Senate Republicans are preparing to significantly escalate their plans to exploit a campaign finance loophole that will allow them to save millions of dollars on TV advertising, irritating Democrats who hoped federal regulators would overturn the Republican would block the plan.
Republicans in late July quietly began trying out their new strategy: running campaign ads for a candidate, framed as a fundraising plea, to get cheaper ad rates and avoid burdensome content restrictions. Democrats, outraged by what they saw as violations of ethical and legal boundaries, asked the Federal Election Commission to intervene.
During a contentious meeting Thursday, the agency deadlocked 3-3 over whether these joint fundraising ads should be allowed, effectively allowing the practice to continue.
With no restrictions imposed, Republicans, who face a large cash differential with Democrats, are now preparing to make a small-scale effort a key part of their closing TV advertising strategy.
The National Republican Senatorial Committee and its candidates have already set up these fundraising vehicles in several states — and in recent weeks have added Wisconsin, Pennsylvania and Nevada. These committees have already raised money for a flood of new, cheaper “fundraising” ads.
The financial reality is that Republicans, who face a significant cash shortage, need these types of spending solutions the most. But Democrats, who “unlike Republicans … asked for clear guidance from the FEC” and did not get it, now say they will be forced to use this tactic as well.
“Going forward, the DSCC wants to ensure that our campaigns are not at a disadvantage in the final weeks of the campaign and will use the same tactics employed by Republicans regarding joint committee advertising,” said David Bergstein, spokesperson for the Democratic Senatorial Campaign Committee. in a statement.
And Republicans took a victory lap: “Senate Democrats’ attempt to limit party speech failed spectacularly. This is a tough day for the DSCC,” said Ryan Dollar, general counsel of the NRSC.
Democratic candidates have raised much more money than Republicans and can buy ads at the cheaper rate offered to candidates. Republicans rely more heavily on independent spending from their campaign arms and allied super PACs, which have to pay much more per ad.
The NRSC has tried to overcome the shortage by using so-called “hybrid advertising,” in which the party and candidates share costs – and receive the candidate rate. But half of those ads must be dedicated to a national party or issue, which often leads to clunky messaging. And the candidate’s campaign has to foot half the bill.
The NRSC was looking for ways to more effectively reduce Democrats’ enormous cash advantage, within the constraints of campaign finance law. Dollar had argued for the use of a new strategy. The plan: air political ads through a so-called “joint fundraising committee” – a group that simultaneously raises money for several groups, such as party committees and individual campaigns.
That would allow the NRSC and other party committees to cover nearly the entire cost of the ads while maintaining a focus on the specific race. All the committee has to do is insert a donation line at the end of the ad, turning a campaign ad into a fundraising ad.
As financial differences widened, the NRSC decided to try Dollar’s idea.
They began testing the idea in Montana in late July, with ads run by a joint fundraising committee helping GOP Senate candidate Tim Sheehy. One ad from the group, which has spent $2.8 million to date, was narrated entirely by Sheehy. He begins by discussing his military service and ends with the phrase “join my team, give now.” In the final seconds of the spot, a QR code appears briefly, leading to a fundraising page.
In mid-September, the NRSC and its candidates began running similar fundraising campaign ads in Maryland and Arizona, with joint fundraising committees having so far spent nearly $3 million on TV in the former and $500,000 in the latter.
“This is simply a blatant attempt to circumvent contribution limits, and it’s just the latest attempt by Republicans to further dismantle our campaign finance system,” Tiffany Muller, president of End Citizens United, a liberal campaign finance reform group, said in an interview . Thursday. “This big outside money directly undermines the power of small-dollar donors investing in candidates.”
The Republican Party only needs to flip two seats to guarantee control of the Senate, and they prefer that. But party leaders have been publicly warning for weeks that Democrats’ cash shortage could cause them to lose winnable seats. And in some states, the differences between the two parties have only widened as Senate Democrats have raised tens of millions of dollars from small-dollar donors in recent months.
The party committees can refer donors to these joint fundraising committees, which can accept much larger checks. They benefit candidates who raise more from large donors and make attracting small donors less necessary.
At the FEC’s Thursday meeting, Democratic commissioners expressed concern that allowing joint fundraising committees to run ads with short advertising requests would encourage them to push the boundaries with ads that don’t deliver plausible fundraising benefits.
“There’s no end limit here, right? For example, someone could post a QR code for a quarter of a second and make it completely transparent, and I don’t know how my colleagues would vote in an enforcement case,” said Commissioner Dara Lindenbaum, a Democrat.
This continued practice could have ramifications far beyond this election cycle, as campaigns and their joint fundraising committees become more creative.
These were among the concerns of campaign finance advocates prior to the FEC’s decision. Saurav Ghosh, director of federal campaign finance reform at the Campaign Legal Center, was among those who filed comments urging regulators to say the tactics should be impermissible.
“While this seems like kind of a technicality and kind of in the weeds of campaign finance, I think the ramifications could be quite significant,” Ghosh said.
