03/06/19

Money Myth #3: Refusing Corporate PAC Money Will Reduce Political Corruption


“I pledge not to take even a dime from corporate PACs!”

It’s become a familiar mantra. Refusing money from corporate political action committees (PACs) is all the rage among Democratic candidates, and a growing trend among Republicans as well. The implication is that these candidates are taking the moral high ground by refusing to be “bought” by big business. But is corporate PAC money really less ethical than other kinds of campaign cash? Or are these pledges more style than substance?

In the 2018 election cycle, as many as 100 candidates for U.S. Congress and Senate pledged to refuse contributions from corporate PACs. So far, every Democratic candidate for president has sworn off these types of donations as well. And although the “no corporate PAC money” pledges are a darling of the left, they are starting to be endorsed by some on the right. At least three Republicans have joined the ranks — U.S. House Reps. Phil Roe (TN), Francis Rooney (FL), and perhaps most interestingly, U.S. Senator Mitt Romney (UT). (Although Romney has made no public statement on corporate PAC donations, records show he has refused or refunded all PAC contributions since 2013.)

Same Dollars. Different Door.

The groundswell for refusing corporate contributions seems to have grown out of the belief that there’s too much money in politics. By ostensibly cutting ties with would-be corporate donors, candidates are signalling to voters that they are the type of person who makes the ethical choice, even if it means sacrificing valuable campaign dollars. But in reality, candidates often get those same dollars through a different door.

Conduit Contributions – For example, Beto O’Rourke, who proudly proclaimed that he wasn’t taking a dime of corporate or special interest PAC money, still accepted $170,000 collected by J Street PAC, a group which promotes a two-state solution to the Arab-Israeli conflict. J Street endorsed Beto on their website and provided a link for individuals to make contributions. J Street PAC also invited supporters to an event where they were encouraged to donate directly to Beto’s campaign. All together, Beto took in $170,000 in donations from J Street PAC’s efforts, though the PAC itself never wrote him a check. If J Street PAC had made a donation, it would have been limited by federal law to $5,000. Beto was able to accept the much larger $170,000 in donations, all the while claiming the moral high ground for taking no PAC money.

Individual Contributions – Candidates who refuse corporate PAC dollars still take individual contributions from corporate executives and lobbyists. Individual contributions are limited to $2700, which means a couple can donate $5,400 to a federal candidate in an election cycle while a PAC can only donate $5,000. A candidate who refuses corporate PAC money could turn down a $5,000 donation from Microsoft Corporation PAC, for example, but still accept many $2,700 donations from Microsoft executives. Limiting PAC contributions would not stop candidates from receiving donations with corporate strings attached, if that were truly the goal of a contribution.

Unions and Special Interest PACs – Most candidates and politicians who swear off corporate PAC money still accept donations from union PACs and special interest / ideological PACs, such as those promoting abortion rights.

Leadership PACs – Politicians who eschew corporate PAC money still typically take money from so-called “Leadership PACs”. Because well-known and powerful politicians can raise money more easily than their rank-and-file counterparts, they often collect donations in a Leadership PAC and then share the money with other less prominent politicians as a way to curry favor and retain their leadership status. This appears to be the case with the largest Democratic Leadership PAC this cycle, House Majority Leader Rep. Steny Hoyer’s AmeriPAC: The Fund for a Greater America. According to OpenSecrets.org., tens of thousands of dollars collected from corporate PACs were shared through AmericPAC with sworn anti-corporate PAC politicians.

More bark than bite.

Every Democrat presidential candidate may have vowed to refuse corporate PAC money, but the truth is that they were unlikely to receive funding from business PACs regardless of their stance. Corporations usually don’t get involved in presidential primaries. Nor do they typically give to challengers or newcomers. Most corporate contributions go to incumbents — especially high-ranking, long-time incumbents. At least 35 new members of the U.S. Congress promised to decline corporate PAC money. Now that they are incumbents it will be interesting to see if they close the door to corporate lobbyists and continue to shun corporate money.

Bottom Line:

Proponents of refusing corporate PAC money suggest that it will reduce corruption in politics and mitigate pay-to-play scenarios where a corporation gets favorable legislation in exchange for campaign contributions.

Those who defend corporate PAC money remind voters that this money comes from voluntary contributions of executives and employees of the company, not the corporate coffers. Moreover, all donations to and expenditures by corporate PACs are publicly disclosed at the Federal Elections Commission.

According to Geoff Zeibart, Executive Director of the National Association of Business Political Action Committees, “Employees and association members choose to participate in PACs because they want their collective voices heard on the public policy issues that face their industry.”

It’s hard to see how the motive behind these particular dollars would be more sinister than behind dollars from any other group of voters seeking to support like-minded politicians.


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