Some Democrats favor a shift to more outside campaign spending

Shaken by Tuesday’s Republican landslide, Democratic fundraisers who felt hobbled by President Obama’s hard-line opposition to outside campaign spending are now planning to do what many groups did for the GOP — funnel millions of dollars into independent political advertising and voter mobilization campaigns.

Republican-aligned groups — including the U.S. Chamber of Commerce and American Crossroads, which GOP strategist Karl Rove helped create — raised tens of millions of dollars to support the party’s congressional candidates. Such donations favored Republican candidates by more than a 2-to-1 margin.

The effort contributed to Democratic losses in several key Senate and House races, tipping the balance in such states as Illinois, Minnesota, Pennsylvania and Florida.

“We were caught flatfooted,” said David Rosen, a Democratic fundraiser based in Chicago. “There was a terrible naivete about this within the Democratic Party — and we have to address it now.”

Some veterans of past Democratic fundraising campaigns were even blunter, partly blaming the Obama White House.

“I think a lot of people engaged in ’04 and ’08 got real signals from the White House that we don’t need your big money,” said Harold Ickes, who in 2004 helped raise nearly $200 million for independent organizations supporting Democratic presidential nominee John F. Kerry.

This year, he said, “the non-party groups received no encouragement and I think basically were reading the tea leaves that said, ‘We don’t need your help.’ Which I think in a fistfight — and this is a brutal fistfight that will go into 2012 — was a very big mistake.”

There’s no guarantee that lavish outside spending would have altered the fate of Democrats this year, with near-double-digit unemployment, a moribund housing market, a feeble economic recovery and millions of angry voters looking to make a change.

But campaign strategists said the flood of spending by GOP allies — often without disclosing the names of contributors — put more races in play and pushed Democrats on the defensive early in the summer.

Dozens of wealthy Democrats are expected to debate a change in their approach this month in Washington during a meeting of Democracy Alliance, an organization of more than 100 liberal donors set up five years ago to help the left build a long-term campaign and policy infrastructure.

“We should certainly learn from what the right wing has done,” says Steve Phillips, who leads a California-based political advocacy group, PowerPAC.org, and plans to attend the gathering. “We’ve been a little overly purist in our approach in a way that we’re maybe paying a political price for.”

The growing consensus among many party strategists that there is a need to create an expanded independent expenditure effort for 2012 represents a rejection of Obama’s long-standing opposition to large-dollar outside spending.

During the 2008 campaign, Obama condemned such independent campaigns, even though he benefited from many of them.

“We will need a different playbook for 2012,” said Rob McKay, an heir to the Taco Bell fortune who now chairs the board of Democracy Alliance, who said the current party structure is not adequate.

White House spokesman Bill Burton did not say whether Obama would support a shift in strategy, but stressed that the president’s priority was disclosure.

“In the coming year, he will continue to fight for rules that compel everyone — in support of either Democrats or Republicans — to be transparent about their efforts,” Burton said.

After a Supreme Court decision in January made it legal for corporations and unions to contribute directly to campaign causes, Obama declared, “I don’t think American elections should be bankrolled by America’s most powerful interests, or worse, by foreign entities.”

In the run-up to Tuesday’s election, the White House lashed out at the U.S. Chamber of Commerce and other tax-exempt groups for spending large sums that had been donated by anonymous sources.

The high court ruling, combined with widespread voter anger this election year, resulted in a dramatic increase in spending by both parties that was expected to reach $4 billion, a record for a midterm election.

Robust fundraising by Democratic campaigns and party committees helped Democrats collect nearly as much as Republicans did overall. But when it came to the more than $300 million spent by outside groups, Republicans benefited by a margin of more than 2 to 1, according to the Center for Responsive Politics.

There is still debate within the party about whether Democrats should set up “soft money” organizations similar to the ones cofounded by Rove, American Crossroads and Crossroads GPS.

Michael Vachon, an advisor to billionaire George Soros, said it was a mistake — practically and philosophically — for the Democrats to give up the high ground on campaign finance reform to compete with Republicans and their allies.

“Their resources will always be too great because the funds come from those who are acting in their own economic self-interest. The way to respond is to change the way campaigns are funded and to require public disclosure of funders,” Vachon said.

The beginnings of a return to independent fundraising by Democrats began to take seed this year, when party veterans set up two organizations to help Democrats raise big donations. America’s Families First spent $10 million supporting individual House candidates. Commonsense Ten spent at least $4 million, mostly on Senate races.

Both were set up as “super PACs,” a new type of campaign organization that can collect unlimited donations, but must disclose the sources of contributions. That model could allow Democrats to skirt one of Obama’s key complaints: that the public does not know who is behind much of the outside money.

“The question we have to ask ourselves is, can we do right by the causes and constituencies we claim to represent by unilaterally disarming on the financial side?” asked Jim Jordan, media strategist for Commonsense Ten.

“I think taking a look at the actual dollars spent in these races will bring some real sobriety to the people who lead the party.”

tom.hamburger@latimes.com

matea.gold@latimes.com