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Super Pacs, with murky regulations and unlimited money, find down-ballot races

WASHINGTON — When Anthony Farhat set up a political committee backing Paige Kreegel, a congressional candidate in southwest Florida, he said he blocked Kreegel's number from his phone "to be overly cautious."

"I knew super PACs were being held under high scrutiny," Farhat said.

In the fast-evolving, big-money super PAC era, the airtight seal Farhat projects is generally accepted as rule of law. "My goodness, if we coordinate in any way whatsoever, we go to the Big House," Mitt Romney once said.

Reality is quite different.

Under Federal Election Commission rules, Kreegel can still interact with Farhat and he can help the super PAC raise money. Two of Kreegel's friends donated more than $1 million, which is being used to attack his opponents in the Congressional District 19 GOP primary.

The maximum contribution had they given directly to Kreegel: $2,600.

If 2012 was the breakout for super PACs in the presidential campaign, 2014 marks their down-ballot arrival. More and more, committees are being established with the purpose of backing a single candidate. One usually spawns another. The pro-Kreegel group Values Are Vital has been matched with one supporting Lizbeth Benacquisto, another Republican in the special election that effectively will be decided in the April 22 primary.

The trend raises new questions about the murky regulations surrounding outside groups and the lax enforcement of those rules. It has injected unprecedented amounts of money into local elections.

"The individual candidate super PAC is going to be all over the place in 2014," said Fred Wertheimer, president of the government watchdog group Democracy 21. "They are vehicles for avoiding and eviscerating all the candidate contribution limits."

• • •

Super PACs are the child of the landmark 2010 U.S. Supreme Court case Citizens United, which unleashed unlimited donations from corporations, unions and individuals.

“This Court now concludes that independent expenditures, including those made by corporations, do not give rise to corruption or the appearance of corruption," the 5-4 decision read. Writing for the majority, Justice Anthony M. Kennedy reasoned that "by definition, an independent expenditure is political speech presented to the electorate that is not coordinated with a candidate."

But in most cases, there are ties between super PACs and the candidates they back, from the staffer who left the White House to run a super PAC backing President Barack Obama to the former campaign aides to Romney who broke off to create a group to support him. Farhat was involved in Kreegel's failed 2012 congressional race.

Campaigns and super PACs often share the same consultants, ad makers and direct mail vendors. They can share voter lists. Candidates can appear at fundraisers for the super PACs. Increasingly campaigns produce video footage of a candidate that can be used by an outside group that just happens to, wink, find it online.

About the only thing that is expressly prohibited is coordination on specific expenditures — the message contained in a TV ad, mailer or robocall.

"It's a farce. These groups are coordinating with candidates in any natural sense of the word," said former FEC chairman Trevor Potter, who helped comedian Stephen Colbert set up a super PAC (Americans For a Better Tomorrow, Tomorrow) that was used to mock loose election regulations.

Potter attributes the problem to the 2002 campaign finance overhaul that passed Congress, known for its sponsors, Sens. John McCain and Russell Feingold. A provision in the bill set up firewalls, including that outside groups could not use the same agents as campaigns. But opponents got that stripped out and the rule writing was left to the FEC.

"The FEC made a complete mess of it. It was so bad that congressional sponsors went to court to have them thrown out on the basis they were contrary to what the FEC was told to do," said Potter, who was general counsel to McCain's presidential campaigns.

"We're stuck with an FEC that allows a lot of coordination even though the Supreme Court assumed there would be none," he continued. "The next twist is that every candidate is going to have a super PAC, and that opens up exactly what the Supreme Court said wouldn't happen, which is the danger of corruption."

Paul S. Ryan, senior counsel of the Campaign Legal Center, said: "It has enabled wealthy special interests to curry favor with candidates not by cutting checks directly but doing something more desirable, which is walking down to the local TV station and making an ad buy.

"There's very select few in our population that have the money to do these kinds of favors. The rest of us don't have as big a voice in democracy."

Interview requests to two FEC commissioners, a Republican and Democrat, were declined. An FEC spokeswoman also declined.

• • •

While complaints have rolled in about coordination — including one against a Democratic super PAC that was accused of collaborating with a Pinellas County Democratic group on an ad attacking now-Rep. David Jolly, R-Indian Shores — very few have been prosecuted.

In January 2012, the Center for Public Integrity reported that since 1999 the FEC had conducted a total of three investigations into alleged coordination, with two resulting in fines. Independent expenditure groups existed before Citizens United but the number — and the money involved — has grown dramatically since 2010.

Critics say a large part of the problem is the commission is deadlocked on partisan lines, with three Democrats and three Republicans. At the same time, cases can be difficult to prove without hard evidence — an email from a candidate to a super PAC, for example.

House Democrats have introduced legislation to tighten the rules, including barring recent campaign staffers from heading up super PACs. But prospects are remote with Republicans generally viewing more regulations as an infringement on free speech.

So super PACs will continue to spread. Already they have popped up in School Board elections in Los Angeles and New Jersey and last year's mayoral race in Boston.

• • •

The southwest Florida congressional race provides insight. This is Kreegel's second attempt to win the seat, which was vacated when Rep. Trey Radel, R-Fort Myers, resigned after pleading guilty to buying cocaine from an undercover officer in Washington.

According to interviews and sworn affidavits from two campaign aides who worked for Kreegel in the 2012 race, Kreegel talked about setting up a super PAC.

"He told me that he did not want any negative advertising to come from his campaign committee and directed me to set up an independent expenditure committee," Jason Roe, a consultant, wrote in a sworn statement provided to the Tampa Bay Times. "I explained to him that it was illegal for me to set up, manage or coordinate with another committee. He suggested that no one would know we controlled it and attempted to get me to reconsider."

Kreegel, in an interview, noted that such a group was never established and suggested Roe had a grudge because of a lawsuit over unpaid fees.

Today Kreegel, a physician and former state legislator, is one of three top Republicans vying for the seat. Even before he officially declared his candidacy, the Values Are Vital super PAC was set up by Farhat, who had been part of the 2012 campaign. Both men say they have had no contact since then. (Farhat says he's less involved now due to demands of his home building business.)

Kreegel told the Times that he helped line up donors for the super PAC — two of his friends, the only contributors on record, gave more than $1 million — but when asked for additional detail, his campaign refused to answer.

Values Are Vital has spent more than $600,000 in ads promoting Kreegel and attacking two of his opponents. Kreegel attracted attention after he left a voice mail for one of the rivals, Curt Clawson, tipping him off to — and apologizing for — the coming onslaught.

Kreegel said he learned about it from FEC reports, which are public record.

"Neither Values Are Vital PAC nor any of its vendors have coordinated or discussed activities with Dr. Kreegel or anyone affiliated with the Kreegel for Congress campaign," James Thomas, the group's attorney, said in a statement. "The PAC is in full compliance with all laws and FEC regulations."

Contact Alex Leary at leary@tampabay.com. Follow him on Twitter @learyreports.

Super Pacs, with murky regulations and unlimited money, find down-ballot races 03/28/14 [Last modified: Saturday, March 29, 2014 9:06pm]

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