October 29, 2010 Unmasking a Small Slice of Independent Corporate Spending in the 2010 Federal Elections

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Oct. 29, 2010



Unmasking a Small Slice of Independent Corporate Spending in the 2010 Federal Elections

Disclosed Corporate Funds Behind Independent Spending Are a Fraction of What Is Hidden, Heavily Favor Republicans



WASHINGTON, D.C. – Tapping into what few disclosure records exist of campaign spending by outside groups in the 2010 elections, Public Citizen identified about 200 corporate contributors to a mere 29 independent groups that have reported their funding sources to the Federal Election Commission (FEC). These disclosure records account for a very small fraction of the record-breaking campaign spending by outside groups this year, but they confirm a widely suspected trend: Corporate money is heavily favoring Republican candidates by 11-to-1.

“The overwhelming majority of the corporate money flowing into the 2010 elections remains hidden from public view, laundered through scores of outside electioneering groups that are refusing to disclose their funding sources,” said David Arkush, director of Public Citizen’s Congress Watch division. “Most of these groups claim to avoid triggering registration and disclosure thresholds by steering clear of making electioneering activity their major purpose – a claim that Public Citizen is actively challenging in a series of complaints filed with the FEC.”

A few of the outside groups have declared that their major purpose is to influence federal elections, which requires them to register either as political committees or “independent-expenditure-only committees” (known as Super PACs). Super PACs may receive unlimited contributions from corporations, unions and individuals to pay for independent expenditures, but they must disclose their donor sources to the FEC on a quarterly basis (as well as on a 24-hour basis near the election). It is from these reports that Public Citizen has gleaned a snapshot of corporate political spending this year.

Public Citizen’s analysis shows that among the 29 independent electioneering groups that we have been able to identify as disclosing corporate donors, 18 are buying ads primarily or exclusively favoring Republican congressional candidates, 10 are promoting Democratic congressional candidates, and one is exclusively supporting the independent senatorial candidacy of Lisa Murkowski, who lost the Republican nomination in Alaska’s primary election.

Nearly $10 million in corporate contributions to these groups is backing Republican candidates, almost $900,000 is backing Democratic candidates, and about $1.8 million is supporting the independent candidacy of Murkowski. The list of independent electioneering groups, their corporate donors and the amount of corporate contributions is available at https://www.citizen.org/sites/default/files/snapshot-corporate-donors-chart-10282010.pdf.

Among the largest corporate donors of $25,000 or more to the independent spending groups, the contributors supporting Republicans are dominated by the financial industry, followed by real estate, agriculture and energy. The independent group supporting Murkowski’s bid is funded primarily by Native American real estate interests. Although the funding for Democratic groups from large corporate donors pales in comparison to that of the Republican groups, casinos are a surprising source of large donations for Democrats. All corporate donors of more than $1 million dollars are supporting Republican groups through American Crossroads, an organization launched by Republican strategist Karl Rove.

Smaller corporate donors range from automotive services to plumbing companies to even the Jelly Belly Candy Co., which put $10,000 into a Republican-oriented group.

Yet it is important to remember that a vast amount of corporate money is being poured into the elections, and the sources of that are for the most part unknown. The U.S. Chamber of Commerce, for instance, has said that it plans to spend $75 million this election, but its donors are a mystery.

“The decision to invest corporate funds in an election is almost always solely that of the company CEO,” said Craig Holman, government affairs lobbyist for Public Citizen. “In publicly held companies, the CEO is under no obligation to get the consent of, or even inform, shareholders of how she or he is spending their money on politics. This is a new Wild West of unlimited and undisclosed corporate spending in our elections.”

The United Kingdom has long required that corporate CEOs inform shareholders of political spending and receive shareholder approval for corporate political expenditure budgets. There are no such safeguards in the U.S.

Public Citizen continues to call for passage of the DISCLOSE Act to lift the veil of secret money in elections; approval of the Shareholder Protection Act to mandate that shareholders be duly consulted in decisions of corporate political spending; passage of the Fair Elections Now Act to provide candidates with sufficient public funds to respond to corporate-sponsored attack ads; and ratification of a constitutional amendment to clarify to the U.S. Supreme Court that corporations should not be treated as people under the First Amendment. The court in its January decision in Citizens United v. Federal Election Commission gave corporations the green light to spend as much money as they want to sway elections.

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Public Citizen is a national, nonprofit public interest organization based in Washington, D.C. For more information, please visit www.citizen.org.