Corporate political action committees have widened their base of support and gained influence since Congress reformed campaign finance law in 2002.
When the law took effect, many corporate lawyers reviewed the structure of management-led political action committees to make sure they complied with the law. Lawyers discovered that PACs, which are committees formed to raise and spend money to elect and defeat candidates, could draw from a much larger base of contributors than they believed, said Bernadette Budde, senior vice president of BIPAC, a business PAC in Washington, D.C.
A more collegial approach to management in the 1990s had increased the number of employees in management positions. Public fascination with the stock market also qualified more employees as shareholders, she said.
Federal law prohibits companies from forming PACs, but managers and shareholders can create them. Corporations may pay administrative and fundraising costs.
Public interest groups such as Common Cause criticize PACs as insurance plans for incumbents.
Leaders of BIPAC try to convince companies to see them as a vital way to protect their business interests.
Not enough executives realize they should have a PAC or at least support one, said Gene Barr, vice president of political and regulatory affairs for the Pennsylvania Chamber of Business and Industry. He said he has trouble persuading members to donate money to Chamber PAC.
"You have to demonstrate the need for it," Barr said. Chamber PAC, which raises between $110,000 and $115,000 a year, monitors voting records and posts them on its Web site, pavotesforjobs.com.
Most of the contributions came in $300 or $500 increments from PACs and individual donors. Pennsylvania is among a minority of states that does not limit campaign contributions to state and local races.
The payments often represent the cost for company officers to attend fund-raising events and gain some quick face-time with a key legislator, said James Redmond, senior vice president of legislative services for the Hospital and Healthsystem Association of Pennsylvania, or HAPAC.
"One of the biggest misnomers about PACs is that we're somehow buying votes," he said. "None of the PACs have that much clout. it buys us access."
When the era of campaign finance began, PACs were the targets, Nelson said. Restrictions on PACs led to unrestricted contributions from issue-advocacy groups, such as the Sierra Club. Lawmakers banned soft money in 2002, again thrusting PACs to center stage, Nelson said.
Soft money refers to donations from so-called issue groups that do not go directly to a candidate. National political parties no longer are allowed to raise soft money or spend it on federal races. State political parties cannot raise soft money, but they can spend it.
An important trend is the additional funding power business PACs have generated since the rules changed, said Budde, who chooses which candidates BIPAC will endorse. BIPAC was one of the first business PACs when it started in 1963. Budde has helped run it since the beginning.
The notion of who is eligible to give has changed as corporate America broke down corporate hierarchies, Budde said. Middle-level managers may get paid less, but they are still management and are eligible to contribute to PACs.
Although the number of PACs stayed relatively steady since 1993, Budde insists the numbers belie a greater participation by business interests. Budde said mergers and acquisitions have swallowed names from earlier roles. In 1992, the U.S. Federal Election Committee listed 4,195 federally registered PACs. In 2004, it listed 4,040.
Corporate PAC contributions have increased, from $78.9 million in 1990 to $174.3 million in September 2004.
PACs serve an important role in the political process, Budde said.
Redmond has found that an update on contributions from competing PACs helps get members' checkbooks out. Tort reform has been a priority for the hospital association, so Redmond makes sure members know that the Pennsylvania Trial Lawyers Association PAC also contributes to campaigns. The lawyers' association has opposed tort reform.
State legislative races typically have lower contribution levels compared to the millions of dollars donated to federal races. The Hospital and Healthsystem Association has two PACs, one that contributes to state races and one to federal races. Combined, the PACs have about $270,000, but the majority is reserved for state races, Redmond said. The money comes in small amounts - about 3,000 hospital executives contribute on average less than $ 100 every year.
The more important the legislator, the harder it is to schedule meeting time, and the more important it is to donate, Redmond said. Republican Sen. Jeff Piccola, the majority whip, is expected to trounce Democratic challenger Eric Epstein in the general election, according to political observers. Donations keep rolling into Piccola's campaign. He has received more than $73,500 from PACs so far this year.
As majority whip, Piccola is third in command in the Senate, which negotiates major legislation and decides what bills go to the floor for votes. Political analysts expect Piccola to run for governor in 2006.
Members of key legislative committees come second, Redmond said. For example, the hospital PAC contributes to members of committees that handle health ' judicial matters, insurance and professional licensure.
Legislators who champion certain issues come third, Redmond said. HAPAC considers Democratic Rep. Ron Buxton, who represents parts of Dauphin County, a champion because he pushed hard for the Trauma Stability Act, which provided more money for trauma centers. The act passed in March.
Fourth place along the food chain belongs to "up-and-comers," Redmond said. They are freshman legislators who not only champion certain issues but get their colleagues to back them, too. Candidates in open seats come last. They do not have established voting records, and PACs tend to wait until there is a clear leader in a race before contributing, officials from local PACs said.
Barr remembers a call earlier in the year from a Republican candidate who asked Chamber PAC for donations to win a legislative seat in Philadelphia. The candidate supported the chamber's positions, but Barr knew a Republican had not won in that district in decades. He turned down the candidate, whom he would not name.
"Electability is part of the criteria," Barr said. "I mean, you don't want to throw your money away."
Although practical, the strategy has added to the number of advantages incumbents have over challengers, said Barry Kauffman, executive director of Common Cause Pennsylvania in Harrisburg. Incumbents amass a lot of money before the primary, and challengers shy away, he said. In the Nov. 2 general election, 101 of the 203 state House seats are contested. In the Senate, five out of 25 are contested.
In Central Pennsylvania, all five state Senate seats are contested, but the challengers have little or no financial support from PACs. Nor do most of the challengers in the House races. Eight out of 24 state House seats are uncontested. Seven additional races do not have a major-party challenger and are not viewed as competitive, said G. Terry Madonna, director of the Center for Politics and Political Affairs at Franklin & Marshall College in Lancaster.
Barr said it is a downside in campaign finance, but it can't be helped.
"Is there strength and power in incumbency? Absolutely," he said.
Politicians in uncontested races get less money, but PACs typically give a token amount, said Candace Nelson, academic director for the Campaign Finance Institute at American University in Washington, D.C. "They don't take anything for granted," she said.
The giving doesn't stop when the polls close. PACs give between elections to build personal relationships, said Peter Bauer, general counsel for the Pennsylvania Automotive Association. He oversees the association's PAC. Candidates use PACs as sounding boards when they are working on legislation.
It is hard to trace a quid pro quo PAC contribution that is timed before a particular vote, said Nelson, who monitors campaign finance at the national level. Typically, candidates are rewarded for their voting records. PACs will withhold donations from candidates who vote against their issues.
Still, PACs want a return on investment.
"Whether they tell you this or not, they expect something in return," said Jon Delano, a political analyst at the H. John Heinz School of Public Policy & Management at Carnegie Mellon University. "Its either a reward for help in the past, tried-and-true votes or government assistance of some sort."
PACs do not expect legislators to vote their way all the time. A legislator might have to compromise to get another bill passed, Bauer said. A PAC has to look at a candidate's whole record sometimes.
"You try to understand," Bauer said. "You try to see what other influences are out there."
In the past year, the automotive PAC, composed of car dealers, successfully lobbied against fee caps for emissions testing.
Although no big issues are on the horizon, it pays to show up at a legislator's golf outing and make a few donations to maintain relationships, Bauer said.
Despite its reputation as the pro-business party, Republican candidates do not have a lock on contributions from business, Nelson said. On the federal level, PACs contribute to the party in power, which was the Democratic party in Congress in the late 1980s and early 1990s.
When the Republicans took control of the U.S. House of Representatives, business PACs slowly began to move their financial support from Democrats to Republicans. Generally, PACs avoid giving to candidates of both parties.
The four legislative leadership PACs are the exception, said Redmond of HAPAC. HAPAC gives to both parties' leadership caucuses in the state House and Senate.
