Interviews with more than 50 donors, strategists and elected officials involved with those efforts, along with a review of thousands of pages of public records, revealed how the Democratic and Republican state machines share an array of strategies and goals.
Both sides rely on interlocking networks of political action committees, party organizations and nonprofit groups, often based in states with forgiving campaign finance rules, that work in concert to raise contributions and shuffle money to thousands of local races around the country. In some states, liberal or conservative donors have established political nonprofits that function like shadow parties, often exempt from the contribution limits or disclosure requirements that apply to candidates and traditional parties.
Not unlike a political version of Cayman Islands banks, the networks allow political strategists to sidestep regulations and obscure the source of funds. Campaign contributions that would be banned or restricted in one state can be sent to a state where the rules allow money to flow more freely, often scrubbed of the identity of the original donor. Some groups work behind the scenes to orchestrate “money bombs” of smaller contributions from hundreds of different donors, allowing the groups to provide candidates with large doses of cash — fingerprint-free — even in states with low contribution limits.
Both networks arose to help Democrats and Republicans skirt the McCain-Feingold campaign-finance law, which sharply cut the flow of money from national parties to the states. But over the last three years they have been turbocharged by the Supreme Court’s Citizens United decision, which made it easier in many states for unions, corporations and the wealthy to pool money for large independent expenditures.
Today, state and even local races increasingly are financed by checks written hundreds or thousands of miles away. A five-figure contribution from a Colorado energy executive passes through a bank account registered in Pennsylvania, where it is mixed with money that ends up in the campaign coffers of an attorney general candidate in Iowa. Business money raised in Michigan, where corporate contributions to candidates are banned, fuels campaigns in Florida and Maine, where such contributions are legal.
Much of the money passes through a handful of Washington-based organizations: From 2006 to 2010, the volume of campaign cash flowing from Beltway-based groups to state parties and candidates almost doubled, to $139 million from $79 million, according to an analysis by The New York Times of data collected by the National Institute on Money in State Politics.