Barack Obama signals U-turn on funding as Republicans rake in money

President Barack Obama has signalled a major rethink over the use of so-called “Super PAC” money in his re-election bid.

In an e-mail to supporters, Mr Obama’s campaign team said it would now encourage wealthy fundraisers to gift large sums to outside groups supporting the White House incumbent.

The president has in the past repeatedly warned against the growing influence of money in politics and in particular the dangers of super political action committees, or Super PACs.

The fundraising entities are the result of a 2010 Supreme Court ruling that scrapped limits on the amount that corporations, unions and individuals can donate during campaigns.

Officially known as “independent expenditure only committees”, Super PACs can accept unlimited sums from wealthy benefactors wishing to influence the outcome of an election.

They have to be run separately from a candidate’s official campaign, but critics claim the lines are so blurred the distinction is meaningless.

Last week, the impact that Super PACs were already having on the race for the Republican presidential ticket was revealed. Filings to the Federal Election Commission showed that Restore Our Future, set up by supporters of former Massachusetts governor Mitt Romney, raised more than $30 million in 2011.

That figure was dwarfed by the combined coffers of two Republican Super PACs formed with the support of Karl Rove, formerly an adviser to president George W Bush. American Crossroads and Crossroads GPS have amassed a war-chest of $51m to fight Mr Obama’s re-election bid.

In comparison, the major Democratic Super PACs managed to raise $19m. This lop-sided spend capability has seemingly spooked the White House in reversing its stance on Super PACs.

Jim Messina, Mr Obama’s campaign manager, criticised the Supreme Court’s ruling, stating that it had “accelerated a dangerous trend towards a political system increasingly dominated by big-money interests”.

But he added that the funds amassed by Mr Obama’s Republican opponents had led to a “real risk” that the work of pro-Obama campaigners could be “destroyed by hundreds of millions of dollars in negative ads”.

He added: “We can’t allow for two sets of rules in this election, whereby the Republican nominee is the beneficiary of unlimited spending and Democrats unilaterally disarm.”

Thus Mr Messina gave the campaign’s blessing to Priorities USA, a Super PAC set up to boost Mr Obama’s campaign.

Neither the president himself nor vice-president Joe Biden will be part of the drive to boost the funds of the Super PAC. But senior White House officials will attend Priorities USA functions as part of the fundraising effort.

The decision has set the stage for America’s super-rich to play an influential role in the presidential race, as figures from the Republican Super PACs show funds are amassed from a few wealthy benefactors.

Former House speaker Newt Gingrich’s campaign for the Republican nomination has been kept afloat by millions of dollars donated to his Super PAC by casino magnate and pro-Israeli lobbyist Sheldon Adelson. The top four donors to Restore Our Future, which backs Mr Romney, are hedge fund managers.

The growth of Super PACs has also led to an increase in negative advertising – much of it on so-called “attack ads”.

The decision by the Obama campaign to reluctantly embrace Super PACs was greeted with accusations of hypocrisy by his political opponents.

Jonathan Collegio, a spokesman for American Crossroads, said: “This is a brazenly cynical move by Barack Obama and his political handlers, who had the chutzpah to call outside groups a threat to democracy.”