Maryland isn’t considered a “battleground” state in the presidential election, but some Maryland companies still are pulling in thousands — even millions — of dollars in campaign money.
And they can thank two 2010 higher court rulings that opened the door to increased contributions from business executives, companies, unions and individuals.
The largest beneficiary in the state, according to searches of Federal Election Commission records, is Mentzer Media Services. The Towson consulting firm that places political ads received more than $75 million this year from “super” political action committees that generally favor Republican presidential candidate Mitt Romney and oppose President Barack Obama (D), federal records show.
Bruce Mentzer, president of Mentzer Media who founded the company in 1991, did not return a call and email seeking comment. He does not generally speak to the media, an assistant with the business said.
The super PACs that have showered millions on Mentzer Media include Restore Our Future, operated by former Romney aides; and Crossroads Grassroots Policy Strategies, led by a deputy labor secretary under former President George W. Bush.
Both of those super PACs formed in 2010 in the wake of the Citizens United ruling by the U.S. Supreme Court and the SpeechNow.org ruling by the federal Court of Appeals for the D.C. Circuit that allowed greatly expanded contributions to PACs that did not directly fund or coordinate activities with candidates and political parties. But the super PACs still find ways to support their candidates, such as by funding attack ads against opponents, critics say.
Those court rulings paved the way for the boost in television political ads seen in Maryland and nationwide, said Paul S. Herrnson, director of the Center for American Politics and Citizenship and a government and politics professor at the University of Maryland, College Park. Nationally, total spending on political advertising this year could hit $3.3 billion, some 57 percent higher than in 2008, according to Kantar Media's Campaign Media Analysis Group of New York.
“I’m not surprised at the level of spending,” Herrnson said. “What has happened is a direct result of those rulings.”
501(c)4 groups also rise
Mentzer Media this year also took in millions of dollars from Americans for Prosperity, a 501(c)4 political advocacy group co-founded by billionaire businessman David Koch in 2004; and American Crossroads, a 527 group co-founded by Republican strategist Karl Rove in 2010 that spun off the Crossroads GPS super PAC.
The 501(c)4 groups are tax-exempt nonprofits organized under section 501(c) of the Internal Revenue Code that can engage in political activities as long as that is not their primary purpose; they don’t have to disclose donors’ identities. The 527 groups are tax-exempt organizations under section 527 of the Internal Revenue Code that can raise money for political activities and must file regular disclosure reports only if they are political action committees supporting or opposing federal candidates.
Other Maryland companies that have received work this year from American Crossroads include BlueFront Strategies, an Oxon political consulting business owned by consulting firm DDC Advocacy that received more than $300,000; and Lanham computer services company Capitol Computer Experts, which took in more than $80,000, according to federal records. Neither company could be reached for comment.
On the other side, Priorities USA Action, which formed in 2011 as a super PAC to support Obama, has not funneled as much to Maryland companies this year, according to a search of more than 100 pages of the committee’s expenditures. Among businesses that have received work are Rockville insurer the Novick Group, with more than $45,000; Rockville high-tech business SysArc, more than $5,000; and Gaithersburg copier distributor High Volume Associates, more than $2,000.
Broadcast companies seeing boost
Broadcast companies such as Sinclair Broadcast Group in Hunt Valley are raking in substantial sums from the political ads.
Sinclair, which owns and operates 74 television stations in 45 markets, including Fox 45 in Baltimore, took in $11.4 million in political advertising spending in this year’s second quarter, almost tripling executives’ expectations of about $4 million. More than half of the spending was in three states — Ohio, Florida and North Carolina, COO Steven Marks said in a recent conference call.
That helped net broadcast revenues jump 38 percent from 2011’s second quarter to $220 million and net income leap 63 percent to $30.1 million.
Political ad revenues in the third quarter could reach $23.5 million, and such revenues would be 85 percent greater in the first nine months of 2012 over the same period during the 2008 elections, Marks said.
“We are dealing at never-before-seen levels” of political spending, he said.
The rise of super PACs in the past two years is a key factor to such increases, media analysts say.
“I suspect the Citizens United ruling has something to do with that,” said John Morton, president of Silver Spring media consulting company Morton Research.
Newspapers aren’t major beneficiaries of political ad spending, although companies with both television stations and newspapers are seeing strong revenues from political ads, Morton said.
Putting more records online
Broadcast companies with ABC, CBS, Fox and NBC affiliates in the top 50 media markets are now required to upload files related to political advertising to a Federal Communications Commission website. Previously, stations were required only to maintain files in paper form for public review at their offices.
The FCC plans to make all television stations subject to the rule by 2014. Radio stations and video distributors are exempt, pending review by the FCC.
That exemption has the National Association of Broadcasters in Washington, D.C., challenging the online access. Spokesman Dennis Wharton said in a statement that “it is fundamentally unfair for local television stations to be the only medium required to disclose on the Internet sensitive advertising rate information.”
Television stations rarely fact-check the issues raised in political ads they run, Timothy Karr, senior director of strategy for Washington, D.C., media watchdog group Free Press, said in a recent report.
“The rules requiring disclosure during election years have been manipulated to ensure that corporate broadcasters get rich from political ads ... without having to fully account for the sources of this money,” Karr said. “It’s a system that serves viewers and voters very poorly.”
The reason so much money is being spent on ads is that “it’s a proven formula for success,” he said. The candidate who spent more on a campaign for a congressional seat in 2008 won the race more than nine out of 10 times, according to the Center for Responsive Politics.
“Spending on negative ads is particularly effective,” Karr said.
The ballot issues in Maryland, such as Question 7 involving expanded casino gambling, also have pumped funds into local businesses.
“It’s not a major increase,” said Mark Weiss, owner of Mark Weiss Associates in Bethesda, which has received more than $15,000 this year for yard signs, buttons, bumper stickers and T-shirts from Marylanders for Marriage Equality, according to state election records. That committee supports Question 6, which would allow same-sex marriage.
“We haven’t seen much from super PACs,” Weiss said.
Local executives in giving mood
Some Maryland business executives continue to give hundreds of thousands of dollars to super PACs.
J.W. Marriott Jr., executive chairman of Bethesda hotelier Marriott International, and his brother Richard E. Marriott, board chairman of Bethesda lodging real estate investment trust Host Hotels & Resorts, each donated $500,000 to Restore Our Future this year, according to federal records. The Marriotts also each gave $500,000 to the pro-Romney super PAC last year.
Stewart Bainum Jr., chairman of Silver Spring hotel franchiser Choice Hotels International, gave $500,000 this year to Priorities USA Action. Peter Angelos, a lawyer and majority owner of the Baltimore Orioles, also donated $500,000 to the pro-Obama super PAC.
Whether super PACs and other committees will continue to rake in and spend more cash depends on the results organizers and donors of these groups obtain, Herrnson said.
“Their contributors will want to see if there is any return,” he said.