Never Mind Super PACs: How Big Business Is Buying the Election

2 Sep

Though much media attention has been heaped on Super PACs—the new political action committees that can take unlimited contributions from nearly any source, such as Mitt Romney’s Restore Our Future—they haven’t caught fire within corporate America owing to their monthly (in some cases, quarterly) disclosure requirements. Most donations to Super PACs are from wealthy individuals, such as casino magnate Sheldon Adelson, making them not so different from the so-called 527 groups that proliferated in the immediate wake of McCain-Feingold. Among the eight largest Super PACs active during the Republican presidential primaries, 86 percent of their funding came from individuals, not corporations.

The real tsunami in corporate spending has come from nonprofits, in particular trade associations, which are classified as 501(c)(6) organizations under the tax code and are virtually fully funded by corporate cash. In 2010, 501(c)(6) trade associations and 501(c)(4) issue-advocacy groups outspent Super PACs $141 million to $65 million, according to the Center for Public Integrity and the Center for Responsive Politics.

After Citizens United, trade associations quickly moved to augment their traditional PAC spending with secret corporate cash. Take the Pharmaceutical Research and Manufacturers of America, the pharmaceutical industry’s trade association. In 2008, PhRMA spent less than $200,000 on federal elections, using only money bundled from transparent individual contributions, mostly from drug company executives. The following election cycle, after Citizens United, PhRMA spent $10.36 million on federal elections, 98 percent of it from undisclosed corporate sources.

Likewise, the shift allowed the National Association of Realtors, already a heavy hitter when it came to PAC spending, to unleash an additional $1.1 million on federal elections from undisclosed real estate companies in 2010.

“What Citizens United has done, it has wholesale changed the landscape,” said Stefan Passantino, a partner at the law and lobbying firm McKenna, Long & Aldridge and a former Newt Gingrich campaign adviser. He was addressing a seminar in Atlanta, Georgia, on corporate political engagement in the 2012 election cycle. He recounted advising one corporate client on how to “engage in an issue where we’re not popular,” in this case to preserve certain tax loopholes. Passantino said businesses have enormous new opportunities for influencing elections without being detected. “We gotta keep our corporate logo out of the bull’s-eye,” he added.

via Never Mind Super PACs: How Big Business Is Buying the Election.

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