In the days leading up to the Sept. 11 primary, a Manchester-based political action committee called New Hampshire Republicans for Freedom and Equality launched a direct-mail campaign to support the re-election of 40 Republican House members who helped turn back efforts to repeal the state's same-sex marriage law.
The campaign was funded almost exclusively by out-of-state donors, including $100,000 from Paul Singer, a New York hedge-fund manager. Until recently, Singer's donation would have violated a state statute that limits individual campaign contributions to $7,000.
But, just a few weeks earlier, the state Attorney General's office advised election officials that, based on recent court rulings, New Hampshire could no longer enforce those limits, opening the door for independent political groups to spend unlimited amounts of money on behalf of state candidates.
While 29 of the candidates supported by NHRFE won their primaries, it's hard to say what impact, if any, the group's spending had on the outcome. But NHFRE's activities illustrate how the traditional flow of money in politics has shifted away from spending by the candidates themselves to third-party political groups that can spend at will.
Fergus Cullen, former chair of the New Hampshire Republican Party, says statutory limits on individual contributions means candidates cannot raise enough money in a general election. So they rely on well-funded independent groups to carry them through to November.
"Cash on hand for candidates doesn't matter nearly as much as who their outside friends are, as they can spend as much or many times more than the candidates can on their own," Cullen says. "New Hampshire's finance rules incentivize donors who want to make a real difference to give not to candidates but to these outside groups."
Indeed, less then seven weeks before the November 6 election, New Hampshire has become a magnet for outside political cash, especially the gubernatorial race between Republican Ovide Lamontagne and Democrat Maggie Hassan.
The Governor's Race
According to the most recent campaign reports, Lamontagne has a significant cash advantage over Hassan. Both candidates raised and spent more than $1 million to defeat their primary opponents. But Lamontagne kicks off the general election campaign with $258,000, more than 15 times the $16,395 Hassan has on hand.
Spending by independent groups on behalf of both candidates began before the polls closed on primary day.
The Republican Governor's Association contributed $525,000 to its New Hampshire affiliate, the Live Free PAC, on Sept 11. Two days later, the PAC launched a television ad taking aim at Hassan's record in the state Senate.
The Democratic Governors Association countered with a 30-second spot that links Lamontagne to the Tea Party's "extreme" views on Medicare, abortion rights and same-sex marriage.
The ad was produced by a DGA-affiliated PAC called the New Hampshire Freedom Fund, which has yet to register as a political committee with the Secretary of State's office or disclose its receipts and expenditures. But, according to television station contracts filed with the Federal Communications Commission, the ad buy cost the group more than $317,000.
Kathy Sullivan, former chair of the state party and a co-chair of the Hassan campaign, said the DGA will be the source for most of independent expenditures aimed at Democratic gubernatorial voters this year. The group contributed more than $394,000 to the New Hampshire Democratic Party during 2010 election, and its most recent financial disclosure, filed in June, showed the DGA with about $1.7 million.
The country's largest public-sector union will also spend generously on Hassan's behalf. According to FCC filings, the American Federation of State, County and Municipal Employees is bankrolling $360,000 worth of television ads that will target voters in the governor's race right up to election day.
It will nonetheless be difficult for Democrat-aligned groups to keep pace with well-funded conservative organizations that have already invested tens of millions of dollars in election ads in key battleground states like New Hampshire.
Out-of-State Conservative Groups Play a Role
American Crossroads, the conservative super PAC founded by Karl Rove, has yet to target New Hampshire's gubernatorial race. But the group and its non-profit affiliate Crossroads GPS have bankrolled more than $7 million in ads aimed at Granite State voters, according to a recent analysis by NBC News that relied on data from the ad-tracking firm SMG Delta.
That includes $335,000 for a 30-second spot running this week on local broadcast and cable stations that features small-business owners critical of President Obama's economic record.
The National Organization for Marriage, which spent an estimated $1.5 million in New Hampshire during the 2010 election, will likely make its presence felt again this year. After a bill to repeal same-sex marriage failed last spring, the group vowed to tap its nationwide donor base for $250,000 to support conservative candidates.
On the other side of the issue, Christine Baratta, spokesperson for New Hampshire Republicans for Freedom and Equality, says the group is not yet ready to announce "strategic decisions" for the general election. But a national PAC called Freedom to Marry plans to spend $3 million this fall in five "marriage battleground" states, including New Hampshire.
Sullivan acknowledges that, from the presidential race on down, Republicans have more deep-pocketed donors than Democrats. But, she says, "Democrats don't need a lot of money, just enough to get the message out and trust that at some point the volume of ads become subject to the law of diminishing returns."
Whether potential voters respond to the steady barrage of political ads or simply tune them out, they are an important tool in close races. And, at the moment, the contest to replace retiring Democratic Gov. John Lynch — already one of the most closely watched state-level contests in the country — is a toss up.
Lamontagne has a slight lead over Hassan, 47 percent to 46 percent, with two percent for Libertarian candidate John Babiarz, according to a poll released this week by the independent American Research Group. Five percent of the poll's respondents were undecided.
The same poll has President Barack Obama and Republican Mitt Romney in a statistical dead heat for the Granite State's four electoral, meaning both candidates will continue to spend significant sums of money to attract voters.
Political analyst Dean Spiliotes says much of that advertising will also try to rally support for candidates lower on the ticket.
"With a presidential race, you have a discourse that's reflected at every level, and New Hampshire is a key battleground for a number of ideas being fought around the country," Spiliotes says. "The governor's race in particular, because of the Tea Party groups and because of more progressive groups concerned about the conservative social agenda, will bring in a lot of outside money, but there will be overlap at every level."
That includes the New Hampshire congressional seats up for grabs this year. U.S Rep. Charlie Bass, who is locked in a tight race for the Second District seat with Democratic challenger Anne Kuster, has been targeted by two independent groups.
Friends of Democracy, a super PAC formed by the son of financier George Soros, announced a $700,000 ad campaign against four House members, including Bass. The ads attack the incumbent for taking thousands of dollars in campaign contributions from special interests, including the oil and gas industry.
Earlier this week, the House Majority PAC released an ad that criticized Bass for expressing support for Rep. Paul Ryan's budget plan. According to the PAC, the blueprint by Romney's running mate would "gut" Medicare in order to pay for tax cuts for the wealthy. The ad will run on Manchester broadcast and Boston cable stations for two weeks at a cost of $440,000.
Spiliotes says the cost of running for other state offices has grown steadily in the last two decades. The average campaign for state Senate and Executive Council races is relatively modest — about $35,000 for the Senate and $46,000 for Executive Council — but there are candidates who can raise and spend significantly more than their opponents.
This year, two candidates for Executive Council have raised well over $100,000. According to campaign reports filed this week, District 2 candidate Democrat Colin Van Ostern has more than $90,000 in the bank, compared to his Republican opponent, Michael Tierney, who has less than $1,000 on hand.
District 4 Executive Council candidate Chris Pappas, a Democrat who reported more than $121,000 in contributions, including more than $10,000 of his own money, starts the general election with nearly $82,000 on hand. His Republican opponent Robert Burns has $1,272 in cash.
One state senate hopeful who has received help from beyond the state's borders is Republican District 9 candidate Andy Sanborn. He reported raising about $115,00 during the primary. That includes more than $10,000 from out-of-state supporters of Texas Rep. Ron Paul, including $5,000 from Paul's Liberty PAC.
Sanborn's opponent, Lee Nyquist, raised $100,442 during the primary, and enters the general election with a little more than $69,000 in cash.
Spiliotes says spending on lower-ticket races in New Hampshire "has changed as part of the general trend where the cost of doing business goes up at every level." While independent spending in these contests is harder to gauge, he says, "the more you get outside groups involved because campaign finance allows it, the more money there is sloshing around."