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Corporations making political donations through interest groups

Marketplace Staff Oct 7, 2010

Corporations making political donations through interest groups

Marketplace Staff Oct 7, 2010


Kai Ryssdal: Outside interest groups — that is, organizations that operate independently of political campaigns — are spending record amounts of money in this year’s midterm congressional elections. Almost $100 million so far. That is a relative drop in the bucket when, all told, $3 billion — $3 billion! — might be spent on elections this year.

But a lot of the money that’s going to those outside groups is coming from businesses. The Supreme Court ruled earlier this year that’s OK: companies and unions are allowed to spend as much as they want on campaign ads right up ’til election day.

Nancy Marshall Genzer reports from Washington they’re taking full advantage of the ruling.

Nancy Marshall Genzer: The biggest spending outside interest groups are aligned with conservatives this year. One of the largest, American Crossroads, launched a $4 million ad campaign this week. It’s targeting Senate races in eight key states, including Nevada, where Senate Majority Leader Harry Reid is running for re-election.

American Crossroads adHarry Reid says no one can do more than he can. Really Harry?

The American Crossroads ads talk about reining in President Obama. That message appeals to corporate donors concerned about the laws overhauling health care and financial services.

But these donors find something else appealing about American Crossroads and its sister group, Crossroads GPS. American Crossroads has to reveal its donors, but not until after the elections. Crossroads GPS never has to list them.

Dave Levinthal is with the Center for Responsive Politics. He says companies are shoveling donations into outside groups like these, because they like the anonymity, and for good reason.

Dave Levinthal: Because some of your customers may be liberals, some may be conservatives. And if you’re on the wrong side of the message, then it’s very possible that they’re going to go elsewhere with their business.

Outside groups aren’t new. Earlier this year, though, the Supreme Court ruled that corporations and unions can spend unlimited amounts on campaign ads. Hence, the avalanche of money into outside groups.

Columbia Law School professor Richard Briffault says these groups also allow corporations to pool their money.

Richard Briffault: And then, in effect, having it put to work by political operatives that you think are supporting the interests of your corporation.

President Bush’s political advisor, Karl Rove, helped found the Crossroads groups. But American Crossroads spokesman Jonathan Collegio says there are liberal interest groups, too.

Jonathan Collegio: Liberal and center-left organizations kind of designed this framework of outside groups that you see operating on the right.

Collegio says liberal groups would like to match conservatives’ political spending. They just don’t have the money.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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