It doesn’t take a crystal ball to tell the implications of Democrat Conor Lamb’s special election victory just a few weeks ago for congressional races in November: Corporations should expect a hypercharged grab for their political money.
“As the partisan struggle for political, cultural and legal supremacy grows even more bitter, political spending is ratcheting up,” political analyst Francis Wilkinson observed in Bloomberg View. Given Lamb’s narrow victory over Republican Rick Saccone in a Pennsylvania district that supported Donald Trump by nearly 20 points, Wilkinson wrote, Democrats will open their checkbooks and Republicans will accelerate their dialing for dollars.
{mosads}“Republicans, alarmed by a potentially disastrous cascade — loss of control of the House followed by two years of public hearings into Trump’s malfeasance followed by more electoral trouble — will call on corporate benefactors and wealthy donors to increase funding to stave off defeat.” At last count, the special election in Pennsylvania cost at least $17.8 million, according to Axios. Lamb raised $3.9 million and Saccone raised $600,000 in direct contributions, while outside groups spent $2.6 million in support of Lamb and $10.7 million in support of Saccone.
Looking ahead to November, Wilkinson noted, “Crazy money is indicative of crazy stakes,” and furthermore, “Fear and loathing should lead to record fundraising.” It’s likely that corporations will be asked to shell out in support of Democrats too in this sky’s the limit election. Lamb’s success raises the question, according to Wilkinson, of “whether corporate funders, who just benefited from an enormous GOP tax cut, will begin to hedge their 2018 bets by spreading money to more House Democratic candidates.”
In the end, increasing pressure on corporations for donations to big spending outside groups is a recipe for increased risk, especially in today’s volatile political climate. Will a company be on the receiving end of an angry tweet from the nation’s chief executive? Will a donation support a candidate who ultimately goes off the rails in the heat of the campaign and brings blowback or worse for the donor and its brand? Or will a third-party group spend a company’s donation in a way that clashes with the company’s core values? How would the company weather media accusations of hypocrisy?
The sensitivities may be heightened when corporations spend political “dark money,” whose source is hidden because some recipient groups are not required to disclose. Today’s 24-hour news cycle and hyper-partisan politics fuel a “gotcha” atmosphere. It can quickly turn a leak about dark money into a bad news gusher. The Center for Political Accountability has advocated a series of methodical steps that companies can adopt voluntarily to ensure transparency and accountability of political spending and to mitigate the risks. In such high-stakes elections, these steps matter more than ever.
As our board member and retired Microsoft executive Daniel Bross has acknowledged, “America’s leading companies are speaking out on issues central to their values, fundamental to business success, and rooted in a commitment to enhancing global sustainability. Yet it is important that companies continue to fulfill their responsibility to adopt and advance strong corporate governance policies and practices for participation in the political process. These issues speak definitely to the character of a corporation — and its leaders — in the 21st century.”
Bruce F. Freed is president of the Center for Political Accountability.