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Shunning Corporate PACs Won’t End Corporate Influence in Elections

Industry will still find ways for money to reach the candidate through “individual donations.”

Former Texas Democratic Rep. Beto O'Rourke, who recently announced he is running for president, speaks at Keene State College on March 19, 2019, in Keene, New Hampshire.

Americans have long been frustrated with the pervasive role of money in politics. When elections come, however, it seems to be accepted as the cost of doing business. Barack Obama broke records in Wall Street fundraising and among his largest donors was Goldman Sachs, but this did not stop Democratic voters from electing him twice (and for a time treating him almost like a deity).

Those days may be over for politicians seeking the Democratic nomination for president. While Obama was not given a hard time by voters for his connections to finance, the issue hindered Hillary Clinton in 2016, especially as the Bernie Sanders campaign pushed the issue of her contributions and paid speeches in front of the industry.

The increased scrutiny of the role of money in politics has continued to play a big role in the 2020 Democratic presidential primary. Most of the 2020 Democrats, accordingly, are racing to swear off “corporate PACs.”

Campaign finance advocates say this emphasis reflects important progress. “The ‘no corporate PAC’ pledges …were prompted by reform-minded candidates who were responding to voter anger over all of the money in politics,” Adam Bozzi, the strategic partnerships director of End Citizens United, told Truthout. “Voters know the amount of money spent in politics affects their own bottom lines and they know corporate special interests have outsized and undue influence.”

Nonetheless, campaign finance experts acknowledge that swearing off corporate PAC money, as Sarah Bryner of the Center for Responsive Politics tells Truthout, is “mostly symbolic.” Corporations will still find ways for money to reach the candidate. An “individual donation” is not a synonym for “small donations” ($200 or less – generally considered a better gauge of grassroots support).

In fact, the limits for individual donations is $2,800, compared with $5,000 for donations to corporate PACs. The very same people who could donate to a candidate through a corporate PAC can organize similar amounts in individual donations instead. They can also donate to PACs and attend corporate fundraisers. In fact, most of the campaign finance data cited by the press includes individual donations broken down by industry. This anti-PAC approach enables candidates to gain points with the base without giving up much in return.

Candidates for office at the federal level also benefit from Democratic Party fundraising institutions — which are funded largely by “individual wealthy donors,” as Kim Moody wrote:

The Democratic Congressional Campaign Committee (DCCC) saw its campaign contributions rise from $2 million in 1980 to $206 million in 2014, while those of the Democratic Senatorial Campaign Committee (DSCC) climbed from $1.6 million to $169.2 million over the same period…. State parties [accounted for] an additional $182.6 million for congressional elections in 2014.

Beto’s Big Day

The issue of fundraising was at the center of the news recently, when Beto O’Rourke announced a $6.1 million in individual contributions within the first 24 hours of his campaign launch. This number just surpassed the fundraising totals of the 2020 Bernie Sanders campaign in its first 24 hours ($5.9 million). This led to a barrage of favorable news coverage for O’Rourke after what many in the press described as a “rocky” start to his campaign.

Initially, O’Rourke did not include important context about these numbers, such as how many contributions accounted for this total and the average donation size. These metrics are often seen as a strong indicator of grassroots support: The more donors, the smaller the average donation, the more impressive the figure. Sanders was far more transparent and reported the average donation ($27) and the amount of donors (225,000). This led some to view O’Rourke’s number with skepticism.

O’Rourke’s team finally did announce those figures on Wednesday, citing 128,000 donors and an average of donation of $47. Still, campaign finance experts note that the same interests who donate to a corporate PAC can make individual donations as well. In fact, in 2018, O’Rourke was the largest recipient of individual donations from employees of hospitals, the oil and gas industry, health professionals (such as the American Medical Association) and many other powerful industries.

Campaign finance experts tell Truthout that as of now, the campaigns are under no obligation to share any fundraising data until April 15, when this data must be made public.

“At this point, campaigns are only going to give out the data they want people to see. That is true for every campaign…. Outside of that and we are left to speculate on the rest,” said Bryner, research director of the Center for Responsive Politics, in an interview with Truthout.

No Substitute for Campaign Finance Reform

Since the Bernie Sanders 2016 campaign put corporate money in politics at the center of a national debate, however, more and more Democratic candidates for president (and before that, Congress) have felt pressured to distance themselves from corporate money. In fact, when Sen. Cory Booker voted not to allow prescription drugs from Canada to cross the border to lower prices, he was criticized harshly on social media by progressives, prompting him to announce he was going to take a “pause” from collecting pharmaceutical money. This is quite the departure from the norm. As the Center for Responsive Politics reports:

In 2016, pharmaceutical PACs gave $57,500 to Booker. Becton, Dickinson & Co, Bristol-Myers Squibb and Sanofi PACs all contributed $5,000 each in 2016. Before that, in 2014, a cycle he was actually running in, Booker’s campaign took in $161,000 in pharmaceutical PAC money. Pfizer contributed $17,500, Merck & Co gave $12,500 and several more gave $10,000 each.

Booker, now a presidential candidate, made the anti-PAC pledge and said he would refuse to accept Super PAC money, although as the Center for Responsive Politics reported, “the campaign cannot actually prevent outside groups from making independent expenditures.”

Sen. Kirsten Gillibrand — who, like the rest of the Democratic candidates has sworn off corporate PAC money — has already been garnering Wall Street support. She also has plans to attend a fundraiser for her campaign hosted by an executive of the drug giant Pfizer on March 31. The recommended donation is between $1,000 and $2,700 (the largest allowed individual donation). None of the money raised here qualifies as “corporate PAC” money, but it is hard to see why it is any less problematic.

“There are a number of people around the campaign finance world that come to the conclusion that you’re not giving up that much by giving up PACs,” said Dr. Steven Billet, director of the legislative affairs program at George Washington University.

Despite these contradictions, many advocates of campaign finance reform argue that these pledges are a start — not a substitute for comprehensive campaign finance reform or publicly financed elections.

“There are certainly other areas where special interest money is a problem, but some of it is outside of a candidate’s control,” Bozzi said. “But they can control whether or no they take corporate PAC checks. And you’ve seen the focus on corporate PACs because that is where people recognize the problem is.”