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Tuesday, February 21, 2006

Corporations Increase PAC Contributions

As Jonathan Salant reports for Bloomberg, corporations have increased their use of PAC contributions since the implementation of the 2001 Bipartisan Campaign Reform Act (BCRA). In 2005, corporate PACs made $79 million in political contributions, up from $50 million in 2001.

While contributions directly to federal candidates were limited to $1,000 from individuals and $5,000 from PACs since the 1970's, prior to the BCRA, corporations and unions could contribute unlimited amounts directly from their treasuries to the political parties. These contributions, known as "soft money", were prohibited by the BCRA.

However, both corporations and unions are forever trying to use their financial resources to influence public, and sought new ways to do so. Corporate PACs, which raise money from employee contributions to in turn donate to candidates, parties, and other PACs, are one of those ways.

Another way is the now-notorious 527 loophole, which enabled mega-donors to contribute millions of dollars to influence the 2004 presidential election. The donors were primarily Democrats, but few would argue that the Republican Swift Boat Vets for Truth didn't have considerable impact on the outcome of the 2004 race.

And of course, corporations are unrestrained in their ability to spend millions on lobbying efforts.

While some would point to the increased corporate PAC donations as evidence that campaign finance regulation is destined to fail, the truth of the matter is that campaign finance regulation is not designed to prevent the employees or shareholders of corporate America or the men and women in labor union from making political contributions any more than the rest of us. Rather, the idea is to make sure that financially powerful interests don't have more say than the rest of us simply because of their wealth.

The numbers on corporate PACs suggest what most of us likely feel, even with the passage of the BCRA: that we haven't yet ensured that wealth doesn't equate to voice in determining our elected representatives. That being said, the answer is not to throw up our hands and give in to the eternal encroachment upon democracy of wealthy interests, but rather to learn from our mistakes and to continue the fight.

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