The United States is in a political season and candidates at various levels are looking for funding to strengthen their campaigns as they gun for office. The race towards having a large pool of campaign funds has seen companies donate a staggering amount ahead of the polls.
Data presented by Buy Shares indicates that as of September 8, 2020, top organizations had contributed about $255.20 million towards this year’s elections campaign. Organizations contributing towards the Democratic Party campaign have donated about $135.59 million. Elsewhere donations towards the Republican Party campaign activities amounts to about $119.61 million.
Shipping company Uline Inc’s $40.09 million towards the Republican Party campaign is the highest among organizations from both political parties. Fahr LLC is the highest donor towards the Democratic Party activities at $39.65 million.
Contributions from the highlighted organizations will be channeled towards funding activities for federal candidates, parties, political action committees (PAC), federal 527 organizations, and Carey committees. The totals do not include contributions to 501(c) organizations. According to the law, PACs are subject to disclosure requirements at the federal and state levels.
It is worth mentioning that contributions by organizations to campaigns were made legal in 2010. Initially, organizations only contributed through individual members, employees, owners, and immediate families. The new laws made it possible for different companies to directly contribute to their preferred party.
How campaign contributions influence companies
Political contributions are mainly used to cover the arising expenditure like the cost of travel, political consulting, and the direct costs of communicating. In the United States, political contributions are mainly channeled towards advertising. Projections indicate that this year’s political advertising spending will hit an all-time high.
There is still debate if the organization’s donations influence politics. According to experts, successful companies usually bet their contributions towards the winning candidates. On the other hand, small firms are likely to back candidates who will lose. Political pundits argue that big companies are in a better position at foreseeing future events. To a large extent, the company’s usually support candidates or political parties that are likely to support their priorities. Additionally, in some incidents, stocks of companies that backed the winning candidate might rise after the election. The boost in stock prices tends to attract investors.
On the other hand, some political scientists and economists argue that campaign contributions might send a signal to convince investors that the company will oppose new regulations. At the same time, it might be a signal that the executives are simply using the company money to support candidates they like personally under the guise that it will benefit the firm in general.
From the data, the Democrat Party has a slight edge over the Republican Party despite the former beginning the campaign trail on a high note. The Republican presidential elections campaign is reportedly facing a cash crunch to fund their activities. The party’s initial large pool of funds was directed towards swaying the public opinion that President Donald Trump mishandled the coronavirus pandemic.
The threat of organizational contribution to political systems
With more funding coming from organizations, there is still a call for further tightening of the law with an argument such contributions to political campaigns erode democracy. Some state-corporate donation leads to post-election lobbying and access to politicians instead of shaping and reinforcing policy decisions by politicians.
A section of reformers opines that the increasing contributions from an organization are detrimental to the entire democratic process. But, this ignores the important check that special interests place on the potential for tyranny. In the U.S, the focus has been on sealing loopholes in regard to the entry of ‘dark money’. Such contributions usually target to influence the outcome of the polls with the source remaining undisclosed. Nonprofits and shell companies are notorious for contributing money that cannot be traced back to the donors.
In recent years, the U.S has been facing the threat of dark money from foreign forces. The situation is further complicated by the fact that the law is not clear on handling the scenario. Some political proponents have termed it as a disturbing lack of transparency that allows corporations and outside organizations to secretly fund election-related activities.