Campaign Finance 101: A Corporate Contribution Primer (warning long)

[eyesroll]

It seems, in more than a few threads, that some people have misconceptions about who contributes to political candidates. "Howard Dean got lots of money from AOL/Time Warner!" is a common cry. "Only Candidate Y is free of corporate money!" is another.

Well, yes and no. There's a lot of misreading of the data going on. I'd like to clear some of it up.

First, some disclosure: I support Howard Dean in the primary, a can of diet cola in the general if that's what's nominated. I have a stack of campaign-finance documents from Vince's campaign in my living room; there are some differences between presidential and Congressional fundraising rules, but the basics are the same.

Primarily: Corporations, labor unions and national banks cannot contribute directly. Period. This is illegal. If George Bush or John Kerry or Vince or Jeff or whoever gets a check from Wal-Mart's corporate account, it needs to be returned. Checks from sole proprietorships and partnerships are acceptable (up to the $2,000 per individual contributor -- or, say $6,000 from a partnership owned by three eligible donors).

There are big civil and even criminal penalties for knowingly accepting a corporate contribution. I have no reason to believe anyone (even Shrub) has knowingly broken the law in this matter.

However, there are some ways around this. One is executive donations -- if everyone on a 15-person corporate board gives the maximum to one candidate, that's a $30,000 donation. Not chump change. However, this could trigger an investigation, since it's exceedingly rare that every single person on a board will do this. (I did look up Halliburton's board members awhile ago, and only a few of them contributed at all in the last few years, and to different candidates.)

Another is forming a political action committee (PAC). PACs can give up to $5,000 per candidate. PACs are divided by Open Secrets into three categories -- business, issue, and labor. Issue PACs include those by Planned Parenthood, the NRA, EMILY's List, etc. Issue PAC contributions tend to reflect positions -- Planned Parenthood isn't going to contribute to an ardently pro-life candidate. Labor PACs are those formed by unions, and not really what we're worried about here.

Business PACs, though, are formed by corporations and business groups. Here's where we need to look deeper.

http://www.opensecrets.org/presidential/summary.asp?ID=N00008072

(These are as of the Oct. 15 reports.)
George W. Bush has a total of $867,900 from business PACs (or, a little over 1% of his total contributions.) I do not have a paid membership to any of the campaign $ sites, so I can't tell you which PACs contributed.

Howard Dean = $1,000.
John Kerry = Not listed.
Edwards = Zero from any PAC.
Gep = $107,931.
Lieberman = $92,957.
Clark = 0.
DK = 0
CMB = $3,000.
Sharpton = $0.

We're not talking huge sums of money for any candidate, but Gep and Lieberman are higher than others. None of this represents a significant impact -- $1,000 out of a $25 million war chest isn't going to buy a lot of policy.

"But Howard Dean got $61,000 from AOL/Time Warner! How can this be?"

This is a common, but inaccurate, assumption. (I'm using Dean here as an example, but any candidate could work.)

Open Secrets explains it thusly:
HOW TO READ THIS CHART: This chart lists the top donors to this candidate during the 2004 election cycle.The organizations themselves did not donate, rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates.
http://www.opensecrets.org/presidential/contrib.asp?id=N00025663&cycle=2004

Since we've already established Dean has only received $1,000 in business PAC money, that means at least $60,000 and change came from individuals who work for AOL/Time Warner. Why so much? Well, there are a few reasons. AOL is a big employer, so some of it is simply statistical -- lots of workers = lots of potential donors.

Now, these could all be AOL executives, bringing us back to the influence-buying scenario I discussed earlier. So, I did a donor search for AOL, recipient Dean, and got this (names and dates deleted for space -- no famous people, so amounts and occupation are what's important):

http://www.opensecrets.org/indivs/search.asp?NumOfThou=0&txtName=&txtState=%28all+states%29&txtZip=&txtEmploy=AOL&txtCand=Dean&txt2004=Y&Order=N

AOL TIME WARNER/SR VP
$1,000

AOL TIME WARNER/WRITER
$250

AOL/SENIOR VICE PRESIDENT
$500

AOL/TIME WARNER/WRITERS ASSISTANT
$500

AOL/TIME WARNER/QA/AUDIT MANAGER
$250

AOL/TIME WARNER/ASSOCIATE EDITOR
$250

AOL TIME WARNER/SDK EVANGELIST
$250

AOL TIME WARNER/SOFTWARE QA ENGINEER
$250

AOL/SYSTEM ADMIN
$250

AOL TIME WARNER/EDITOR
$250

AOL/SOFTWARE QA ENGINEER
$250

AOL/SOFTWARE QA ENGINEER
$250

AOL TIME WARNER/SW ENGINEER
$300

AOL TIME WARNER/SW ENGINEER
$250

AOL TIME WARNER/WRITER
$500

AOL TIME WARNER FOUNDATION/EXECUTIV
$250

AOLTW/SOFTWARE ENGINEER
$250

AOLTW/SOFTWARE ENGINEER
$250

AOL TIME WARNER/ATTORNEY
$250

AOL TIME WARNER/WRITER
$500

(This doesn't include people who work for AOL subsidiaries that don't include AOL in the name.)
Yes, there are some executives there, but most of these are writers, software engineers -- in other words, regular (though highly-paid and thus able to contribute) workers. Attack Dean for having a few contributions from executives if you must, but you can't really say he's beholden to corporate interests because a few programmers kicked in some money.

(Using that same logic, Vince must be a shill for the banking industry, because a disproportionate number of contributions came from there. It should be noted that he, and some family members, work in the banking industry.)

It should be noted that John Kerry received AOL contributions, too -- from three executives and a consultant:

AOL/CONSULTANT
$2,000

AOL TIME WARNER/EXECUTIVE
$500

AOL TIME WARNER/EXECUTIVE
$250

AOL TIME WARNER/EXECUTIVE
$500

AOL/EXECUTIVE
$1,000

Dennis Kucinich has $250 from AOL, using that same search (a writer gave to him). I didn't search the rest, but it's easy to do.

I guess my point in all of this is -- before you attack someone for being beholden to corporate interests, do your homework. Corporations can't legally give; executives give all over the place, and large employers are more likely to have more contributions due to sheer numbers. Attack candidates based on individual contributions (although most politicans will not return money from legal donors, no matter how much they disagree), but please don't jump to conclusions due to out of context or misinterpreted data.

And also -- every single one of these candidates is better than George W. Bush, both in corporate/PAC influence and in general. Continue to promote your candidate, but keep your eye on the prize.

[Le Taz Hot]

1. Excellent information, eyesroll!

:kick: because more people need to read this. Very enlightening. Thanks!

[DuctapeFatwa]

2. There is another way around it too

Suppose I am a Walton Princess, and I want to contribute a lot of money to bush.

I can go to any Wal-Mart store, write checks to everyone in Housewares, and tell them to send that money to bush, of course, but that will be pretty obvious, since everybody knows I don't pay my employees enough to make campaign contributions.

But I'm a Walton Princess, so I know lots of people who don't work for me, at least not via Wal-Mart.

I can go get my hair done, and if my salon has 10 employees, I can cause the salon to have $20,000 with an incentive to be sure it is divided up and given to bush. I could write the check from my personal account, but the salon might not want that on their tax records, so it will be better if I have a trusted friend or associate write the salon a check for some consulting work.

Because I am so filthy rich that 20 or 30 thousand dollars is chump change to me, I (or a trusted friend or associate) can stop strangers in the street and offer them $100 if they will accompany me to the money order place on the corner where I will buy a money order for $2000 which they will fill out and send to bush.

Now those are oversimplified and silly sounding examples, but the point is, people who have a lot of money and want to make sure a particular candidate gets it can do so.

[eyesroll]

4. Good point

Your scenarios also are illegal, I should mention. My discussion was limited to legal ways around campaign finance laws. It is illegal to give money to someone with the expectation they will contribute to your candidate of choice.

That doesn't mean it doesn't happen -- lots of illegal things happen. The salon would probably get caught, though, because large donors (over $200) are required to list their occupation and employer. If $20,000 came in in $2,000 increments from employees of a single salon, that would raise a big FEC flag.

The $100 on the street, or those $2,000 salon contributions from customers rather than employees, would be harder to trace.

You're very right in that someone who wants to ensure large amounts of money go to one source can do so. It is technically possible, though unlikely, that those $250 contributions from software engineers were really $20,000 from executives split among employees.

[sybylla]

3. Great stuff

All the campaign financing changes that have taken place since McCain/Feingold have not gotten through to the general public, or people like me who are active members of the local party in the hinterlands.

Thanks for the primer.