Obama Campaign - Flood of Washington Money in Iowa

Heading into the final stretch before the Iowa caucuses, millions of dollars in third party spending are pouring into the state in an unprecedented attempt to benefit the campaigns of John Edwards and Hillary Clinton.  For Clinton, AFSCME, EMILY’s List and the AFT have spent over $2.6 million to assist her campaign – even as AFSCME attacks Obama for a position on health care mandates that they themselves have.  The groups supporting Edwards have spent over $2 million including efforts organized by one “independent” organization run by one of Edwards’ highest-ranking political aides which newspapers reported today received a questionable 11th-hour donation of $495,000 just days ago.

We have both the financial and organizational resources to compete aggressively in all four early states and through February 5th.  However, there is no doubt that the size of the spending and its underhanded nature deserve further scrutiny.

John Edwards



John Edwards, who is running in large part on a recently adopted campaign platform of taking on the big corporate interests inWashington, is relying on a former aide to run an unregulated 527 operating outside campaign finance limits to support his candidacy.   Even as he was decrying such influence last week, his former campaign manager was spending $750,000 on television ads in Iowa. If Edwards can’t stand up to his own former aides how can stand up to the special interests inWashington?

Nick Baldick, who ran his campaign in 2004 and was on the campaign’s payroll as recently as June, is now running Alliance for a New America.  The Alliance for a New America has spent $1.5 million to help Edwards in Iowa,while the group Working for Working Americans, funded by the Carpenters Union, has spent more than $500,000 supporting Edwards, bringing the total spent on his behalf in Iowa to $2 million.  

In their most recent financial disclosure, the Alliance for New America revealed that they had raised $495,000 from Oak Springs Farms, LLC. Oak Springs is funded through the assets of Rachel Mellon, who is 97-years old.  According to the available records, which go back to 1980, she has never donated to a political candidate until a contribution was made in her name to John Edwards this year.  Mellon's involvement in the decision to donate to the Edwards campaign is unknown. The Washington Post reported yesterday that Alexander Forger, who has power for attorney for Mrs. Mellon, is a major supporter of John Edwards’ candidacy. Crain's Business Journal reported in February that Forger and "a group of prominent New York lawyers" hosted a fund-raiser for Edwards at Essex House -- the Central Park South address where his office is located. Forger has also personally donated $4,600 to Edwards' campaign, according to FEC records.   This is not the first time Forger has used Oak Springs Farms to support Edwards; in 2006, he made a $250,000 contribution to Edwards’ One America 527 group.

While Edwards has said he doesn’t want this group to run ads, he has not called his former employee and friend and asked him not run these ads.  And according to the New York Times, this group was started after consultations with Edwards’ campaign manager and other senior members of the campaign.

These latest revelations make it clear why Edwards was able to announce that he could accept public funds while still spending all he needed to spend in Iowa. His campaign simply exploited the biggest loophole in the campaign finance system in order to get public matching funds while arranging through allies to benefit from a 527.  That’s how they avoided the spending limits that are a condition of the public matching funds.

When John Edwards applied for matching funds, he agreed to spending limits in return for the public money he is now receiving. But at that time, the Edwards campaign was actively involved in discussions about the establishment of an “independent” 527 effort, to be conducted outside the federal financing requirements.  Members of the SEIU, which is funding the 527 that has spent the vast majority of the money in IA on his behalf, described consultations with senior Edwards staff and a visit to the campaign in Iowa, all intended to assure that the project delivered “the specific sort of support they’d [the Edwards campaign] like to see from us.”

Within weeks, the Alliance for a New America, a 527 group organized just to boost Edwards' last-minute media spending in Iowa,came into existence.  The group portrays itself as an issue advertising group, able to operate outside the legal restrictions of the federal campaign finance laws.  Its goal is to help Edwards, who is specifically promoted in its advertising. Consistent with the close coordination envisioned by the planners, key individuals involved in this organization and steering its activities are close associates of the Edwards campaign.

Hillary Clinton



Of all of the candidates and interests groups participating in this campaign, the American Federal State County Municipal union (AFSCME) is running perhaps the most negative and misleading campaign. To date, they have spent $1.3 million on radio ads and direct mail– with over $300,000 spent on negative ads targeting Obama – and are reportedly readying a negative television campaign against Obama.

The ads have mischaracterized Obama’s universal health care plan. AFSCME has attacked Obama’s plan for not including an individual mandate, when it is the official position of AFSCME to oppose an individual mandate.  The President of AFSCME testified at a Congressional hearing in 2006 that “we are concerned with the direction reform efforts have taken in some states.  For example, the Massachusetts reform model attempts to achieve near universal coverage through the use of individual mandates.” 

Clinton also has benefitted by spending from Emily’s List and the AFT, who have spent $485,777.43 and $799,618.59 respectively on her behalf.

This unprecedented level of outside spending could impact the outcome in Iowa and New Hampshire, and we believe voters in these states deserve to know exactly how much is being spent, where it’s coming from, and who’s benefiting.



AFSCME: $1,333,456.96(includes $309,545.60 explicitly against Obama)

AFT: $799,618.59

Emily’s List: $485,777.43

Total: $2,618,852.98


Working for Working Americans/Carpenters: $526,440.76

Alliance for a NewAmerica (SEIU): $1,530,411.77 (this includes $769,000 that has not formally posted)

Democratic Courage: $20,410.00

Total: $2,077,262.53