Corporate America Starts Funding Super PACs

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By Kenneth P. Doyle

Corporate America has kept a low profile in funding federal election campaigns in recent years, as court decisions gutted decades-old legal restrictions but failed to persuade reluctant companies to risk their reputations in the messy world of politics.

But that may be changing.

President Donald Trump’s embrace of his role as Republican fundraiser-in-chief was made clear this month with the release of a Federal Election Commission report revealing record-breaking contributions to Trump’s inaugural committee. Trump’s total of nearly $107 million doubled the previous record for a presidential inaugural committee and included tens of millions in contributions from dozens of big companies, including Aetna and Verizon.

But Trump wasn’t the only one getting corporate money. An inaugural fundraising event held by Republican congressional leaders brought in hundreds of thousands of dollars in corporate contributions for direct support of Republican candidates, according to an FEC disclosure report.

That money is now being used to help Republican candidates in special congressional election campaigns in Georgia and Montana.

Big-Name Companies Giving

The new corporate contributions went to the Congressional Leadership Fund, the Republican super PAC linked to Speaker Paul Ryan (R-Wis.) and other House Republican leaders, according to the FEC report filed last month in advance of a special congressional election in Georgia.

The Republican super PAC’s contributors included such well-known public companies as AT&T, Amgen, Anthem, Exelon, MetLife, MillerCoors and Microsoft. These companies hadn’t made direct contributions in decades—if ever—to super PACs supporting federal campaigns or to national committees of the major political parties, according to a Bloomberg BNA review of FEC reports analyzed by the nonprofit Center for Responsive Politics.

A total of more than $575,000 in direct corporate contributions were made to the Republican super PAC, known as CLF. That was added to money from undisclosed contributors given to the super PAC and accounted for the vast majority of the nearly $4.5 million collected by the super PAC in the first three months of 2017.

The money from undisclosed contributors provided to CLF came through the American Action Network (AAN), an affiliated nonprofit group organized under Section 501(c)(4) of the tax code. The nonprofit affiliate provided CLF more than $3.5 million in the first quarter of the year, according to the FEC report. AAN claims to be exempt from FEC disclosure rules and keeps its donors secret. The few revealed contributions to the nonprofit have come largely or entirely from corporations.

Expanding Donor Base

Asked to comment about CLF’s recent success in raising corporate contributions, a spokeswoman for the Republican super PAC, who asked not to be named, told Bloomberg BNA in an email: “CLF is always looking to expand its donor base and is grateful for the strong support coming from new donors this year.”

Most companies asked by Bloomberg BNA about their contributions to the Republican super PAC either declined to comment or didn’t respond immediately. Two companies that did respond provided little insight into why they had decided to start giving contributions to a federal super PAC after years of avoiding such contributions.

Anthem Inc., the giant health insurance company, gave the CLF $25,000 in early January, according to the FEC report. The company confirmed to Bloomberg BNA that it contributed for sponsorship “of an event including the Congressional leadership during the celebration of the 58th Presidential Inauguration,” according to an email from company spokeswoman Jill Becher.

MetLife, the leading national life insurance company, also reported giving CLF $25,000 in January. The company said it “supports candidates and organizations whose policies align with our core mission of providing financial security to millions of Americans,” according to an email from spokesman Christopher Stern.

Chevron Exception

Until now, super PACs linked to congressional leaders of both major parties have been funded mainly by rich individuals—including billionaires like Sheldon Adelson on the Republican side and Thomas Steyer on the Democratic side. Super PACs linked to Democratic congressional leaders also have received significant money from major unions and both sides have received occasional corporate money.

But contributions from well-known public corporations to super PACs linked to both parties have been rare.

Affiliates of the energy giant Chevron have provided nearly $7 million in corporate money in previous election cycles to Republican super PACs, but the Chevron contributions have until now been seen as the exceptions that proved the rule.

Unlike Chevron, the newly disclosed corporate contributors to the Congressional Leadership Fund hadn’t given much, if any, corporate political money in decades, at least at the federal level, though some have made major state-level contributions. Most, if not all, of the companies also have traditional corporate PACs funded by company employee and stockholder contributions. These PACs are allowed to contribute to federal candidates and national party committees.

Soft-Money Givers

In fact, direct corporate spending to influence federal elections has only been allowed since the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission, which rolled back a decades-old federal ban on corporate campaign money.

Before passage of the 2002 Bipartisan Campaign Reform Act, known as BCRA or the McCain-Feingold law, many big companies gave unlimited contributions known as “soft money” to the national Democratic and Republican parties. This money was used for “issue ads,” which couldn’t call directly for support or opposition to a federal candidate but were widely used by both sides to help their candidates.

Some of the recent corporate contributors to CLF also were big givers during the soft-money era of the 1990s.

The new FEC disclosure report filed last month by CLF listed nearly a dozen companies and trade associations as “sponsors” of the congressional Republicans’ fundraising event held around the Trump inaugural. The event raised a total of about $225,000 for the super PAC, according to the disclosures. Companies gave in amounts ranging from $10,000 to $50,000.

A separate $250,000 contribution to CLF also was reported from Chevron. In addition, the private prison company GEO Corrections Holdings Inc. gave a $100,000 contribution.

Both Chevron and GEO had made previous large contributions to CLF and other Republican super PACs, with GEO also providing money last year to a super PAC supporting Trump in the presidential race.

Super-PAC Money Crucial for GOP

Whatever the reasons other corporate contributors have decided lately to join in giving, the money raised by CLF has been crucial this year for Republicans.

For example, nearly $3.5 million spent by the Republican super PAC for television ads and other efforts helped prevent a big Democratic victory and avert a GOP disaster in a special congressional election in Georgia earlier this month.

The Georgia U.S. House seat up for grabs is one of several seats vacated by Republican lawmakers joining the Trump administration. Special elections for these seats are coming in districts mostly seen as safe for the GOP, but these races have provided a test of whether Republicans can withstand the challenge of Democrats newly energized by Trump’s victory in last year’s presidential election.

In Georgia, CLF’s spending for hard-hitting campaign ads helped keep Democratic candidate Jon Ossoff from winning outright in an April 18 multi-candidate primary for the congressional seat vacated by former Rep. Tom Price (R-Ga.). Price left to head the Department of Health and Human Services in the Trump administration. A runoff election now is set for June 20.

Ossoff, a 30-year-old former Democratic congressional staffer and first-time candidate, was held to 48 percent and forced in a runoff election against a well-funded Republican opponent, Karen Handel. Handel, a former Georgia secretary of state, took just under 20 percent of the total vote.

The campaign for the runoff is expected to set spending records, with money pouring in from both sides. Before the primary, Ossoff had raised an an eye-popping $8.3 million in individual contributions, according to FEC reports, including more than $5.6 million in “unitemized” contributions of less than $200 per contributor. Much of it was raised from Democratic contributors outside the suburban Atlanta congressional district, motivated by opposition to Trump and aided by Democratic groups that help raise online contributions for targeted races.

Handel, the leading Republican vote-winner, raised only about $500,000 before the primary but received crucial support in forcing the runoff from CLF and other Republican groups.

CLF Spends $1.5 Million in Montana

A similar pattern may be shaping up in another special election in Montana to fill a U.S. House set vacated by Interior Secretary Ryan Zinke.

Democrat Rob Quist, a Montana folk singer and novice candidate, raised nearly $1 million the first three months of the year, according to FEC reports filed this month. That made Quist potentially competitive in the race for Montana’s at-large seat against businessman Greg Gianforte, the Republican candidate who also previously ran for governor. Gianforte has raised $1.6 million in the first quarter of the year.

CLF already has spent more than $1.5 million in the Montana race for ads opposing Quist, according to recent FEC reports on independent campaign expenditures. The House Republican super PAC is leading all other groups in a race that already has seen more than $2 million in outside spending about a month before the election.

Nearly all the outside money is being spent on the Republican side, though Democrat Quist has had about $30,000 in spending support for phone banks and mailings sponsored by Planned Parenthood Action Fund Inc. The Democratic-leaning nonprofit group has been a major spender on elections but doesn’t disclose its donors.

Bloomberg Philanthropies provides financial support for Planned Parenthood.

To contact the reporter on this story: Kenneth P. Doyle in Washington at kdoyle@bna.com

To contact the editor responsible for this story: Paul Hendrie at phendrie@bna.com

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