Corporations are sending more contributions to super PACs

February 2, 2012

Corporations appear to be embracing, albeit slowly, new campaign rules that allow them to make direct contributions to political groups.

The super PACs that have been playing a significant role this election season are getting more of their funding from corporate coffers — 23 percent, according to an analysis of federal records.

That is up slightly from 19 percent in the 2010 cycle, when super PACs were first formed following the Supreme Court’s landmark Citizens United decision that year. In that case, the high court ruled that, under the First Amendment, the government could not restrict corporations from giving.

Democrats, including President Obama, criticized the ruling, raising the possibility that a flood of corporate money and special interest money could corrupt the political process.

Corporations, especially those with high public profiles, had largely refrained from donating to political groups, but the new data signal a possible shift, perhaps as executives become more comfortable with the new rules.

Among the donors, for example, is an Idaho company, Melaleuca, which gave $1 million to a political group backing GOP presidential candidate Mitt Romney, according to federal records released this week. The company, which had $1 billion in sales last year, sells vitamins, environmentally friendly cleaning supplies and other household products.

Frank VanderSloot, the company’s chief executive and one of its biggest shareholders, is a top fundraiser for Romney’s campaign.

“We don’t like to rile people up, but if you’re afraid to take a stand then you probably don’t deserve the benefits of good government,” VanderSloot said. “We feel really strongly that we need an administration that understands how the economy works and that understands what made America great in the first place.”

Restore Our Future, the super PAC backing Romney, received about 28 percent of its funding last year from corporate donors, according to federal records. A spokeswoman for the group declined to comment.

Other corporate donors to the PAC include: Oxbow Carbon, a company run by Florida investor William Koch, one of four sons of the co-founder of Koch Industries; Contran Corp., owned by Texas billionaire and longtime conservative mega-donor Harold Simmons; and Hubbard Broadcasting, which owns TV stations in several states.

American Crossroads, one of the largest conservative super PACs, has received an increasing share of its funding from corporations — 39 percent last year, compared with 29 percent in 2010. The group was founded with help from Karl Rove, a one-time political adviser to former president George W. Bush.

Whiteco Industries, a private company that owns billboards, hotels and other real estate ventures, gave $1 million to Crossroads in November. The company’s billionaire owner, Dean White, has been a large contributor to Republicans in the past.

Many political interest groups that have formed to take advantage of new rules allowing corporate donations have both a super PAC, which must disclose donors, and an affiliated nonprofit group, which can keep them secret.

Crossroads, for example, has an affiliated nonprofit called American Crossroads Grassroots Policy Strategies that does not disclose donors. It is unknown how much, if any, corporate money the nonprofit has accepted. A spokesman for both Crossroads groups declined to comment.

Corporations are not allowed to give directly to campaigns. But under the new guidelines following Citizen’s United, they can now direct general treasury money directly to political groups that operate independently of the candidates. Before the ruling, companies were required to create a political action committee to send donations to candidates.

So far, few publicly held companies have donated, although AT&T, through its own PAC, gave a $5,000 contribution to Crossroads in December.

Consol Energy, an $8 billion company publicly listed on the New York Stock Exchange, gave $150,000 to the super PAC backing Romney. The company’s chief executive is J. Brett Harvey, who is a member of Romney’s Pennsylvania finance committee.

BE Aerospace, founded by Romney donor Amin Khoury, gave $50,000 to the PAC. The company, which is public and valued at $4.6 billion, has received at least $80 million in U.S. government contracts, federal data show.

Advocacy groups are pushing for a new rule that would require public companies to disclose all of their political activity to shareholders in annual reports, arguing that disclosure would prevent risks to the business.

“There’s really no way for shareholders to have any say in how money is being spent, even though it’s their money,” said Mark Ladov, a counsel at the Brennan Center for Justice at New York University, which is helping to push for the rule.

Large corporations may be hesitant to donate out of fear that their customers or stockholders may protest. Target Corp., for example, faced a boycott organized by liberals after it donated to support a Minnesota gubernatorial candidate.

VanderSloot, the Melaleuca chief executive, said that so far only one customer has called his company to complain about its donation to the PAC backing Romney.

“She was really upset with us,” he said. “There are always ramifications.”

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