Corporate Campaign Giving: Money Aimed at a Bull’s-Eye

Among the eye-opening statistics last week in a Times series on campaign contributions by American business is the disclosure that corporate giving in the last election amounted to only 6% of the total $2 billion donated. Moreover, many of the nation’s biggest and most successful firms were relative pikers when it came to shelling out money to the pols. Of the 544 companies surveyed, more than 100 reported no contributions at all.

But that in no way diminishes the significance of the money that is given, or the need for campaign reform of the sort being proposed in the U.S. Senate by Sens. John McCain (R-Ariz.) and Russell D. Feingold (D-Wis.). And it now seems apparent that the Senate investigation into campaign fund-raising abuses during the 1996 election is having an effect. This past week, the Senate’s Republican leadership grudgingly agreed to permit a full Senate floor debate on reform, which began Friday. That does not assure a yes vote on the McCain bill, but it is a giant step from where the Senate leadership was at the beginning of this year.

Corporate money may account for only a fraction of giving, but it is critical in terms of what it may buy and whom it benefits, the series by Times Washington bureau reporter Ralph Vartabedian pointed out. The money is carefully targeted to do the most good. The biggest givers tend to be those with the most need for something from the government: defense, financial services, tobacco companies, communications, transportation and agribusiness. These are industries that are heavily regulated or whose profits can be dramatically affected by government action.

The payback doesn’t usually come in big-bang form. “A little twist can make a zillion dollars,” said one legal expert. Former Secretary of Labor Robert B. Reich commented after one industry mobilized friendly members of Congress to scuttle a proposed safety rule: “It is a subtle form of corruption.”

But aren’t corporations barred by federal law from making campaign contributions? In fact they are, from giving to a campaign for office. But companies have political action committees that can give up to $5,000. Executives and employees can give up to $1,000 each as individuals. And--here’s the big loop- holes--they can give “soft money” in any amount. These are contributions to party organizations for generic electioneering and not designated to benefit a particular candidate.

The most rapid growth in corporate giving has been in soft money, from $16 million in the 1992 election cycle to $51 million in the 1996 election season. Furthermore, the rules governing the use of soft money have been contorted so that it now routinely goes to aid specific campaigns. This is why there is so much emphasis on banning soft money in the campaign reform debate.

They may call it soft money. But it’s money with an edge, a cutting edge. It’s money that gets special favors for a wealthy few who seek to get wealthier. The rest of us lose. That’s why Congress should not adjourn for the year without banning it.