Outside Spending Impacts 2010 Elections in N.C.

North Carolina FreeEnterprise Foundation

North Carolina's political environment changed dramatically on Election Day 2010. Few observers would dispute the historical significance of this year's elections. After all, the Republican Party gained control of both chambers of the General Assembly for the first time since Reconstruction - and by impressive margins. What has not been discussed as much, however, is the significant role that outside spending played in a highly competitive and hard-fought election season, and its likely future impact on electoral politics in The Old North State.

Throughout the 2010 election cycle, the North Carolina FreeEnterprise Foundation has actively monitored and tracked the reporting of electioneering communications and independent expenditures filed with the State Board of Elections. Based on our review of the public data currently available, the NCFEF has determined that well over $2.3 million was spent by outside groups in state legislative races during 2010. (This does not include a reported $200,000 the State Employees Association of North Carolina spent in House District 81 in opposition to House Majority Leader Hugh Holliman (D), which has yet to be filed with the State Board of Elections.)

These funds were spread among 34 legislative campaigns, and the bulk of it (over 90 percent) was spent to the benefit of Republican candidates. (Click on the image at right to download a spreadsheet listing reported electioneering communications and independent expenditures in state legislative races during the 2010 elections.)

Six groups in particular utilized electioneering communications or independent expenditures in North Carolina legislative contests: Real Jobs NC, Real Facts NC, Civitas Action, Americans for Prosperity, Driving NC Forward (NC Automobile Dealers Association), and NC Homeowners Alliance (NC Realtors Association). The investment of these groups ranged from just over $80,000, spent by the NC Homeowners Alliance, to approximately $1.5 million, spent by Real Jobs NC. Instead of attempting to describe the nature and purpose of these organizations, we have provided links to their websites above.

Of course, these are not the only organizations involved in legislative campaigns this election cycle. Following more traditional methods, Political Action Committees (PACs) affiliated with trade associations, businesses and other interests contributed considerable sums to legislative candidates, as did the state's two major political parties. However, with the expanded free speech rights recognized by the U.S. Supreme Court in the January 2010 Citizens United v. Federal Election Commission decision, a special focus on the growth of electioneering communications and independent expenditures in North Carolina is warranted. (In Citizens United, the High Court determined that corporations, trade associations, unions and the like could spend general treasury funds to expressly support or oppose the election of a political candidate, as long as those efforts are not coordinated with a candidate, a candidates committee or a political party.)

The North Carolina FreeEnterprise Foundation will be conducting an extensive and comprehensive study and analysis of campaign finances and PAC activities during the 2009-2010 Election Cycle once 4th Quarter campaign finance reports are filed.

A Closer Look At Outside Spending:

In terms of electioneering communication and independent expenditures, of the 34 districts where outside money was spent, six districts were targeted by groups supporting both the Democratic and Republican candidates: House 3, Alice Underhill (D) v. Norman Sanderson (R) v. Herb Sobel (L); House 81, Hugh Holliman (D) v. Rayne Brown (R); House 93, Cullie Tarleton (D) v. Jonathan Jordan (R); Senate 24, Tony Foriest (D) v. Rick Gunn (R); Senate 47, Joe Sam Queen (D) v. Ralph Hise (R); and Senate 50, John Snow (D) v. Jim Davis (R). In these six districts where outside groups spent money on behalf of both Democratic and Republican candidates, the groups supporting the Republican significantly outspent the opposing side in every race. In all six of these districts, voters selected the Republican challenger over the Democratic incumbent.

The outside groups that invested significant sums to the benefit of Republican candidates (primarily Real Jobs NC, Americans for Prosperity and Civitas Action) spent money in 29 districts, and the GOP won 22 of these races - a nearly 76 percent win rate. Of the seven targeted races won by Democratic incumbents, (Senate District 1 and House Districts 1, 9, 22, 44, 45, and 54), all but two - the seats held by Sen. President Pro Tempore Marc Basnight (Senate District 1) and House Speaker Joe Hackney (House District 54) - were won with less than 53 percent of the vote. In fact, three of these races (House Districts 9, 44 and 45) were decided by less than 350 votes. Furthermore, in four of these seven districts (Senate District 1 and House Districts 1, 9 and 54), only one expenditure was made by outside groups, indicating these races were not top targets.

The infusion of mailers, phone banks, and/or television and radio ads in at least four districts may have pushed the GOP challenger over the victory line. Senator-elect Jim Davis (R) in Senate District 50 and Representatives-elect Jimmy Dixon (R) in House District 4, Harry Warren (R) in House District 77, and Jonathan Jordan (R) in House District 93 all won by less than 1,000 votes and undoubtedly benefitted from outside spending that either supported them or opposed their opponent. In a number of other races, these efforts likely helped to widen the margin of victory.

While it may be hard to quantify the exact impact spending by these outside groups had on the final outcome of the 2010 legislative elections in North Carolina, it would be hard to argue that their involvement didn't play an important role. As a result, we can only expect to see more activity by outside groups in future elections.

NOTE: The State Board of Elections has defined both electioneering communications and independent expenditures in detail on their web site here. In brief, an electioneering communication is a form of communication that refers to a candidate within 60 days of a general election and does not expressly advocate for the election or defeat of the candidate. An independent expenditure is an expenditure made to expressly support or oppose the election of a candidate and is not coordinated with the candidate, the candidate's committee or a political party.

Sincerely,