Federal campaign finance law lets lawmakers take money from PACs sponsored and administered by the corporations and special interest groups that lobby them on how they would like the laws to be written. It’s a feature of the political systems that helps private-sector entities with business before Congress create financial connections to politicians, even as most companies, unions, and trade associations are banned from making donations themselves.
But the problems with this system are made worse by secretive policies enforced by the Democratic and Republican parties that directly link legislative and political power to campaign fundraising. In order for House lawmakers to gain more influence over legislation and political decision making, they have to pay their parties dues in the hundreds of thousands of dollars each year. Combined with laws that make it easy for companies eager to buy influence to make donations and an economy where corporations have an increasingly larger share of the money, the dues systems leads to the most powerful lawmakers also being the ones most closely tied to private lobbying interests. It means congressional leadership members and committee chairs tend to disproportionately owe their power to corporate backers rather than the people who elected them.
“The current campaign finance system relies too much on politicians raising money from special interests — especially those with business before Congress,” wrote campaign finance reform group Issue One in a recent report on the party dues system. “As long as that’s the case, the pressures on lawmakers to raise campaign cash for the parties, and the problems associated with this system, are likely to continue.”
Two of the most powerful House committees, which also have the most expensive chairmanships, are currently led by reps who were among the top recipients of business PAC dollars in the 2020 election cycle. Massachusetts Democrat Richard Neal chairs the Ways and Means Committee, which handles taxation issues and all legislation that would impact revenues. He received more corporate PAC dollars in the 2020 election than any other House candidate, according to the Center for Responsive Politics. The Energy and Commerce Committee has the broadest jurisdiction of any committee, covering issues like health care, food, energy, and privacy. Its chairman, Rep. Frank Pallone (D-N.J.), got the fifth-largest amount of corporate PAC money of all House candidates last cycle.
These corporate-backed committee chairs have tremendous power over the laws. While any member of Congress can propose legislation, chairmen like Neal and Pallone largely decide what bills are given votes and have a chance at becoming law, and which ones will simply die in committee without ever getting any official attention. Bills have to get passed by the committees that cover their subject matter before heading to the full chamber, and the chairmen decide which bills to schedule for committee action.
Bills that don’t have the backing of the chairs of the committees they are referred to have a much lower chance of becoming law. Roughly 85% of bills do not survive committees, but 90% of the ones that do get through the committees end up being passed by the House or Senate, according to a Harvard study. An analysis from the bill tracking website GovTrack found sponsorship or co-sponsorship by a relevant committee chair to be among the top factors for predicting which bills make it out of committee. The only factor found to be more predictive than chair sponsorship was if a bill was about renaming a post office.
It’s not hard to find examples of committee chairs changing their legislative priorities when they rose to powerful committee seats and began taking more corporate PAC money.
Before he became the top Democrat on Ways and Means, Neal used to say he wanted to close tax law loopholes that let American companies incorporate offshore and avoid paying taxes. It was a constant theme of his campaign ads, and he used to introduce bills to address the issue. But as Sludge documented in 2019, his interest in the issue appears to have faded in 2017 when he became the top Democrat on the Ways and Means Committee and stopped introducing bills on the issue for the first time since 2002. That seat likely came with a party dues requirement, and Neal’s increasingly corporate PAC-reliant fundraising has included taking money from the PACs of companies engaged in offshore tax dodging including those affiliated with General Electric, Caterpillar, and PricewaterhouseCoopers. Offshore tax rates, meanwhile, can be as low as 0%.
Neal’s rise in the Ways and Means Committee coincides with a rise on the corporate PAC money leaderboard. In the 2016 cycle, before he was the committee’s top Democrat, Neal raised the 46th-highest amount of corporate PAC money. In the 2018 cycle, when he first became the ranking Democrat on the committee, he shot up to having raised the fifth-highest total from corporate PACs. And then in the 2020 cycle, when he was first the committee’s chairman, he officially became the most heavily corporate PAC-funded member of the House.
Several other chairs of powerful committees who have large dues to pay their parties are among the top fundraisers from business PACs. The top Ways and Means Republican, Kevin Brady of Texas, ranked sixth last cycle in corporate PAC dollars. The Republican ranking member of the House Administration Committee, Illinois’ Rodney Davis, was the third-best 2020 candidate in terms of getting corporate PAC donations.
In most cases, these representatives raise a vanishingly small portion of their campaign funds from their actual in-district constituents, far less than the $600,000 or so they are required to hand over to their party. Neal, for example, got just $67,000 from people in his Western Mass district last cycle.
Three committee chairs transferred gave more than one-fifth of their campaigns’ total expenditures to their parties in the 2020 cycle, according to an analysis by Issue One: former Appropriations Chair Nita Lowey, who handed over 42%, Energy and Commerce Ranking Member Greg Walden (R-Ore.), who gave his party 32% of his campaign’s spending, and Financial Services Committee Ranking Member Patrick McHenry (R-N.C.), whose party expenditures made up 26% of his total spending.
Leadership members are also under pressure to raise large amounts for their parties, and, like committee chairs, they also tend to get that money from corporations’ PACs.
In the 2020 cycle, House Majority Leader Steny Hoyer (D-Md.) was given a dues goal by the Democratic Congressional Campaign Committee of $900,000, according to a document published by The Intercept. Hoyer raised the second-highest total of corporate PAC money in the 2020 cycle, according to the Center for Responsive Politics’ tally. Hoyer’s jobs as House Majority Leaders are “scheduling legislation for consideration on the House Floor, shaping House Democrats’ legislative priorities, and delivering the Democratic message,” his website says.
House Democrats also have a points system that allows members to chalk up points for things like hosting fundraisers for their colleagues in vulnerable seats that can then be cashed in with leadership for favors like better committee seats. According to The Intercept, the points system was created after members of the Congressional Black Caucus argued that the dues system was unfair for members who represent poorer districts, though a House Democrat told them the system is not widely used and the points are less important than the amount of cash members raise for the party.
In its report, Issue One says the dues expectations should be published publicly. It also says it “supports strengthening House rules to delink committee chair determinations from lawmakers’ fundraising prowess.” Further, the group says that members of Congress should reevaluate the ways elections are financed and that party leaders should lower the amounts their members are expected to pay in dues.