New Study Debunks Myth of “Corporate Takeover” of American Elections

In urging support for the DISCLOSE Act back in 2010, President Obama said, “A vote to oppose these reforms is nothing less than a vote to allow corporate and special interest takeovers of our elections.”

This was not the first time the President echoed left-wing groups’ hysterical claims about the Supreme Court’s decision in Citizens United. On the day the Court handed down that ruling, Obama immediately denounced it as a “victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.” He has also repeatedly (and erroneously) suggested that foreign corporations could now bankroll American campaigns – most notably in his 2010 State of the Union Address – but continued to make these inaccurate assertions throughout 2010.

The President’s ominous intonations lent authority to the claims of politicians and journalists that corporations were engineering a surreptitious “takeover” of our democracy. However, these claims were based on oft-repeated myths about Super PACs and irresponsible speculation. With two post-Citizens United elections in the books, there is no evidence to support the “corporate takeover” narrative.

To this end, last Friday, Politico reported on a recent study of corporate political spending:

Despite the fears of progressive activists in the post-Citizens United era, a new study finds that corporations are still very hesitant to embrace super PACs.

A survey of 151 PAC staffers from the corporate and trade association world finds that most corporations prefer issue advocacy activities and traditional PAC giving to super PACs and other relatively new independent efforts.

Instead, most companies would rather use standard PACs to give directly to candidates or national political parties. Those traditional corporate PACs are limited to giving $5,000 per candidate per election.

The Politico article provides welcome and much-needed coverage of developments that CCP Chairman Brad Smith has been pointing to for months:

What we’ve seen in the two election cycles so far – that is, 2010, the first election with Super PACs, and 2012, to date – is that corporate spending is a very small part of the Super PAC picture. Only about 18% comes from corporations, 55% comes from individuals, and the other 26% comes from unions and non-profit organizations.

These statistics further vindicate the dissenting voices of scholars such as Prof. Richard Epstein, who predicted in 2011 that corporations’ profit motive (the very thing that “reformers” say should disqualify them from First Amendment protection) would restrain their political involvement:

The logic is simple. Political statements will win a corporation many enemies—enemies who can then boycott your products. The same political statements may win you some friends, but not friends who will double their purchases just because you have taken a stand they find favorable. Hence, the last thing that you want to do as a corporation is get involved with election campaigns when it is clear that no candidate embodies all the positions—and only those positions—that are ideal for the firm. Entering this swamp presents a real danger, and no sensible corporation should take that risky step.

The “corporate takeover” narrative is a myth, and its perpetuation is damaging to fruitful discourse on this important subject. Corporate involvement has not overwhelmed the voices of voters, nor has it poisoned our democratic process. Political involvement by businesses and labor unions contributes to an open and well-rounded national debate, where more viewpoints are better represented. This is reason to expand free speech, not restrict it.

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