Why People Don't Understand Campaign Finance Laws

Published on June 8, 2007 08:00 AM
by Brad Smith

File Under: Faulty Assumptions, Press

Daily we are faced with anecdotal reminders of Stephen Ansolabehere's work demonstrating that the more people read newspapers, the more likely they are to be incorrect in their understanding of campaign finance laws.  Today we want to highlight a particularly invidious example of the way the press decreases - not increases, but decreases - public understanding of campaign finance laws and money in politics.  Invidious precisely because it is not in any immediately obviously way biased or inaccurate.

Today what caught our eye was a Bloomberg column by Jonathan Salant.  Salant's main point seems to be that Barack Obama isn't really a candidate of "change," because, as one source put it, "his profile of donors isn't that much different from other candidates."  By this, what Salant and his sources seem to mean is, "the Illinois senator drew from many of the same contributors as other White House hopefuls: employees of law firms; investment bankers; Hollywood celebrities."  Or, we might say, people with money to spend on politics.  Aren't we all shocked. It strikes us as little less than bizarre, this notion that any person who is elected Senator from a major state such as Illinois and considered one of the frontrunners to be the next president of the United States should somehow be dramatically different from everyone else - that is, dramatically out of the mainstream of American politics.  But apparently that is the idea - "change" doesn't come because lots of people want it - putting you in the mainstream if you, too, want "change" - rather, "change" should mean you don't have much support in the mainstream - a sort of Bolshevik approach to change. 

That odd assumption, we think, is bad enough, but we digress.  Here's what grabbed our eye.  Salant notes that, "Employees at the U.S. subsidiary of Zurich-based UBS AG, Europe's largest bank by assets, contributed $162,200 to Obama in the first quarter," and that, "UBS employees are also among the biggest sources of campaign funds for former New York City Mayor Rudy Giuliani."  And he goes on to note, "Employees of New York-based Goldman Sachs Group Inc., the world's largest securities firm by assets, are among his largest groups of donors; they are also among the biggest backers of his top Democratic rivals, New York Senator Hillary Clinton, 59, and former North Carolina Senator John Edwards, 53. Republican candidate Mitt Romney, 60, lists Goldman Sachs employees as his biggest source of contributions."

Salant adds: "UBS spokesman Doug Morris and Goldman Sachs spokesman Peter Rose said all donations are individual decisions." 

Now, all of this is accurate information, so far as we know.  Moreover, note that Salant takes a step that many journalists are no so careful about: Salant points out that employees of these corporations and firms make the contributions.  Many journalists routinely describe these as contributions by the organizations themselves.  this is because, like Mr. Salant, they usually collect their data from the Center for Responsive Politics - dont' confuse them with us - which lists on its website, each candidate's "Top Contributors." Under this big bold headline, it then list the names of corporations, unions and organizations rather than the actual donors.  Thus, for example, if you look at CRP's web page for Obama, you find that his "Top Contributors" include, in addition to UBS and Goldman Sachs, Exelon Corp, Time-Warner, Citibank, Viacom, even Harvard University - all entities prohibited by law from making contributions.  Only off in smaller type on the side does one find the disclaimer - these are individual contributions by people who just happen to work at these firms.  Now, you can't blame CRP if journalists use its data in this sloppy fashion - or perhaps you can, as CRP undoubtedly knows its data is used in this sloppy fashion on a routine basis, and it wouldn't be that hard to change the website design to make sure users get it right.  But then you wouldn't get to list "top contributors" as including big, bad, evil corporations.

Salant, though, is not so sloppy as most journalists using the CRP site - as we note, he says repeatedly that these are donations from employees at these firms.  But wait: he notes later in the article, "Employees of Chicago-based Exelon Corp., the largest U.S. utility owner by market value, were Obama's second-biggest source of campaign donations, right behind UBS, contributing $159,800. Exelon, which has more than 3.7 million customers in Illinois, didn't respond to several requests for comment."

Note that here Salant undercuts his earlier emphasis on employees making the contributions: now it may be employees of Exelon Corp, but the largest source is UBS, no longer UBS employees.  And while he says it is Exelong employees making the contributions, if that is true, why should Exelon be expected to comment?

Of course, the very notion of aggregating individual contributions by employer rather than donor suggests that perhaps there is more here than meets the eye - wink wink, nudge nudge and all.  That's why Salant's solicitation of comment from Exelon is interesting, as is this line: "UBS spokesman Doug Morris and Goldman Sachs spokesman Peter Rose said all donations are individual decisions."

Salant might have said, "These are not corporate donations but individual donations by people who just happen to work for these firms.  It would be illegal for the entities involved to reimburse employees, or to order or direct them to make particular contributions."  Or, more realistiically, he might have noted that the spokesmen "pointed out" or "noted" that the donations were all individual decisions.  After all, you "point out" or "note" facts.  When you merely "say" something (which is at least better than "insisted"), it may or may not be true.   So we get the classic "corporate denial:" in effect, the two spokesmen are asked to state, "Our organizations have complied with the law," while a third won't even face the music.  But why is anyone ever asked that question in an investigative journalism piece to begin with, unless there is some implication that they have broken the law?  And obviously the corporations - no matter what the truth - would have to deny that they had broken the law.  So the spokespersons statements add nothing to the article except to emphasize that maybe we should be thinking that these are not really individual contributions.  No where does the article simply state the law - corporate contributions are prohibited, and corporate pressure on employees to make contributions is prohibited.

Why mention Exelon's always suspicious, "didn't respond to request for comment?"  Why should Exelon be expected to comment on the political activities of its employees?  Suppose you worked for Exelon and made a political contribution: would you expect Exelon to comment publicly on your activity?  Of course, corporations sometimes do make comments on their employees' personal activities, such as "we're pleased that our employees are involved in the community," but do you think that type of statement would make the news about political donations?  Moreover, it would quite possibly be used as fodder if there ever were allegation (truthful or not) that Exelon was illegally directing contributions or basing personnel decisions on them: "Isn't it true that Exelon's public statements about the value it places on employees making political contributions created an atmosphere in which employees felt they were required to contribute?"   This is not exageration of how it would play out in the investigation - I have seen it.

We don't mean to pick on Mr. Salant: again, his reporting in this article is actually more careful than most.  And it may well have been his aim to make clear to readers that these are individual contributions.  But we suspect that in the end, like most news coverage of giving, the article is more confusing than enlightening for most readers.  Surely many will come away thinking that the corporate spokesmen are hiding something.  There is simply no good way to answer the question, "Is your firm violating the law with all these contributions?" any more than there is to answer the quesiton, "When did you stop beating your wife?"  The question is the allegation.  The denial cannot allay the suspicion, at least not if the questioner has any credibility.  And why even report these numbers if they don't have some deeper meaning?

In the end, then, we suspect that as a result of this article, there are a few more people in America going around with the belief that corporate contributions to federal campaigns are legal, even if UBS AG, Goldman Sachs, and Exelon are not making them; a few more who believe that in fact UBS AG, Goldman Sachs, and Exelon are making them, or at least [illegally, though we doubt the readers caught that] ordering employees to make them; more who are convinced that something is wrong when employees of corporations make contributions (which is to say something is wrong when most anyone makes a contribution); and still more who believe that Barack Obama is someone in the grip of Exelon Corporation, something that is almost certainly not true.

And this, remember, is a relatively good example of reporting!