Campaign funding reform finds backers in business

Some corporate leaders weary of the process

March 24, 2001|By KNIGHT RIDDER/TRIBUNE

WASHINGTON - Tired of pouring hundreds of thousands of dollars into politics every year, a growing number of corporate CEOs are not waiting for new campaign finance laws to rein in political money. They've simply quit giving the big bucks.

Steve Palko, the president and co-founder of Cross Timbers Oil in Fort Worth, Texas, donated about $150,000 a year to politicians, including unregulated "soft money" donations to political parties. Finally, he decided he could no longer justify it.

"This way of doing business, I think, erodes the public confidence in the system," he said. Then, as if that may have sounded too self-righteous, he added: "A lot of us have simply gotten tired of the cost."

These fed-up executives - from a prosperous Texas oil man such as Palko to investor Warren Buffett - are the flip side of the Fat Cat stereotype that has tainted American politics for 150 years or so. In fact, discontented executives have formed something of a cheering section for Sens. John McCain, the Arizona Republican, and Russell Feingold, a Wisconsin Democrat, and their attempt to ban unrestricted soft money donations to political parties.

Their stand defies the posture taken by most business groups. The U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Industrial Political Action Committee say that decisions about giving money to candidates and political parties should be left to individuals, corporations and unions, not to the federal government.

"We have a First Amendment right to participate in the realm of public ideas," said Chamber of Commerce political director Bill Miller. He argued that, compared to corporate budgets, "the amounts of money put into ... elections in general is a really insignificant amount of money."

However, a poll of corporate executives last October by the Tarrance Group, a Republican public opinion firm, found that more than half said the amount of money solicited by candidates and parties was either "excessive" or "high, but not excessive." Two out of three of those polled supported a ban on soft money.

Some 307 business and civic leaders have endorsed a campaign to enact McCain-Feingold being mounted by the Committee for Economic Development, a group of business and education leaders devoted to public policy research.

"I've heard people say that you have to pay to play; that you give to get something positive or avoid something negative," said Charles E. M. Kolb, the president of CED. "That's an outrage. They are our employees. No corporation, no union, no individual, ought to give them [politicians] a tip to get something or avoid something."

In fact, most corporations stay away from the big money game.

Corporations gave $228.5 million, or about half, of the record-breaking half-billion dollars in unregulated donations raised by the two parties over the last two years. But 64 percent of the corporate contributions came from just 377 corporations that each gave $120,000 or more, according to an analysis conducted for Knight Ridder by the Center for Responsive Politics, a research center that tracks money in politics.

Many business executives wouldn't mind tougher rules. Some top executives at Goldman, Sachs & Co., for example, support the McCain-Feingold bill.

"They're acting as private citizens and don't reflect the firm's stance," said Kathleen Baum, a spokeswoman for Goldman Sachs. The investment banking firm's top executives donated a total of more than $1 million in soft money to Democrats and Republicans in the last two years, but the firm itself does not make political donations.

Political parties were originally supposed to use soft money to pay for administrative costs and party-building activities such as voter registration and get-out-the-vote efforts. But the past eight years have seen an explosion in the use of soft money to pay for "issue ads," thinly veiled political ads that promote candidates without invoking their names.

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