Rupert Cornwell: Relaxed rules for wealthy backers has led to a new low in negative campaigning

The result of the Super PAC has been a tidal wave of negative advertising. Regrettably, it works

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Money has always played a vital role in US elections. The rules were tightened after the 1972 election, in response to such abuses as Nixon's sinister slush fund CREEP, used among other things to pay off the Watergate burglars, by imposing limits on individual donations and introducing voluntary federal funding for campaigns. Further restrictions came in 2002, with bipartisan legislation limiting contributions of so-called "soft money", not directly linked to a candidate's specific campaign.

But those changes had modest success at best. The 2008 presidential and Congressional elections cost an unprecedented $5.3bn (£3.5bn) – and that was before the January 2010 ruling by the US Supreme Court that limits on corporate (and thus in practice individual) funding of political broadcasts violated Americans' rights to free speech. The only proviso was that such broadcasts could not be directly co-ordinated with an individual campaign. Some hope. The cash floodgates opened, and the Super PAC was born.

Under existing law, individual donations to a campaign cannot exceed $2,500 (£1,600), while ordinary political action committees are limited to $5,000. For the Super PAC however, the sky's the limit.

Each Republican candidate has one. Technically they act independently of his campaign. In practice they are funded by wealthy backers or groups of backers, and run by former staffers of the candidate – who with or without formal contact know exactly what's required.

The result has been a tidal wave of targeted negative advertising. Regrettable it may be, but negative advertising works. This truth has been demonstrated by many academic studies and by polling trends and results in actual elections, most recently last week's Iowa caucuses that began the 2012 primary season.

In early December, Newt Gingrich, the former Speaker, was surging in the polls, and took a clear lead over the generally accepted frontrunner Mitt Romney. The Romney campaign saw Mr Gingrich as their most dangerous opponent, and hit back accordingly. Or rather "Restore Our Future", Mr Romney's Super PAC, hit back, with a $1m-plus blitz of TV advertising accusing Mr Gingrich of such grievous violations of conservative orthodoxy as supporting action to counter climate change and amnesty for illegal immigrants. Mr Gingrich sank steadily in the polls, and finished a disappointing fifth on 3 January. But he is now taking his revenge.

"Winning Our Future", his Super PAC, last week received from Sheldon Adelson, a billionaire casino owner, a donation of $5m (2,000 times larger than the maximum permitted direct individual contribution to a campaign). Thus armed, "Winning Our Future" has booked $3.4m of TV time in South Carolina, a good chunk of which will be used to attack Mr Romney's controversial record at Bain Capital, the private equity firm he founded.

Super PACs, however, are not a Republican monopoly. According to the Center for Responsive Politics, 264 of them now exist, including "Priorities USA Action", which backs Barack Obama. Nor are they confined to presidential politics. In 2010, more than 300 groups not affiliated with a political party spent $266m to influence the last mid-term elections.

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