Political donations from business sector down from 2008 elections

Conventional wisdom says that the amount of money spent seeking influence in politics always goes up. As it turns out, that's wrong.

A weak economy has led to an unusual decrease in the money that corporations and their employees are directing toward congressional campaigns and political parties this election cycle.

Data released this week by the nonpartisan Center for Responsive Politics show that political contributions from 10 major business sectors are down about 5 percent from this point in the 2008 cycle. That contrasts with the last midterm election, when contributions were up 6 percent.

Although money is up 11 percent compared with 2006, the increase is much smaller than the upward trend had been in previous years. For example, donations in 2006 had increased 63 percent over contributions in 2002.

The decline is led by the financial sector, which posted a 14 percent drop in contributions. Donations from employees and businesses in the securities and investment industry -- which includes giant sources of campaign cash such as Goldman Sachs and Morgan Stanley -- are down 18 percent, or $10 million, from this point in 2008.

The industry has had every reason to seek favor with lawmakers as financial regualtion legislation has moved through Congress. But all contributions originate with industry employees, and those employees may have been unwilling to contribute in the uncertain economic environment of the past year. The industry also has shed more than half a million workers in the past few years, according to the Labor Department.

Donations from the oil and gas industry are down 4 percent, and the broader energy sector saw a slight increase of 1 percent. The transportation and construction sectors were down 13 percent.

Even the biggest boogeymen of Washington -- lobbyists -- dropped their support for lawmakers. Employees of lobbying firms gave $17.7 million in the first five quarters of this cycle. That's down 15 percent from the $20.7 million they had given by the same point in the 2008 election cycle.

"Political donors are no different from everybody else -- they are affected by the economy too," said Steven Elmendorf, a Democratic lobbyist. "Donations come from discretionary income."

Not all industries decreased their donations. Employees and corporations in the health sector increased their support 14 percent after a year of congressional debate over the health-care overhaul law. Doctors and other professionals gave $35.9 million, up from $30.6 million two years ago -- a much larger increase than that from the pharmaceutical industry, which went up by only 2 percent, to $12.2 million, after rising 27 percent in 2008.

Corporations can't give directly to candidates, but they can funnel contributions from employees through political action committees. Donations from PACs are usually directed by lobbyists or executives sometimes looking for access and favors from lawmakers.

Even these donations are relatively flat this election cycle. Business PACs have given about $160 million through the first quarter, up only 1 percent from donations at this point in the 2008 cycle.

"What you're probably seeing is the lingering implications of the recession," said Geoff Ziebart, executive director of the National Association of Business Political Action Committees, a trade group for PACs. "A lot of organizations have been sensitive to the recession and retooled their solicitations knowing that people have other needs."

Other types of giving have been affected by the recession, too, of course. According to the Giving USA Foundation, the level of charitable giving decreased 2 percent in 2008, the latest year for which information was available. That's the first time that charities have seen a drop in donations since 1987.