Newly lax campaign finance laws have politicians on edge over the amount of fundraising they will need to do before heading into the 2012 elections, a leading energy lobbyist said today.

Members of Congress are worried about the amount of money they must raise to fend off outside groups whose political campaign spending was untethered following a Supreme Court ruling last year, said Anthony Kavanagh, senior vice president for government affairs at American Electric Power Co. Inc. Kavanagh lobbies for AEP, which has coal, natural gas, oil, nuclear and renewable generation in 11 states.

"Quite frankly, it's causing greater fracturing in how members operate, how much time they spend fundraising," Kavanagh said yesterday during an event hosted by the Committee for Economic Development (CED), a group pushing for reform of disclosure laws and urging corporations to limit their campaign spending. "I think it undermines the progress we need to make here in Washington, and it's clear we have a lot of progress to make."

Anxiety has increased in the wake of the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, Kavanagh said.

The court ruled 5-4 in January 2010 to allow corporations and labor unions to use their general funds to pay for campaign advertising and to do it right up to Election Day (E&E Daily, Jan. 22, 2010).

The court ruled that corporations have a free speech right to spend unlimited amounts of money on television and radio ads in support of candidates. The decision also paved the way for the creation of so-called Super PACs, independent political action committees that can raise unlimited funds from corporations, unions and individuals and use that money for direct attacks on candidates that were previously not permitted.

Green groups and Democrats have already predicted an onslaught of campaign spending by the energy industry to bolster Republican campaigns (E&E Daily, Sept. 15).

Prior to the ruling, companies could only dip into PAC funds, hundreds of thousands of dollars that employees voluntarily contribute each year, said Meredith McGehee, policy director for the Campaign Legal Center. But corporations, including energy companies, can now pledge money through 501(c)(4) groups that are not required to provide donor information, McGehee said.

"The problem is these C4 groups are being able to take the money and there's no disclosure," she said. "They are doing independent expenditures, but they are claiming they don't have to disclose where the money is coming from because they're a lobbying organization, they're not principally political."

The CED -- a group of business leaders and university professors -- yesterday released reports that found large amounts of undisclosed money to political groups that began entering the political system last year will only increase throughout the 2012 elections and lead to more scandals without reform. "In fact, political committees and organizations reported spending $298 million in the 2010 congressional races, or four times more than they reported spending in the 2006 elections," CED said.

The group is calling on corporations and their executives to refuse to participate in unlimited corporate campaign spending and instead put the money toward job creation and managing businesses.

"The 2012 election is expected to be the most expensive in history -- and it will also be the first presidential campaign in the wake of the Supreme Court's Citizens United decision, which reversed a generation of reforms and opened the door to unrestricted expenditures," the group said.

Congressional election and independent policy groups spent nearly $600 million in 2010, a 40 percent increase from 2008 estimates, and about half of the money was kept hidden from public view, CED said.

Corporations should disclose what money they contribute to third parties and subject the money to board approval and oversight, and Congress should reform laws to disclose electioneering activities, the group said (a disclosure bill narrowly passed the House last year but stalled in the Senate). CED is also pushing states to end the election of judges and adopt a nonpartisan, independent, commission-based system for recruiting, reviewing and recommending appointees for judgeships.