Common Cause Minnesota Calls on 100 Largest Corporations and Unions to Not make Political Expenditures

Yesterday, Common Cause Minnesota sent a letter to the 100 largest corporations and largest unions asking them to pledge not to make political contributions from their general treasury during the upcoming elections. The corruptive influence of these contributions will impair Minnesota’s ability to address the critical problems that face the state.

Political contributions from corporate treasury violate the most basic standards of corporate responsibility by placing profits ahead of everything else. These political donations too often are used to support candidates, issues and activities that are contrary to the publically stated values, policies and practices of the corporation.

We understand that some may be hesitant to sign a pledge. However, corporations should sign this pledge because it strikes at the core of good corporate social responsibility. And corporate responsibility is an area in which Minnesota businesses have long been leaders; they have led with a three-pronged approach that values people, the planet, then profits. As a result, many have worked to give back to the communities that have supported their businesses.

Corporations that make these contributions will have to explain to Minnesotans how the proposals of candidates that they have endorsed will not undermine a corporation’s effort to improve schools, protect our environment, and create a welcoming environment for all people.

Political giving is also a bad business decision, according to a major study undertaken by the Carlson School of Management at the University of Minnesota. The study concluded that companies making large political contributions had worse corporate governance and lower shareholder value. This study found that corporate donations may advance the political agendas and careers of the managers who make the donations–not the interests of the corporations they manage.

That is why shareholders should be very concerned with these donations, regardless of the short term impact on the corporate bottom line that may result from a perceived “friendly” candidate. .

And we have to ask the question: What are corporations expecting in return for political contributions?

It is hard to believe that big business would invest such enormous amounts of money without expecting something in return. Minnesota has largely avoided the political corruption that exists in other states because of our campaign finance system. If corporations continue to make political expenditures, Minnesota politics will more quickly mirror that of California, which experiences political gridlock and policy failure unrivaled by any other state in the union.

In a particularly dramatic example, Intuit spent $1 million to influence the California state comptroller race. Intuit opposed the creation of a free on-line tax preparation program, called Ready Return, that would be developed by the state because it could lose business to that product. The company spent $1 million in support of Republican Tony Strickland against Democrat John Chiang, who supported the Ready Return program.

And, as we all know, this is a bi-partisan problem. Just this spring, special interests backed by corporations spent $1 million in three democratic primary legislative races in California. That is double what is normally spent.

Voters may not have been aware that insurance companies, lawyers and other interests were calling most of the shots in the three campaigns because they had innocuous sounding names like California Alliance and Put California Back to Work. These special interests supported a Democrat in a primary challenge against a state assemblywoman who supported legislation that they were opposed to on climate change and health insurance reform.

This example will likely have a chilling effect in the California legislature and hand even more control over to the big moneyed special interest groups. Legislators will now quickly know the consequences to expect should they fail to listen to lobbyists that ask them to support or oppose an issue. Minnesota cannot afford this kind of governance.

The concerns of middle class families will be drowned out of the political process as a result of corporate contributions. If corporations truly care about strengthening our community, they will quickly realize that these types of political donations create a government that is unable to deal with the major problems of the day.

If big business and big labor want to invest in our government and elections, then they should be the biggest contributors to the unfunded political contribution refund program—a program has been extremely valuable in encouraging political dialogue in the state. A donation to this program, instead of giving to these shadowy special interest groups, will help minimize the potential for political corruption or the perception of it.

Restoring the political contribution refund program will help combat the wave of special interest money that is flowing into Minnesota. At 45%, Minnesota has the highest percentage in the country of small donors contributing to political campaigns; the national average is only 9%. We owe our success in this arena to the political contribution refund program. For years, this has meant that average Minnesotans have the ability to participate in and influence our political process—which is exactly the way it should be.

A study by the Campaign Finance Institute found that small donors have a positive impact on public policy. “A system in which candidates raise most of their money from large donors, in other words, is one that favors those most likely to lobby later on behalf of their particularistic interests. By extension, a system that increased the role of small donors, thus decreasing the dependence on large donors, could also reduce the subsequent pressure placed on lawmakers to respond to such particularistic concerns.”

Unfortunately, the system’s dependence on large donors is not a new issue for our country. More than 100 years ago President Roosevelt warned of the dangers of unlimited corporate spending in our political system. He called it “one of the principal sources of corruption in our political affairs.”

That perception of corruption or real threat of corruption is exactly why corporations and union should pledge NOT to make political expenditures. These groups have the ability to make their case to elected officials through the lobbying process, but aren’t entitled to “a vote in Congress, or a voice on the bench, or to representation in any public office.” – President Theodore Roosevelt