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Defying the Odds

Defying the Odds
New book about the 2016 election.

Monday, January 13, 2020

Rich People, Not Corporations, Fund Super PACs

In Defying the Odds, we discuss campaign finance and campaign technologyThe 2019 update includes a chapter on the 2018 midterms.

“The current system of campaign finance is one that is dramatically different from the one that jumps out from the pages of the statutes,” according to a report from the Bipartisan Policy Center prepared by, among others, scholars from the New York University and Stanford law schools. “The current system has been shaped by a combination of legislative, judicial, and administrative actions, and is not a system that, in its entirety, Congress ever established.”

But the notion that the Citizens United decision opened the donation floodgates to 21st century corporations is a myth.

The power of corporate contributions in modern times — $95 million in 2016 — is arguably about the same as it was in 1896, when businessman Mark Hanna was able to raise the 2019 equivalent of $90 million from banks and insurance companies on behalf of Republican presidential candidate William McKinley to battle the populist Democratic nominee William Jennings Bryan. McKinley won.

Not one major American corporation spent money independently in support of a candidate in 2014 and 2016. Only two smaller companies in 2014 and 10 two years later made independent expenditures, amounting to a total of $753,282.

“Even when the expenditures reported by trade associations or other business organizations are considered,” according to the Conference Board study, “the role of business spending is relatively insignificant.”

Students of campaign finance believe a major reason for the relatively small corporate contributions — money specifically directed to an individual campaign, as opposed to super PAC contributions — is a reluctance to alienate customers. “You want to sell soap to everybody, not just to Republicans or just to Democrats,” said Corrado, the Colby College political scientist.

Another surprise since 2010 has been the degree to which grass-roots fundraising has changed politics, arguably serving as an antidote to big-money contributions. Internet-based, small-dollar individual contributions have soared, largely funding candidacies such as those of Sens. Bernie Sanders and Elizabeth Warren, and changing the dynamics of many congressional campaigns, especially on the Democratic side.