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Buffeted by the economy and discouraged by the candidates, donors dry up for attack ads like those by Swift Boat Veterans.

The recent collapse on Wall Street appears to have found another victim: the independent political groups aiming to make an impact on the 2008 elections.

Expected to be a force in the final weeks of the presidential race, outside groups and the pointed advertising they brought to the airwaves in recent campaigns are barely evident this year. Political operatives say the fact that many wealthy potential donors have shied away from investing in efforts such as the infamous Swift Boat Veterans for Truth is that they are simply too busy trying to salvage their own financial portfolios.

"After the (GOP) convention, things looked good," said Phil Musser, a Republican fundraising consultant. "Major donors interested in issue advocacy were tuned in, political juices were flowing, polling looked good, and then, blammo! Most donors lost 20 or 30 percent of their net worth in eight days. With few exceptions, that pretty well shut down the money discussion for a lot of folks."

Four years ago, groups operating outside the party structure invested more than $130-million in television commercials, often carrying the kind of negative messages that the candidates themselves wished to avoid. This year, total spending by such groups is at about $17-million so far, with no single organization playing a dominant role, according to Evan Tracey of the Campaign Media Analysis Group.

Their decline was under way before turmoil swept through the markets. Both Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., openly discouraged their supporters from backing such groups early on in the campaign. They considered the efforts, often waged by entities known as 527s because of their tax designation, as running counter to the reformist images both candidates were attempting to burnish.

Several major players from past years announced that they would not participate this time around. Most notable among them was T. Boone Pickens, the Texas oil man who helped back the Swift Boat Veterans ads targeting Sen. John Kerry, D-Mass., four years ago.

The legal climate has also changed. After the 2004 campaign, the Federal Election Commission issued an unprecedented $2.6-million in fines against seven 527 groups. This year, lawyers advising the donors to those groups warned that the FEC fines could be a precursor to action by the Justice Department.

But fundraising consultants say the economic collapse ultimately slammed the door. One group expected to emerge as a major player, the conservative Freedom's Watch, hinted that it could spend as much as $200-million on congressional races nationwide.

An early infusion of donations fueled $30-million in expenditures, including ads seeking to influence several congressional special elections. But as November approached, several of the moguls who had been supporting the group became distracted by their own financial distress.

Perhaps most notable among them was billionaire casino mogul Sheldon Adelson. As his company, Las Vegas Sands, struggled through steep September declines, Adelson saw $4-billion of his personal fortune evaporate as a result of the slumping national economy, and that was before the slow-motion stock market crash. The Las Vegas Review-Journal reported that between Aug. 29 and Oct. 1, Adelson suffered the steepest drop among those who lost $1-billion or more during the credit crisis.

A spokesman for Adelson, Ron Reese, said, "Mr. Adelson does not comment on his political activity."

Another Freedom's Watch patron, New York financier Paul Singer, faced investor concerns over the fate of his firm Elliott Associates, which had significant exposure to the collapse of Lehman Brothers. Singer helped raise more than $1-million for Republicans in the current election cycle and was viewed as an important potential resource among those trying to find support for independent groups.

A spokesman for Singer declined to comment on his political activity this year but noted that his hedge fund was performing relatively well.

Senior staff members at Freedom's Watch said they consider their efforts in several key House and Senate races to be a significant first step. "We have put out $30-million in expenditures, and that's nothing to sneeze at," said Ed Patru, the group's spokesman. "After Election Day, we'll measure our success based on the impact we've had on the issues that are important to us."

The slowdown in giving appears to have had a disproportionate impact on Republicans. Obama holds an enormous money advantage in the closing weeks of the campaign. His ads have been bolstered by mail and phone-bank efforts largely financed by labor unions. The AFL-CIO alone has directed more than $50-million to persuade its members to support Obama and other Democrats.