Major money for campaigns impacts modern political process

Posted Nov. 4, 2012

School of Communication
University of Miami

In 1896, voters in the United States were witnessing the fierce presidential election that pitted Republican William McKinley against Democrat William Jennings Bryan.

In order to help fund McKinley’s path to the presidency, Republican campaign manager Mark Hanna threw out the old playbook of simply asking office holders to contribute a portion of their paychecks to the party.

Instead, he approached financiers and industrialists and made a business proposition: Money would help his candidate fund a successful campaign, so how badly did they not want Bryan in office?

Using this strategy, Hanna was able to raise $3.5 million for McKinley’s campaign, spending five times as much as the Democrats. McKinley went on to win 271 electoral votes to Bryan’s 176.

Flash-forward to 2008. By the end of that year, Barack Obama had raised a record $745 million on his way to becoming president. By becoming the one of the first major-party candidates to decline public financing since the system was put into place in 1976, Obama was not constrained by any spending limits. He ended up winning the election, 365 electoral votes to John McCain’s 173. Hanna’s model for running a successful campaign continues to display its usefulness 112 years after it was developed.

The importance of finances during campaigns has created a system that requires millions of dollars to obtain a federal political office. This does not sit right with many people, including Colin McKee, a sophomore at the University of Miami who identifies himself as a Romney supporter.

“I don’t like that fact that it costs so much to run for office because it eliminates the number of people that can actually afford a campaign and run for office,” McKee said. “I’m sure there’s tons of people out there more suited than Mitt or Barack that don’t have the money to fund a campaign and wouldn’t ever be able to get themselves in front of all the people to ever win the office.”

In 2010, the Supreme Court oversaw a case that involved a corporation attempting to air a critical film of Hillary Clinton in Citizens United v. Federal Election Commission. By a 5-4 vote, the Court ruled that corporations and unions are allowed to make direct political contributions.

“Essentially we’re in a free for all right now. For anyone who wants to spend any amount of money, whether that’s fifty cents or $5 million or $50 million, there’s effectively a way for them to do this without any limitation,” said Chris Mann, a political science professor at the University of Miami. “If they’re willing to disclose who they are, they can do whatever they want.”

The presidential election of 2012 brings on new challenges for incumbent Barack Obama in the form of challenger Mitt Romney, a businessman who is the former governor of Massachusetts. As election day pulls to within a month, analyzing campaign contributions of the two candidates shows both how they get the money to run costly campaigns as well as what groups would benefit if they were in office.

Obama had raised $432,197,459 for his 2012 campaign, according to Federal Election Commission reports that were released on Oct. 1. The Center for Responsive Politics, a non-profit organization that tracks the effects of money and lobbying on elections, organizes raw data into useful information on their website According to this database, the top institutional contributors to Obama’s campaign are the University of California ($706,931), Microsoft ($544,445), Google ($526,009), Harvard University ($433,860), and the U.S. government ($389,100).

It is important to note that the organizations themselves are not donating the money, but rather the organizations’ political action committees (PACs), individual members, and individual members’ immediate families. Most of Obama’s top contributors are universities and communication companies.

“If you look at any candidate, they tend to draw a disproportionate share of their contributions from the industry in which they used to work,” Mann said. “Obama was a law professor. We forget this because he was a senator, but his last non-elected official paycheck was being a law professor at the University of Chicago.”

Romney, on the other hand, has been able to raise $279,343,000 on his journey to become president. His top contributors are Goldman Sachs ($891,140), Bank of America ($668,139), JPMorgan Chase & Co. ($663,219), Morgan Stanley ($649,847), and Credit Suisse Group ($554,066).

Nivine Afiouni, a reporter for Sky News Arabia who is covering the presidential election, says that banking and investment companies are Romney’s biggest supporters for a reason.

“They would gain more laws that would be in favor of their business,” Afiouni said.

A head-to-head comparison of the two candidates helps offer further insight into their campaigns. The states that have contributed the most money to Obama’s campaign are California, New York, Illinois, Massachusetts and Texas.

Meanwhile, the states that have financially supported Romney the most are California, Texas, Florida, New York, and Virginia. Surprisingly enough, both candidates have a lot of money coming in from states that are known to vote for the opposing party in elections, such as Texas for Obama and New York for Romney. Additionally, Obama was able to raise more money Massachusetts, the state where Romney served as governor from 2003 to 2007.

“Even in a blue state like New York, it’s a blue state, but it’s 60-40 and that makes it a heavily blue state. Texas is 60-40 the other way,” Mann said. “There are plenty of rich Republicans in a heavily blue place like New York City. There are plenty rich Democrats in a heavily red state in Houston or Dallas.”

Additionally, even though candidates raise money in a certain state does not mean that money will be used within the state. For example, Obama might be able to raise money in a heavily red state such as Utah, but would probably use the money on a swing state such as Ohio.

“Where the money comes from and where it goes to is very different,” Mann said.

Looking at the candidates’ source of funds reveals more differences of how they go about collecting campaign contributions. Nearly all of the money that Obama has raised comes from individual contributions, with about 38 percent coming in the form of small individual contributions and 63 percent being large individual contributions.

While Romney also relies primarily on individual contributions, his breakdown is a little bit different. Roughly 17 percent of all contributions have been small individual contributions while 76 percent have been large individual contributions. The numbers show that Obama relies a lot more on small donations than Romney does.

“I know that [Romney] has a lot of business with rich men and businessmen, and he has a lot of investments,” Afiiouni said. “Obama is just an academic. He’s not a businessman.”

Another way that contributions can be organized is by sector, such as defense, health and transportation. Some of the areas that Romney has an advantage in are finance, insurance and real estate, agribusiness and construction. Obama gets a larger portion of funds from the communications / electronics, lawyers and lobbyists, and ideological / single-issue sectors.

While the candidates appeal to different sections of society and rely on them to fund their campaigns, one thing remains clear: it is absolutely essential to have money in order to run for a powerful political office. As Nov. 6 draws near, Obama and Romney will be doing their best to convince the American people that they are best to run the country by spending money in their attempt to land in the White House for the next four years.

Leave a Reply