PACs linked to foreign firms inject millions into U.S. elections

By Dan Eggen
Washington Post Staff Writer
Monday, October 18, 2010

As Democrats and Republicans spar over whether foreign money is polluting the midterm elections, a simple point is often overlooked: Hundreds of foreign corporations already play an integral and perfectly legal role in American politics through their U.S. subsidiaries.

Political action committees connected to foreign-based corporations have donated nearly $60 million to candidates and parties over the past decade, including $12 million since the start of 2009, federal contribution records show. Top donors in this election cycle include PACs tied to British drugmakers GlaxoSmithKline and AstraZeneca, which together account for about $1 million; Belgium's Anheuser-Busch InBev, at nearly $650,000; and Credit Suisse Securities, at over $350,000.

The donations must come from U.S. citizens or residents, and they make up a small fraction of overall political giving. Nonetheless, the role of foreign companies and their U.S. subsidiaries has become particularly sensitive in this year's midterm campaigns, which have featured widespread voter dismay over the economy and eruptions of anti-foreign rhetoric from both parties.

Democrats have made a campaign issue over speculation that the U.S. Chamber of Commerce is using foreign dues to help pay for a $75 million pro-Republican ad campaign, a charge the organization denies. White House adviser David Axelrod, appearing on CNN's "State of the Union" on Sunday, attempted to shift the thrust of the criticism to the more general issue of undisclosed donors.

But neither Democrats nor Republicans have drawn attention to PACs linked to global companies, a source of campaign funds that benefits both parties.

U.S. subsidiaries of foreign companies generally favored Republicans during the George W. Bush administration but have shifted the tilt of PAC contributions to Democrats since Barack Obama took office, according to a Washington Post analysis.

Foreign firms' lobbying

Overseas companies have a vigorous lobbying presence in Washington, and many of them played a prominent role in derailing Democratic campaign finance legislation that would have limited their U.S. political activities. The bill, blocked by Senate Republicans, would have classified more multinationals as foreign entities and, in early drafts, could have prevented them from having PACs.

More than a dozen foreign-connected companies, including subsidiaries of Germany's BASF Corp. and Switzerland's UBS Americas, registered to lobby against the legislation, records show.

The legislation came in reaction to a Supreme Court decision that eased restrictions of corporate political spending and raised the possibility that foreign companies might claim similar rights. That issue lies at the heart of unsubstantiated allegations that the Chamber of Commerce may be commingling foreign dues with political funds. The business group denies the charges, saying they are part of a White House-led "smear campaign."

Democrats have ratcheted up their attacks on Republican candidates and business groups for supporting policies that they say encourage multinational companies to move jobs overseas. Republicans and their allies have responded with campaign ads alleging that the Democratic-backed stimulus bill had the effect of creating jobs in China and other countries, a claim disputed by the Obama administration.

Despite the bluster, contribution records make clear that both parties benefit from contributions from U.S. companies with roots in other countries.

One of the leading contributors to federal candidates among U.S. subsidiaries is BAE Systems, the Arlington County-based arm of the British defense and aerospace company. Records show BAE's PAC has given nearly $600,000 to candidates in this cycle, with 55 percent going to Democrats. Top recipients include Sen. Kirsten Gillibrand (D-N.Y.), whose state includes many BAE employees, and Sen. Richard Burr (R-N.C.), a member of the intelligence, armed services and veteran affairs committees.

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