Rules of the Game: Debate Over Corporate Spending Spans Parallel Universes

Posted July 6, 2012 at 5:08pm

Are big corporations taking over American elections? It depends whether you ask liberals or conservatives, who can’t even agree on the basic facts.

In the liberal universe, big corporations have swallowed politics. Common Cause President Bob Edgar summed up this version of reality at a press conference in March, declaring: “We, the people, will not stand idly by while the country’s major corporations use their massive wealth to buy our democracy.”

In the parallel universe occupied by conservatives, leading corporations are actually playing no role at all in the elections, which are thriving post-Citizens United. Senate Minority Leader Mitch McConnell (R-Ky.) argued this case at the American Enterprise Institute last month, asserting that “not a single Fortune 100 company contributed a penny to the eight super PACs that supported the Republican primary candidates.”

There’s plenty of room for disagreement over whether unrestricted political money helps or hurts campaigns and whether fixes such as full disclosure would work. But when starting points differ so wildly, it’s time to set the record straight. No matter how you slice it, corporations are spending unprecedented sums in this campaign.

To be sure, McConnell’s argument contains a grain of truth. In the wake of the Supreme Court’s 2010 ruling that deregulated political spending, it turns out that the big money is coming from individuals, not corporate treasuries.

A February analysis by a pair of progressive groups found that 17 percent (more than $30 million) of the money that super PACs raised post-Citizens United came from for-profit businesses. The largest share — 56 percent — came from wealthy individuals, according to the study by Demos and the U.S. Public Interest Research Group, which will be updated later this month.

“The rhetoric has been way overblown,” said conservative election lawyer James Bopp Jr.

But GOP talking points that downplay the role of big business after Citizens United omit major routes for corporate campaign spending. These include the tens of millions that corporate CEOs from the casino, real estate, energy and financial services industries have given to super PACs this cycle.

Also missing from the conservative narrative are politically active nonprofits, from the Democratic-friendly Priorities USA to the pro-GOP Crossroads Grassroots Policy Strategies, which are spending millions of dollars collected from undisclosed donors ­— many of which could well be big corporations.

Last month, SNL Financial disclosed that Aetna had donated more than $3.3 million to the American Action Network in 2011, and another nearly $4.5 million to the U.S. Chamber of Commerce — two nonprofits spending heavily in targeted Congressional races. That prompted a complaint from Citizens for Responsibility and Ethics in Washington to the IRS.

In some cases, McConnell and his allies have chosen their data selectively. In others, their assertions are flat wrong.

A recent statement by election lawyer Jan Baran to the New York Times that super PACs have spent “not a nickel” of Fortune 500 money is at odds with public disclosures compiled by U.S. PIRG for its analysis.

U.S. PIRG shows donations from both Fortune 500 and Fortune 100 companies, including $300,000 from MGM Resorts International to Patriot Majority PAC, $10,000 from PG&E Corp. to Rebuilding America, and smaller super PAC donations from Chesapeake Energy and PepsiCo Inc.

In his recent amicus brief to the Supreme Court involving a Montana law banning corporate spending, McConnell and his lawyers asserted that the eight super PACs backing the GOP presidential candidates had collected “not a single cent” from any Fortune 100 company and had raised only 12.9 percent of their funds from privately held corporations and less than 1 percent from public companies.

What the brief leaves out are the six- and seven-figure contributions that these PACs raised from the CEOs of such publicly traded companies as Dreamworks Animation, Huntsman Corp. and the Las Vegas Sands Corp. Las Vegas Sands CEO Sheldon Adelson has given $20 million to two Republican super PACs, according to the Center for Responsive Politics, and is poised to give another $10 million or more to a super PAC backing presumptive GOP presidential nominee Mitt Romney.

Harold Simmons, owner of Contran Corp., a privately held manufacturing company based in Dallas, has given $15.2 million to half a dozen super PACs, according to the CRP. Contran has also made $3.5 million in direct corporate treasury donations to American Crossroads and three other super PACs, according to the CRP.

“It’s still individual money,” Bopp said of the super PAC donations from CEOs. “It’s not corporate money. No shareholder has any claim to it.”

But money given by a public figure associated with a company can be or appear to be as potentially corrupting as direct corporate treasury money, watchdogs said.

The debate over corporate treasury dollars and cents is “a bit of a red herring,” said Lisa Rosenberg, government affairs consultant with the Sunlight Foundation. Whether the money comes from a corporation’s CEO or from its general fund, she said, “it’s still unlimited money — most of it secret, most of it undisclosed.”

Clarification: July 24, 2:09 p.m.

An earlier version of this column incorrectly attributed comments on corporate spending made to the New York Times. The comments were made by election lawyer Jan Baran of Wiley Rein.

Correction: July 11, 2:12 p.m.

An earlier version of this column had incorrect references to Universal Health Care Group and Wells Fargo Bank. Universal Health Care Group is not a Fortune 500 company. Wells Fargo Bank refunded banking fees to a super PAC client but has made no super PAC donations.