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Monday, April 04, 2005

Maryland Interests Use Front Corporations to Avoid Limits

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As Michael Dresser and Alec MacGillis report in the Baltimore Sun, wealthy interests in Maryland are using multiple corporate fronts to evade the state's contribution limits (free registration required). Maryland prohibits corporations from giving more than $4,000 to any one candidate or $10,000 in aggregate to all candidates over a four-year cycle, but doesn't aggregate all contributions from related business entities for purposes of the limit.

One developer, Edward A. St. John, has taken advantage of the loophole to orchestrate some $160,000 in contributions.

The problem here is not the loophole allowing corporations to evade the limit, but that corporations can make political contributions at all. Corporations are just collections of people who get together to make money. They can't vote for a candidate: why should they get to give money to candidates?

State Prosecutor Robert Rohrbaugh agrees. In a recent letter to lawmakers, Rohrbaugh wrote: "While it is encouraging that the campaign contribution laws are being addressed, the potential of abuse will continue as long as artificial entities such as corporations and limited liability companies are permitted to contribute to campaigns."

Yet more than half of the states permit corporations to make political contributions, with more states considering lifting or relaxing the ban on corporate contributions as corporate shareholders seek to expand their influence on government at all levels. The state of Ohio just opened the door to corporate contributions to political parties for the first time in 100 years. Political operatives in Texas are angling to overturn that state's ban as well.

Permitting corporations or wealthy individuals to give more to candidates than the rest of us can afford drives up the price of political participation and drowns out the voices of those who not backed by wealthy interests. It is the modern-day equivalent of fencing off the town square and charging admission. We should treat it accordingly.

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