In a preview of what’s in store for 2012, political campaigners – including candidates, parties, and outside interest groups – spent an estimated $4 billion this election season, shattering all records for nonpresidential contests, according to the Washington Post. Data provided by the Center for Responsive Politics (CRP) show that by late October, Republicans raised $1.64 billion to Democrats’ $1.59 billion. In the first major vote after the landmark Citizens United Supreme Court decision, many of these expenditures flowed from union and corporate coffers.
On Monday, The Conference Board released its long-awaited Handbook on Corporate Political Activity, which helps managers and boards navigate the practice of campaign spending in a climate charged by shareholder resolutions on political donations and other challenges. The Handbook complements the October joint release of How Companies Influence Elections by the Sustainable Investments Institute (Si2) and the IRRC Institute, which found that few boards engage in this type of oversight, despite potential corporate risks.
First, the elections. Of the total reportedly spent, $300 million came from outside groups – particularly on the Republican side. (Full tallies will come later, as final filings are made with the Federal Elections Commission.) Secret donors contributed 42 percent of this outside money to nonprofit organizations, according to a CRP Election Day analysis, which includes $123 million spent on Congressional races. “It’s the how-to for 2012,” said Ellen Miller, founder of CRP and executive director of the Sunlight Foundation, which supports transparency in government. ”It’s how to use corporate money, how to use secret money, to buy elections. . . It’s going to be no-holds-barred.”
- the US Chamber of Commerce, which spent at least $35 million, and planned to spend upwards of $50 million; and
- three conservative organizations with shared lineage, office space, and operatives, including:
Campaign finance legislation such as the DISCLOSE Act, which increases transparency of these groups and was passed by the House in June, awaits Senate action, but Republicans have filibustered it twice; a split Senate is unlikely to change this outcome. Plus, one of its chief proponents, Sen. Russ Feingold (D-Wis), was defeated last night by Republican businessman Ron Johnson.
- The legal framework for understanding political giving, including an overview of federal/state pay-to-play laws and how corporations can monitor the political engagement and policy positions of the trade associations to which they belong;
- The rewards of a robust political engagement program, and the risks (especially to shareholders) if such programs aren’t managed well, and examples of companies that have successfully managed political engagement programs; and
- Standards of director conduct that can potentially apply to political activity and the importance of embedding political-spending decisions into a corporation’s ethical framework and culture.
“Whatever happens on the legislative front, any corporation participating in political activity without a rigorous governance oversight process heightens its risk exposure,” said co-author Bruce Freed, President and founder of the Center for Political Accountability (CPA). “Decisions about government affairs need to be integrated across a company and its governance. The handbook offers a guide for creating an ethical corporate culture, to bring meaningful transparency and accountability to how a company handles political spending.”
Two years in the making, the Handbook will help generate information that will help populate an index CPA is developing that will rate companies on their political disclosure and accountability policies and practices, Freed says.