PACs and Pols Eye November
from
March/April 2002
by Joshua Green
With the 2002 midterm elections just eight months away and controlof Congress hanging in the balance, both political parties are liningup big spenders as fast as they can. In politics, as George W. Bushdemonstrated in his presidential campaign, the party with the mostmoney usually wins the tight ones.
Republican and Democratic hopefuls are turning to their surest sourceof cash—big business, in the form of CEOs, directors, and the politicalaction committees (PACs) that many companies put together. As the tableshows, several corporate PACs have already assembled hefty war chestsfor the 2002 races, according to the Federal Election Commission, whichkeeps tabs on these things. The figures are for filings throughDecember 31.
What’s in it for the donors is obvious: vital access to thedecision-makers who write the laws and regulations that affect them andtheir industries. By the same token, a company can suffer if the wrongparty wins. Movie and music mogul David Geffen and Walt Disney Co.chairman and CEO Michael Eisner, both probably fearful of censoriousRepublicans, have made donations totaling $10,000 and $2,000,respectively, to support various Democratic candidates in ’02.Similarly, Rupert Murdoch has contributed more than $14,000 to theRepublican cause and individual Republicans, whom he doubtless sees asmore hands-off than pro-regulation Democrats. Of course, lots of folksback both horses. Raymond Gilmartin, Merck & Co.’s chief executive,has given $1,000 to Democratic senator Max Baucus of Montana, who isrunning for reelection, and another $10,000 to the National RepublicanSenatorial Committee.
All these amounts reflect the limits set by federal election laws. Anindividual can give no more than $1,000 to any one candidate in anyparticular election, although some donors effectively double this whentheir spouses make identical donations. Film director Steven Spielbergand his wife, actress Kate Capshaw, each gave the max to support thereelection of Howard Berman, California’s longtime Democraticcongressman. Other limits on individuals include a maximum of $5,000 toa PAC and $20,000 to a national party committee per calendar year.
PACs, on the other hand, can essentially dole out as much as they liketo whomever they like. To be sure, they can give no more than $5,000 tocandidate Smith, but the sky’s the limit on what they can spend for TVads, say, as “Friends of Smith.”
Lots of folks have PACs—unions, industrial associations, andright-to-life groups, as well as corporations. Most of the money forcorporate PACs comes from the companies’ top brass. Some contribute inchunks; Bill Gates, for example, has put $5,000 into Microsoft Corp.’s2002 election PAC. Others prefer a regular payroll deduction. DonaldCarty, CEO of AMR Corp., has $416 a month taken out of his check fordirect deposit into his company’s PACs. As any disciplined saver knows,regular habits pay off: Carty’s contributions were approaching $4,000on December 1.
This year most corporate PAC money is sure to be directed at theSenate, which Democrats control by a single seat. Thirty-three Senateseats (20 held by Republicans and 13 by Democrats) are up for grabs. Avictory by the GOP would return the banking committee to its control,something most business leaders, not to mention President Bush, wouldlike to see.
Prognosis: September 11 has created public concern over the economy andnational security, two areas where polls show Republicans have popularsupport. The potential closeness of the races explains the intensity ofthe parties’ scramble for corporate money—and the enthusiasm amongbusinesses for providing it.
A Baker's Dozen of Fat PACs
| Microsoft | $830,400 |
|
GE
|
385,683 |
| Enron | 378,830 |
|
UPS
|
271,472 |
| Continental Airlines | 219,816 |
| Citigroup | 201,998 |
|
Walt Disney Co.
|
177,466 |
|
American Express
|
115,866 |
|
Pfizer
|
110,307 |
|
AT&T
|
109,955 |
| Merck | 78,794 |
| AMR (American Airlines) | 45,280 |
|
EBay
|
44,108 |
