, they would have created such misperception," Cignoli said of the heritage controversy. "Warren would have had more difficulty continuing staying on message."

Other conservatives, however, disagree. They say that the Cherokee story received plenty of play in the Massachusetts markets, and that the amount of money coming directly through the campaigns is more than enough for the candidates to make their case without competing with the noise from unaffiliated outside groups.

"I know from running campaigns myself over the years, I like to be able to control things," said Charley Manning, a veteran Republican political strategist in Massachusetts. "Scott's going to have plenty of resources to make the case of why folks should re-elect him and we're not being besieged by rashes of negative ads."

Not only has the ban altered the campaign dialogue, it has also changed the fundraising model. Back in Dec. 2011, Brown had $13 million on hand to Warren's $6 million. Since then, Warren has demonstrated notable fundraising prowess. She outraised Brown in the second quarter of this year with $8.6 million to Brown's $5 million and is inching ever closer to Brown in cash on hand--Warren has $13.5 million while Brown possesses $15.5 million. Brown is no longer heads and shoulders above Warren in campaign cash, and some say the Warren campaign has the trusty pact to partially thank for that.

"I think it was a brilliant, strategic political move for him at the time," longtime Massachusetts Democratic consultant Jim Spencer told Yahoo News of the ban. "But now it's not the case that he has more money." What's more, Warren's average contributions are lower, Spencer said, meaning Warren can tap much of her existing donor base again before Election Day.

"He's probably rethinking that right now... given the Warren fundraising juggernaut," Cignoli said.

"This has been probably the biggest strategic blunder by Brown that I can imagine," said one senior Democratic strategist, about Brown's agreement to the pact. "I think if you look at the scope of whole senate landscape, you can't deny the fact that Republicans always win at this. He took that out of the equation."

Representatives from third-party groups that support Warren say that despite their inability to run ads against Brown, they're glad the pact is in effect. Conservative groups, they argue, would have crushed them with outside money.

"The fact that they've been completely kept on the sidelines I think is an encouraging fact," said Navin Nayak, senior vice president for campaigns at the League of Conservation Voters, the group that ran ads against Brown in 2011. He added that "there's no doubt" the pact has been a net positive for Warren's campaign. "The idea that we wouldn't have been outspent over the last eight months just doesn't hold water with any other race we're looking at."

The ban also prevents the party committees (the Republican and Democratic National Committees and the National Republican Senatorial Committee and the Democratic Senatorial Campaign Committee for example) from making independent expenditures in the race. While all of these committees remain active in the campaign, they're doing it without advertising. The NRSC declined to respond to Yahoo News' request for comment on the outside money ban, but it can be assumed that it has resulted in more money to go around for other high-profile races, since the Massachusetts race isn't sapping their spending.

Brown's campaign and his Republican supporters disagree with the suggestion that the pact has put them in a bind, saying Brown would never have entered into the agreement if it could have hurt his campaign and he continues to firmly stand behind the pact's true purpose-- keeping outside spending at bay.

But there is much chatter in the state about the pact being broken before Election Day and Spencer, Cignoli and others say the common question is whether Brown supporters will be the ones to thwart it.

"The feeling is it's inevitable it will be broken," Cignoli said.

But while Spencer says that he hears the pledge's end frequently discussed in political circles, he doesn't subscribe to the theories. "Brown initiated this. If [outside spending on the] right comes in, he's going to look bad... like just another phony politician," Spencer said.

Another note: Brown supporters have already broken the pledge twice.

Brown's campaign paid $1,000 to the Autism Consortium in March after a group called CAPE PAC purchased Google ads in support of Brown. Later that month, Brown agreed to donate over $34,000 to charity after the American Petroleum Institute ran radio and print ads urging voters to tell Brown to oppose a tax hike on energy companies-- a position he had already taken. At the time, issue-specific advertising was not covered by the agreement. But Brown agreed to close the loophole.

Brown's team said they are hopeful the pact will remain in place through Election Day.

"We're pleased that Scott Brown's People's Pledge has kept outside groups and super PACs off the Massachusetts airwaves, and we're hopeful the special interests on both sides will remain out of our race through the election," Brown communications director Colin Reed wrote in an email to Yahoo News. "This race will be decided by the people of Massachusetts based on the very real differences between Scott Brown's independent leadership and pro-jobs agenda, and Elizabeth Warren's job-destroying tax and spend philosophy."

Warren's camp also expressed support for the ban, but expressed no doubt about the ban's longevity. "Elizabeth believes the people of Massachusetts are entitled to hear from the candidates themselves--in their own voice--their best case for why they should be in the United States Senate. And for months now that's been the case here in Massachusetts," Warren press secretary Alethea Harney wrote in an email to Yahoo News. "That's how Elizabeth believes elections ought to work and she expects that the pledge will continue through Election Day."

Republicans groups say if it weren't for the pact they'd be involved in the race, but they  intend to respect the agreement.

Jonathan Collegio, a spokesman for American Crossroads, pointed out that they have remained quiet in 2012 "to this point."

"Crossroads will be engaged in a variety of Senate contests and as our previous advertising shows, Massachusetts would have been one of those states," Collegio said.

Independent polls stretching back to March show the race tied or nearly in a dead heat with 15 percent or fewer of voters still undecided.

With such a small segment of undecided voters and no outside help available, strategists say debates between Brown and Warren scheduled for this fall have gained new importance.

Brown and Warren late last month agreed to meet for four televised debates between now and Election Day.

"The media usually puts much more stock in debates than they're worth," Spencer said. "But in this particular campaign, these debates are huge."