Waiting for ExxonMobil’s one percent

In the wake of the Citizens United decision, the American public were treated to all sorts of supposedly scary hypotheticals in which corporate America opened up their vast treasuries to dump billions and even trillions of dollars into the election process, an amount apparently sufficient in the minds of so-called campaign finance “reform” advocates to turn otherwise-thinking voters into propaganda-numbed robots unable to vote contrary to however the corporations tell them to.

The sums of corporate money that the “reform” community feared and predicted were substantial. For example, Michael Waldman of the Brennan Center wrote for the New York Times:

“Consider Exxon-Mobil. In 2008, its… profits that year – which it was legally barred from pouring into politics – were $45 billion. It was illegal for Exxon to spend that money on elections; now with this decision, it will be legal. Exxon or any other firm could spend Bloomberg-level sums in any congressional district in the country against, say, any congressman who supports climate change legislation, or health care, etc.”

“Bloomberg-level sums” presumably mean between $75 and $102 million, the least and greatest amounts of his own funds Mayor Bloomberg of New York City spent in his three campaigns. Winning candidates for U.S. House in 2008 averaged a little over $1 million according to OpenSecrets.org, and the most expensive race in the country had featured combined spending of both candidates of about $10.6 million. So putting between $75 and $102 million into a single U.S. House race, the scenario offered by Waldman, would mean dramatically outspending almost any candidate in the race by 15, 20, a hundred times or more!

At what is presumably the high end of “reformer” fearmongering on the amount of money available to corporate America for political spending, Senator Russ Feingold stated the following in a floor statement before the Citizens United decision was released, but after almost everybody understood what the decision would say:

“According to a 2005 IRS estimate, the total net worth of U.S. corporations was $23.5 trillion, and after tax profits were nearly $1 trillion. During the 2008 election cycle, Fortune 100 companies alone had profits of $605 billion. That’s quite a war chest that may be soon unleashed on our political system.”

Spending “Bloomberg-level sums” in every U.S. House race in the country only accounts for, at most, about $44 billion, less than a tenth of what Feingold suggests as the low­est amount of funding about to flood the political system, and an infinitesimal drop in the bucket compared to $23.5 trillion that the Senator from Wisconsin fears is poised to be spent influencing elections.

When “reformers” fear, they fear big!

It’s easy to dismiss the obviously absurd notion that corporations are going to devote “Bloomberg-level sums” to Congressional races, or that they are going to begin selling off their corporate assets in order to fund political spending (that’s what Feingold’s $23.5 trillion in corporate net wealth available as a “war chest” to corporate America implies). For that reason, few “reformers” seem willing to use these blatantly ridiculous hypothetical scenarios.

More often, “reformers” have offered as their scare scenario the idea that ExxonMobil might spend one percent of their annual profits on political speech (ExxonMobil seems to feature prominently in “reform” scare scenarios, presumably because they are the most profitable firm in the country and therefore the dollar figure is the largest possible “reasonable” amount as well as that oil companies are traditionally the top bogeyman for the campaign finance “reform” community). And, from a credibility perspective, the idea that ExxonMobil might spend just one percent of their profits to help elect friendly officeholders at least passes the laugh test.

Here, for example, is leading “reform” hysteric Fred Wertheimer in an interview:

HENN: Fred Wertheimer lobbies for strict campaign finance laws at Democracy 21. He points out that if Exxon Mobil had spent just 1 percent of its 2008 profits on political advertising in that year’s election, it would have outspent both Obama and McCain combined.

Monica Youn of Brennan Center echoed Wertheimer’s claim that ExxonMobil might spend one percent of corporate profits on politics in a hearing before the U.S. House Committee on the Judiciary, saying:

During the… 2008 election, Exxon-Mobil’s corporate profits totaled more than $80 billion… During the 2008 election cycle, all winning congressional candidates spent a total of $861 million on their campaigns – less than one percent of Exxon-Mobil’s corporate profits over the same period.

Youn also swerved into “Bloomberg-level sums” territory, suggesting that the ability of ExxonMobil to influence election had increased by 100,000 times compared to its PAC spending prior to Citizens United.

Other scare scenarios use different bogeymen – Goldman Sachs and BP seem to be popular ones – and different percentages get used in the “reform” scenario, typically ranging from one-tenth of a percent of corporate profits all the way up to ten percent. But one percent of ExxonMobil’s profits is the figure I’ve heard most often, and seems to be the settled-upon scare scenario.

To date, ExxonMobil’s one percent (or anyone else’s for that matter) has yet to materialize. The U.S. Chamber is vowing to spend $75 million this election cycle, possibly more. But this falls far short of the scare scenarios offered by “reformers,” accounting for less than two hundredths of a percent of the corporate profits of the Fortune 500 (most if not all of whom are likely members of the U.S. Chamber of Commerce), and an even smaller fraction of all corporate profits last year.

Target Corporation and Best Buy have both gotten attention (apparently to their dismay) for their contributions of $150,000 and $100,000, respectively, to an organization supporting pro-business candidates in Minnesota (both companies are headquartered in Minnesota). Target’s 2009 profit was $2.49 billion, while Best Buy’s profits were $1.32 billion last year. This amounts to six one-thousandths and seven one-thousandths of a percent, respectively, of their corporate profits spent or contributed for political purposes.

Clearly, the one percent of profits from corporations that “reformers” have claimed threatens to inundate the American political system have yet to arrive. Miniscule dollar amounts from the U.S. Chamber of Commerce and even more minute funding from Target and Best Buy seem among the few signs of noticeable spending from corporations in the 2010 election cycle.

So, where is ExxonMobil’s one percent? No doubt, scheduled to arrive right after Godot.

The Center for Competitive Politics is now the Institute for Free Speech.