Third-Party Groups Taking Over This Election Year

Oct. 6, 2010 — -- To Democratic Rep. John Spratt, the TV ads running in his South Carolina congressional district are unrelenting.

"Washington liberals are trying to trick you," says one TV ad from the American Future Fund. "Spratt voted for Nancy Pelosi's agenda more than 98 percent of the time."

According to the Nielsen Company, almost 500 TV ads airing in Spratt's district come from third-party independent groups that are not bound by the same campaign finance laws that Spratt, a 28-year veteran who heads the House Budget Committee, must follow.

"Money that's coming in from unidentified, nondisclosed groups is, dwarfs anything that I've ever seen before," Spratt said.

Because of Supreme Court decisions earlier this year on campaign spending, in this election cycle the rules are much looser for these groups. And they're having a huge impact in some key races.

"At a very minimum, they [the groups] should disclose who they are, what they want and what their purpose is," Spratt told ABC News. "They're drowning out the voices of the people of South Carolina."

Unlike in previous elections, these groups now can attack candidates more directly and many never have to reveal who's funding them -- even as they raise and spend unlimited amounts of cash from individuals, corporations and unions. They cannot give money directly to candidates or coordinate their efforts with individual campaigns.

The restrictions vary depending on how the group registers itself, but without question the rules have been loosened significantly.

In his State of the Union this year, President Obama slammed the high court's decision that led to this current scenario. He also commented on the groups during a Wisconsin rally in September. "They're posing as nonprofit groups with names likes Americans for Prosperity ... or Americans for Apple Pie," he said to laughter. "I made that last one up."

The president said that all of these groups are headed by Republican consultants, which isn't true, but Republican-leaning groups are clearly dominant. GOP-leaning groups have spent $24.8 million on Senate and House ads from Aug. 1 to Sept. 20 compared to $4.9 million by Democratic-leaning groups, according to the Campaign Media Analysis Group.

GOP-Leaning Groups Outspent Democratic Counterparts

Although Democratic groups have benefited from the new rules, in recent months, Republican-leaning groups from outside have outspent them, 5 to 1.

"The rule book has changed," said Evan Tracey, of the Campaign Media Analysis Group. "It's almost like comparing baseball pre- and post-steroid era."

So who are these groups? They are not always who they seem to be.

The American Future Fund attacks Spratt for being a big spender -- "The Spratt-Pelosi budgets spend trillions and create crushing debt," says the group's TV ad -- but the fund's president and her family have received almost $1 million in farm subsidies.

Citizens for a Working America started airing an ad last week that targeted South Carolina's Spratt: "Ouch! That's how John Spratt's votes in Congress feel. They hurt."

ABC News traced Citizens for a Working America PAC to Republican consultant Norm Cummings, who said third-party independent groups existed because GOP chairman Michael Steele was doing such a bad job.

"The Republican National Committee is an embarrassment at this point," Cummings said. "People that want to have an impact on the election can't rely on it as a vehicle to make things happen."

Cummings' group is required to disclose its contributors to the Federal Election Commission this month, but he has more leeway as to what Citizens for a Working America PAC can say in its ads.

"What hasn't changed is there's plenty of money interested in politics and it will find a way into the system," he said. "This has a potential to be a wave election year. If you're going to beat somebody like Spratt, this is the kind of year you're going to do it. He's been sitting in the district that doesn't match him for a long time. You pick off a couple of seats like that; it comes a long way towards helping switch the control."

American Crossroads: Biggest of These Groups Nationally

The biggest of these groups nationally is American Crossroads, a pro-Republican group formed with help from Karl Rove, President George W. Bush's former strategist.

American Crossroads is "on the vanguard of this new wave of independent expenditure-only committees," said Dave Levinthal of the Center for Responsive Politics, which tracks campaign finance data. "They've been very aggressive."

The group has two divisions that run TV ads; Crossroads GPS does not disclose its donors.

American Crossroads recently announced a new $4.2 million ad buy in eight states. That's in addition to the $14 million it's already spent on advertisements, including one against Colorado Democratic Sen. Mike Bennett.

"Michael Bennet should work for us -- not Wall Street," the TV ad says; however, those behind Crossroads are hardly anti-Wall Street populists and include a Who's Who of Republican consultants.

Steve Law, former general counsel of the Chamber of Commerce, runs American Crossroads and responded to critics of groups like his.

"The law says that if you're primarily involved in the issues debate, and you do some politics but your primary forcus isn't issues," Law told ABC News, "you don't disclose your donors. We take that law very seriously. We comply with it and we think that's a good law.'"

ABC News' Devin Dwyer contributed to this article.