August 2, 2020

Despite no corporate money pledges, Democratic federal candidates keep taking it

Print

While every Democrat running for federal office in New Mexico this year pledged to not accept money from corporate political action committees, they still benefit from corporate giving. 

Funneled to their campaigns from intermediary PACs that gather corporate money and then redirect it to candidates for office, the donations shine a light on the complications Democrats face when attempting to distance themselves from corporate special interests while still raising enough money to run winning campaigns.

Since the landmark Citizens United vs. FEC Supreme Court ruling in 2010– which opened political campaigns to unrestricted outside spending in elections by corporations, nonprofits, unions, and other organizations—a movement to enact reforms that would limit corporate influence in elections has grown, and found a home within the Democratic Party.

One group, called End Citizens United, encourages candidates to pledge not to accept donations from corporate PACs. Federal rules already prohibit candidates from taking donations from corporations directly.

In New Mexico, Democratic Reps. Xochitl Torres Small in the southern 2nd congressional district, Deb Haaland in the Albuquerque metro area’s 1st district, and Democratic hopeful Teresa Fernandez Leger in the northern 3rd district, have all taken the pledge. Also forgoing corporate PAC donations is Rep. Ben Ray Lujan, who is giving up his seat in the House to run for the U.S. Senate.

But despite the pledges, hundreds of thousands of dollars from corporations are flowing into their campaign coffers through other types of PACs that raise corporate money. Some belong to their colleagues in the U.S. House or Senate, referred to as leadership PACs. Others are trade association PACs, some of which represent small businesses and professionals while others represent industries dominated by big corporations.

“Democrats criticize corporate political activity and often promise not to take donations from corporations. But that is where leadership PACs come in handy,” said Michael Rocca, professor of political science at the University of New Mexico. “Candidates can take the popular position against corporate money and against Citizens United, but then enjoy the benefit of generous corporate donations.”

Leadership PACs

For decades, the Federal Election Commission has allowed current and former members of Congress to maintain PACs separate from their official campaign committees, often for the purpose of helping their colleagues. According to the Center for Responsive Politics, the lawmakers behind these so-called leadership PACs typically have two primary goals: currying influence with other members of Congress through donations, and covering expenses that can’t be footed by their campaigns or congressional offices. 

According to Issue One, a nonprofit organization that seeks to reduce the role of money in politics, over 85% of members of Congress maintain a leadership PAC. 

“In most cases, the corporation, labor union or trade association is giving to one lawmaker and then that lawmaker gets to call the shots about where that money goes,” said Michael Beckel, research director at Issue One

With significantly higher contribution limits– they’re able to give $5,000 per candidate versus $2,800 from individuals–leadership and other PACs act as significant conduits for money, and the influence that comes with it.  

“[Members of Congress] have a lot to gain from raising this money for their party,” said Rocca. “They can use the money to ask for something in return from more junior colleagues, like their loyalty.”

In New Mexico, federal officeholders are Democrats, and several maintain leadership PACs. 

Congressman Ben Ray Lujan has long been a major fundraiser, chairing the Democratic Congressional Campaign Committee, a fundraising organization for House Democrats, from 2014 until the party won its current majority in 2018. This year, he’s leaving the House in a bid to replace Sen. Tom Udall, who’s retiring. He took the End Citizens United pledge in May 2019 to not accept corporate PAC money, and his Turquoise PAC in 2020 is largely dominated by trade associations funds. But in the months prior to his pledge, he raked in about $150,000 in corporate PAC money which he did not return.

Sen. Tom Udall’s Southwest Leadership Fund continues to accept corporate donations, although in 2020 his PAC is smaller than years past, signaling his retirement. Most funds in Rep. Deb Haaland’s Fierce PAC originate from tribes. 

Rep. Xochitl Torres Small does not have a leadership PAC. Torres Small is defending her seat in southern New Mexico, largely considered a tossup by political analysts. While she’s taken the End Citizen United pledge, she’s still benefited from over $313,000 in donations from leadership PACs as well as campaign accounts from colleagues, many of which have accepted corporate PAC donations. She’s also received over $52,000 from corporate-aligned trade associations. Individual donations currently make up 69% of Torres Small’s contributions.

Then there’s Sen. Martin Heinrich, not up for re-election this year, whose Lobo PAC is a significant conduit this year for corporate PAC money to other candidates.

Lobo PAC has accepted tens of thousands of dollars in PAC donations from Comcast, Google, Hewlett Packard, Microsoft, and others. According to an analysis by New Mexico in Depth, Lobo PAC received 52% of its funding in the last two years from corporations.

A candidate who accepts money from a leadership PAC isn’t violating their pledge to not accept corporate donations, Patrick Burgwinkle, communications director for End Citizens United said. 

That’s because the problem of corporate money has more to do with the influence and access gained with the person the money is actually given too. In the case of leadership PACs, that person is the owner of the PAC, not the candidates to which the PAC then redistributes the money. 

“Leadership PACs give money to help elect more Democrats or Republicans to Congress and the decision on who to donate to resides solely with the member of Congress affiliated with the leadership PAC, not corporate lobbyists,” said Burgwinkle.

In the case of Lobo PAC, Heinrich has sole control over how the funds raised by the PAC are spent, confirmed Juan Sanchez, Heinrich’s state political director.

While Heinrich hasn’t pledged to reject corporate PAC money, he’s still earned End Citizens United’s endorsement through support of campaign finance reforms the group advocates, Sanchez said. 

To date, Lobo PAC has contributed $10,000 apiece to the campaigns of Reps. Deb Haaland, Xochitl Torres Small, and Ben Ray Lujan, and a smaller amount to Teresa Leger Fernandez, the Democratic candidate for Lujan’s vacated House seat in northern New Mexico. 

While corporate funded Leadership PACs are pervasive, not all are alike. Some rely on “ideologically-driven small dollar donors” instead of corporations, said Beckel. 

“Someone like AOC [Rep. Alexandria Ocasio-Cortez] is going to be raising money for a leadership PAC in a different way than a powerful committee chairman who’s been in Congress for decades,” he said. 

Ocasio Cortez’s Courage to Change PAC has raised roughly $560,000, none of which came from corporate PACs. Teresa Leger Fernandez accepted $5,000 from Courage to Change during the recently-concluded primary.

Last year, Roll Call reported that corporate PACs may be donating more to party committees and leadership PACs as growing numbers of candidates refuse to take these donations directly. 

But Sheila Krumholz, Executive Director of the Center for Responsive Politics, said there are other funding patterns that may warrant even more scrutiny. 

“Business PAC contributions to leadership PACs have accelerated, but non-business PAC giving to leadership PACs has accelerated even faster,” Krumholz said.

Krumholz added that while PACs may be an important mechanism for corporate interests to spend money, it’s important to look at wider donation patterns, such as where high-ranking employees and executives may be giving.

“If a PAC can give $10,000 to a candidate, individual partners, executives, and vice presidents can pass that and raise tens of thousands, hundreds of thousands of dollars for a single candidate,” said Krumholz. “Bottom line, there are lots of options available.”

Krumholz said corporations give funds not because of altruism but because they’re seeking to return a profit to their shareholders. 

“The best way to do that is not to engage in electioneering,” she said, “but to give to the people who have the ability to help them now.”

One other avenue for corporate funds to make their way into campaign accounts is through trade associations. There are many of them, representing a wide range of industries, from small business sectors, community banks, to larger corporations.

One New Mexico Democratic lawmaker said donations from trade associations aren’t in the same category as corporate money.

“Our campaign has taken the End Citizens United pledge, we’ve been endorsed by them, and we don’t take corporate PAC money,” Haaland said in a statement. “Trade associations represent millions of hard-working Americans such as small businesses owners and farmers and we are proud to have their support.”

While that may be true of some of the trade associations that have donated to Haaland– including the National Association of Realtors PAC, which gave her $3000 last year– it is not true across the board. 

Haaland has also accepted contributions from more corporate-aligned trade associations, including $1,000 apiece from the National Association of Broadcasters and the American Wind Energy Association.  

And Haaland is not alone. Lujan has accepted $10,000 from the American Cable Association, while Torres Small has accepted $1,000 apiece from the American Bankers Association and the American Hotel and Lodging Association.

Because trade associations are widely varied in terms of the interests they represent, End Citizens United doesn’t encourage candidates to disavow donations from such groups as strongly as with corporate PACs. Statistics provided by End Citizens United indicate that corporate PACs comprised about 40% of all PAC contributions to candidates in 2018, versus just 19% from trade associations, not all of which represent large corporations.


The following charts show the various types of PACs that have contributed to the 2020 Democratic candidates for federal office in New Mexico. Only Ben Ray Lujan, who vacated his congressional House seat to run for the Senate, has received corporate PAC money. He accepted the funds before taking the End Citizens United pledge to not accept corporate PAC money. Most of the candidates have received leadership PAC funding, which is often fueled by corporate PACs. Teresa Leger Fernandez was still one among several primary candidates when these numbers were reported, in mid-May. At that time she did not have leadership PAC money.

These charts were created by Bryan Metzger. Each PAC was categorized into seven different possible categories. “Labor” includes any contributions from union and workers PACs, while “corporate” includes direct corporate PAC contributions. “Ideological” includes special interest PACS dedicated to certain issues or groups priorities. Trade associations are classified either as “professional,” such as those representing doctors or realtors, versus “corporate,” such as the American Cable Association; this is in order to highlight the differences in types of trade groups. Leadership PACs and campaign committees are treated as one category, given that they fulfill a similar function. Miscellaneous includes donations from a range of entities including lobbyists and tribes.