Ted Cruz super PACs: A new era of political fundraising

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CNN  — 

Ted Cruz backers have ushered in a new era for super PACs.

Supporters of the Texas Republican presidential candidate made a bombshell announcement this week — that a network of four affiliated super PACs will have raised an eye-popping $31 million by the end of the week. The disclosure, coming within weeks of Cruz launching his campaign for president, has sent deep ripples through the political fundraising world.

The idea of not one, but multiple, affiliated super PACs ostensibly working together to haul in donations for the same presidential candidate is unprecedented, campaign finance experts say.

READ: Network of Cruz super PACs boasts big haul

Veteran fundraisers point out that the strategy could give already powerful donors never-before-seen levels of influence — and choice — over how their dollars are spent to help a presidential candidate. The unique setup is aimed at giving mega donors “influence and control over the expenditures” they are funding, explained Dathan Voelter, an Austin-based attorney and treasurer to three of the four super PACs.

As political strategists and campaign finance experts scramble to assess just what this all means for the future of political fundraising, one thing seems clear: Wealthy donors are most certainly about to get more powerful – not less.

“My bet is that it all has to do with the donors – donors having different views of what the super PAC should do,” said Cleta Mitchell, a political law attorney at Foley & Lardner, who summed up the strategy as “very unusual.”

“So rather than having internal arguments about it, they just established different super PACs,” she said.

Campaign finance reformers have for years spoken out against the oversized influence of deep-pocketed donors in the political system. There was no bigger blow to their cause than the Supreme Court’s historic Citizens United ruling in 2010, which allowed for super PACs — a kind of political action committee — to accept unlimited amounts of contributions from various entities including, individuals, corporations and unions.

SEE: Paul best GOP bet in three swing states, poll says

In recent election cycles, a handful of high-profile, mega-wealthy donors have spent unprecedented sums of money through super PACs, supporting or attacking political candidates often with an eye towards achieving a narrower cause.

Liberal billionaire and environmentalist Tom Steyer; pro-Israel conservative casino magnate Sheldon Adelson; and wealthy businessmen Charles and David Koch — better known to many as simply the “Koch brothers” — have poured hundreds of millions of dollars into super PACs to influence elections.

One Republican strategist who leads a major GOP super PAC called the multi-super PAC strategy a “brilliant move” that offers potential donors an “a la carte” menu of super PACs to consider.

“A super PAC might go into a pitch and say here’s our plan to win: We’re going to tear down Bush. And a donor might say, “Nah, I’m not interested,’” said the strategist, who declined to speak on the record so as not to expose their clients. “But now, they walk in and they say, ‘We’re going to have data, we’re going to model the voters, do rallies, tear down Bush and build up Ted.’ And the donor says, ‘All right, I’m interested in that one, this one and that.’”

So far, there are four super PACs pulling in cash to benefit Cruz’s campaign: Keep the Promise PAC, Keep the Promise PAC I, Keep the Promise PAC II and Keep the Promise PAC III. Each is tethered to a big donor or donor family. Voelter said more could spring up if another big enough donor walks onto the scene – a Keep the Promise IV, for example.

The four PACs can solicit unlimited amounts of money, thanks to the Citizens United ruling, and can coordinate amongst each other but are banned from working with Cruz’s campaign.

The $31 million amount cannot be independently verified until the next Federal Election Commission disclosure deadline. If it’s accurate, that starting figure would easily top the $23 million the Winning Our Future super PAC hauled in – mostly from Adelson – to buoy Newt Gingrich’s 2012 primary bid, according to the Center for Responsive Politics.

Voelter said the super PAC setup sprang up after a “group of donors” started looking for ways to contribute to the election effort but also “address some of the shortcomings” of past super PAC efforts.

Austin Barbour, who runs a pro-Rick Perry super PAC, said it’s not unusual for most generous donors to want to have heavy sway over a PAC.

“Donors want to know how you’re spending the money. Donors want to know what you’re doing,” Barbour said.

The setup has prompted a lot of head-scratching among campaign finance experts who question the upsides of the fragmented organization.

“I don’t think there are any efficiency gains from doing it this way – the accounting headaches are not insignificant having been on that end of trying to report stuff like this,” said David Keating, president of the Center for Competitive Politics, a group that tracks political spending. “It seems like a big hassle.”

Regardless, the super PACs have given a big boost for Cruz, who few expected to attract this kind of a hefty financial backing in such a short period of time.

“People were saying you know Cruz is good and he’s a conservative and this and that, but he’s not going to be able to raise money and he’s not going to be able to win,” campaign spokesman Rick Tyler said of the super PAC haul. “I knew it would be over and it’s over.”

Meanwhile, the Cruz campaign has also made strong inroads in the first weeks of his official candidacy, raising more than $4 million in eight days after Cruz launched his bid, mostly from small donors. This is a clear sign, Cruz allies say, of his viability in what is expected to be a crowded Republican field.

“It’s just very difficult to get out your message when you don’t have the resources to do it. Here we have a conservative who actually can raise money,” Tyler said. “And not just grassroots money, but major donor money.”