PACs Split Difference Between Parties

Posted July 30, 2010 at 6:28pm

Despite a volatile election season that could see the current majorities in Congress upended, K Street is adhering to its tradition of favoring incumbents by putting most of its money into the campaigns of Democratic candidates.

At the same time, these stakeholders are signaling that they recognize a possible GOP resurgence this November by contributing more heavily to Republican committees than their Democratic counterparts.

These giving patterns are underscored in the latest Federal Election Commission filings by political action committees affiliated with companies, unions, trade associations and other groups.

Just less than two-thirds of contributions from these outside companies and groups have gone to Democrats in this election cycle through the end of June, according to the FEC filings. That share is up from the 2008 election cycle, when Democrats garnered 57 percent of giving from these stakeholders.

On the other hand, Republican committees have so far collected more than half of PAC contributions this election cycle. That is a reversal from 2008, when they drew 46 percent of PAC contributions.

Fundraisers for both parties say they are not surprised by these opposite trends, saying that many companies are reluctant to anger incumbent Democrats who now are key to shaping legislation affecting them.

However, corporate interests that may be quietly rooting for a GOP takeover can do so more discreetly by helping Republican committees rather than bankrolling challengers.

“You are seeing a dual strategy,” one prominent Democratic bundler said. The fundraiser said K Street is essentially saying, “I need my access, but I want to change Congress.”

Republican consultant Monica Notzen said it has been difficult to raise money from these corporate interests for some of her House clients because many of them have firm policies of not supporting challengers. Others, she said, routinely give 60 percent of their PAC money to the Congressional majority, whichever party is in power.

Notzen said she expects K Street to start shifting some its money to Republicans in a few months, particularly if polls continue to show GOP candidates doing well.

“First comes the momentum, then comes the money,” she said.

Notzen, founder of the Bellwether Group, said she has heard from those overseeing corporate contributions that some companies may expand their political support in the closing months of the campaigns if their revenues are up.

“A lot of PAC people tell me they will have extra money to play with, but they will play late,” she said.

She and other fundraisers say PAC giving through the end of September, which will be made public in mid-October, less than a month before the election, could provide a more telling clue on which party corporate interests are betting on to win control of Congress.

Although K Street is plowing more money into Republican campaign committees, Democratic fundraiser David Jones questioned the GOP’s ability to use that extra cash effectively. He noted that both Republican House and Senate campaign committees had less cash on hand at the end of June than their Democratic counterparts — in the House, the GOP trailed by almost 2 to 1.

“The Republican burn rate is a lot higher,” he said. “What this means is that they are wasting a lot more money.”

The Democratic National Committee has followed President Barack Obama’s directive not to accept PAC money.

AT&T, which has contributed more to candidates than any other company, union or outside group in this election cycle, is an example of the two-tiered giving pattern.

The communications giant has given candidates about $2.5 million through June, which is almost evenly split between Democrats and Republicans. However, its giving to leadership and party committees is far more lopsided. Republican leadership PACs received $387,000 from AT&T, while their Democratic counterparts drew only $116,000. The company has given $120,000 to Republican committees and only $87,000 to its Democratic counterparts.

An AT&T spokesman did not respond to an inquiry about the company’s campaign giving.

However, a company statement on political contributions states that it supports candidates “who demonstrate integrity and character, support a strong private sector and show a free-enterprise philosophy.”

The statement lists other factors, including whether “candidates sit on a committee that addresses legislation affecting our business [and] whether they represent a district or state with a major AT&T business operation.”

The company also says it considers a candidate’s “committee standing and ranking, their elected leadership position, and, their voting record.”

In a year of contentious legislating, Democratic candidates were favored by a wide swath of industries, including health care, defense and transportation. Even the finance and insurance industry, which has battled Democrats on Wall Street reform, steered just over half of its contributions to Democrats, compared with 49 percent in 2008.

Only the energy and real estate sectors contributed more to Republican candidates. But even in these two areas, the percentage of giving to Democrats is up from the 2008 election cycle.

Michael Fraioli, a Democratic fundraiser who has worked for Sen. Tom Harkin (D-Iowa), former House Minority Leader Dick Gephardt (D-Mo.) and dozens of other candidates and incumbents, said that with more Democrats in Congress than in any time in recent years, it’s not surprising they would be raking in the big dollars from across the corporate spectrum.

“You will not get individual lobbyists to go against incumbents,” Fraioli said.

Not all groups followed the pattern. The American Bankers Association, which opposed the financial reform package that Obama signed, gave most of its PAC money to Republican candidates and GOP committees.

“We give to Members who are willing to work with us from both sides of the aisle,” said Peter Garuccio, an ABA spokesman.

A number of Democratic allies also appeared to be hedging their bets this year. The American Medical Association, which supported Democrats on the health care overhaul and battled Republicans on Medicare payments to doctors, gave almost twice as much to Democratic candidates as Republicans. However, the doctors’ group also contributed $75,000 to the Republican committees, compared with $45,000 to the Democratic committees.

Some groups, however, didn’t play favorites in sharing their wealth. The Medical Marijuana PAC, for example, donated $10,000 each to the National Republican Congressional Committee and the Democratic Congressional Campaign Committee.

Alex Knott contributed to this report.