$6M flows through loopholes in pledge against corporate PACs

Some money comes from business groups that aren’t PACs, and more from colleagues or party committees that take corporate money

California Rep. Josh Harder has sponsored a bill to ban corporate PACs and has pledged not to accept any corporate PAC money for his campaign account.  (Tom Williams/CQ Roll Call file photo)
California Rep. Josh Harder has sponsored a bill to ban corporate PACs and has pledged not to accept any corporate PAC money for his campaign account. (Tom Williams/CQ Roll Call file photo)
Posted August 3, 2021 at 5:00am

Rep. Josh Harder, a Democrat from California’s 10th District in the Central Valley, has made his opposition to corporate PACs a signature issue. He sponsored a bill to ban such political action committees, and his fundraising appeals to donors invoke those views. 

But Harder’s campaign account still includes other PAC and committee money — nearly $200,000 of the $2 million he has raised so far this year — from unions and ideological groups, as well as from his fellow lawmakers who do take corporate PAC donations, such as House Majority Leader Steny H. Hoyer of Maryland. Harder has also received money from colleagues’ leadership PACs and from the funds of business organizations and trade associations, including the Crop Insurance Professionals Association, according to Federal Election Commission records.  

He’s not the only one. A CQ Roll Call review of fundraising disclosures during the first six months of this year found that most of the 62 members of Congress who say they have sworn off donations from the PACs of individual companies have received contributions from colleagues’ campaign accounts or leadership PACs, many of which are full of corporate PAC donations.

Many also report contributions from the PACs of business and professional organizations, such as the American Bankers Association and the American Medical Association, that technically do not violate the pledge because they aren’t tied to a single company. It would violate the pledge, for example, to take a donation from Allstate’s PAC, but not if you take, as members touting the pledge have, from the American Property Casualty Insurance Association PAC, the American Council of Life Insurers PAC or the Council of Insurance Agents & Brokers PAC.

Other PACS contributing to the incumbents who say they’ve sworn off corporate money include those of the National Beer Wholesalers Association, American Crystal Sugar Co., Mortgage Bankers Association, National Association of Realtors, American Association for Justice and the American Society of Anesthesiologists. All such groups represent business and professional interests that seek to influence lawmakers and officials in Washington, D.C. 

It is, like union and ideological PAC cash, special interest money. 

All told, the 62 incumbents in the House and Senate, nearly all of them Democrats, have hauled in $6.1 million in contributions from PACs and committees during the first six months of this year. The majority, about $2.4 million, came from PACs and committees controlled by lawmakers, including members’ campaign accounts and their leadership PACs, which routinely accept donations from corporate PACs. 

Almost $1 million came from the PACs of lobbying groups and law firms, professional associations and business interests, the analysis shows. And some members who have taken the pledge benefit from another stream of corporate money that doesn’t show up in their own reports because it is spent by party committees and super PACs for independent ads that boost their campaigns or attack their opponents. That spending was not included in this analysis. 

Harder’s office did not respond to a request for comment, but when he introduced his bill to ban corporate PACs earlier this year, he said industry influence was rampant. 

“Throw a rock in any direction from Capitol Hill, and you’ll find a corporation looking to buy somebody’s vote,” he said. “It’s corrupt, it’s just plain wrong, and it has to stop.”

The other two sponsors of the legislation are Democrats Jared Golden of Maine and Mike Levin of California. Golden’s campaign disclosed about $100,000 in total PAC and committee contributions out of $1 million raised during the first six months of the year, mostly from fellow lawmakers and their leadership PACs. Levin’s PAC total was about $160,000 out of $944,000 raised for the same period, mostly from the PACs of lawmakers, ideological groups and unions. Neither office responded to requests for comment. 

“Corporations have too much power over American politics,” Golden said in a statement upon introducing the bill. “Our government should be responsive to the people, not corporate special interests.”

For this analysis, CQ Roll Call downloaded all contribution reports filed this year by members who have taken the pledge and excluded contributions from individuals, a pot of money that can include corporate influence since many corporate executives give personally in addition to supporting a company PAC. 

Eight lawmakers who took the pledge reported taking no contributions from political committees of any kind this year: Reps. Ro Khanna, Dean Phillips, John Sarbanes and David Trone, and Sens. Maria Cantwell, Jeff Merkley, Chris Murphy and Bernie Sanders, all Democrats.

The no-corporate-PAC lawmakers who have hauled in the most in other PAC and committee contributions were those who had elections this year. Georgia Sen. Raphael Warnock, who won a runoff in January, topped the list, followed by New Mexico Rep. Melanie Stansbury, who won a special election in June. Warnock’s campaign disclosed bringing in more than $530,000 in such money, the majority coming from leadership PACs and funds controlled by lawmakers, candidates and party committees. Stansbury collected more than $340,000, mostly from leadership PACs and from candidates, party committees and ideological groups.

Republicans retaliate 

Though the vast majority of incumbents who have pledged not to take donations from corporate PACs are Democrats, three Republicans have also sworn off such donations: Sens. Josh Hawley of Missouri and Ted Cruz of Texas and Rep. Matt Gaetz of Florida. 

Hawley and Cruz got caught up in a corporate backlash, with companies saying they would cut them off after they voted against certifying certain Electoral College results on Jan. 6. Some corporations have said their PACs would no longer donate to the 147 lawmakers, Hawley and Cruz among them, who voted against certifying the election for President Joe Biden, though many corporate PACs have restarted their donations after a temporary pause.  

Cruz explained his decision in an April op-ed in The Wall Street Journal, describing “woke CEOs” as “fair-weather friends to the Republican Party.”

“In my nine years in the Senate, I’ve received $2.6 million in contributions from corporate political-action committees. Starting today, I no longer accept money from any corporate PAC,” he wrote.

The Texas Republican disclosed receiving just $3,600 from political committees this year, including $1,300 in January before he announced his pledge. But he also took $1,000 in June from the PAC of Baker & Hostettler, a Connecticut Avenue firm with an extensive roster of corporate clients. Hawley has reported about $18,000 in such donations, including $5,000 from a Mississippi bank’s PAC, while Gaetz disclosed a total of $3,000 of such money, all from the campaign of fellow GOP Rep. Jim Jordan of Ohio. Neither Cruz nor Hawley is up for reelection in 2022.

Representatives of corporate and business PACs say they’re baffled that their committees, which are bound by strict donation limits and public disclosures, have been increasingly shunned. They argue that corporate PACs are misunderstood, given that the donations come from the personal contributions of executives, not a company’s treasury. However, companies do pay for their employees to run the PAC.

“We are weary of the ‘no PAC’ pledges we’ve seen emerge in recent election cycles,” said Micaela Isler, executive director of the National Association of Business Political Action Committees. “The reality is, business PACs raise money from individual, small-dollar donor constituents in every congressional district across the country. The average contribution to an employee-funded and business trade association PAC is $26 per pay period.”

The no-corporate-PAC pledges caught on among Democratic challengers who helped their party win the House in the 2018 midterms. There was almost no downside, however, to challengers swearing off corporate donations because most corporate PACs give only to incumbents.

Breaking the pledge 

But once in office, incumbents are potentially passing up money that could help them fund their reelection efforts. 

So far, just one incumbent, Democratic Rep. Elaine Luria of Virginia, has reversed her position and begun accepting donations from company PACs. Since her switch, she has disclosed donations totaling more than $120,000 from corporate PACs, including those of FedEx, Lockheed Martin, Boeing and Walmart, according to federal election records. 

Advocates urging officials to take the pledge, especially the group End Citizens United, say it remains important.

“Corporate PACs exist for one reason, and it isn’t for the benefit of their community or the country,” said End Citizens United spokesman Adam Bozzi, whose group has its own PAC to advocate a campaign finance overhaul and to make endorsements in congressional races. 

“It often isn’t even for the benefit of their own workers,” Bozzi added. “They exist to pad their bottom lines, often advocating for rigging the tax code in their favor or anti-consumer deregulation. We’ve even seen many corporations blow off concerns about the attack on the Capitol in order to buy access to members of Congress who will help them with their pet projects.”

Bozzi drew a distinction between corporate PACs and other types of PACs, saying that grassroots organizations “don’t have the luxury of unlimited corporate funds to offset overhead and administrative costs.”

“Members of Congress who don’t take corporate PAC money separate themselves by going above and beyond to send a message to their constituents that they are putting their interests ahead of corporate interests, and they are making a significant sacrifice, leaving hundreds of thousands of dollars on the table,” he added.