[EL] Campaign Contributions from Corporate Executives in Lieu of Political Action Committees 4/29/13

[David Mason]

Mark me down as not surprised by this "substitution."

My firm helps manage a large number of corporate PACs.  There are some
Federal candidates who prominently swear off PAC funds, but who return PAC
checks with an explicit appeal for the firm to find some corporate
executives to give instead.

It is difficult to discern what principle of good governance or ethical
campaign practice is advanced thereby.

The abstract could be read to suggest that this substitution is driven by
corporate executives, but in my experience, it is the candidates'
fundraisers who encourage this aggressively.

Setting up joint fundraising committees with state parties or other
entities is another way some "personal ban" candidates accept PAC money.

More fundamentally, this is just Econ 101: there are always substitutes.
The regulatory environment influences how expensive they will be and what
collateral effects may be created.

Dave Mason

On Mon, Apr 29, 2013 at 10:37 AM, Rick Hasen <rhasen at law.uci.edu> wrote:

>
>  “Campaign Contributions from Corporate Executives in Lieu of Political
> Action Committees” <http://electionlawblog.org/?p=49670>
> Posted on April 29, 2013 7:35 am <http://electionlawblog.org/?p=49670> by Rick
> Hasen <http://electionlawblog.org/?author=3>
>
> Brian Kelleher Richter and Timothy Werner have posted this draft<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2237685>on SSRN.  Here is the abstract:
>
> To distance themselves from the specter of special-interests, some
> Congressional candidates instituted personal bans on campaign contributions
> from corporate-linked political action committees (PACs). We leverage these
> to identify how corporate executives adapt their personal campaign
> contribution patterns in response to restrictions applied only to
> corporate-linked PACs but not to executives as individuals. In a newly
> constructed dataset, with 6,803,661 observations, that includes all
> executive-firm-candidate contribution pairs for active S&P500 firms over an
> 18-year period, we find that corporate executives increase personal giving
> to specific candidates in lieu of their corporate-linked PACs in a form of
> cross-actor substitution among corporate-linked sources of campaign
> contributions. This finding has important implications for regulatory
> design in scenarios where cross-actor substitution is possible. Vis-à-vis
> campaign finance regulation, it suggests that bans on corporate-linked PAC
> contributions alone cannot prevent corporate-linked money from finding its
> way into candidates’ campaign coffers.
>
>  [image: Share]<http://www.addtoany.com/share_save#url=http%3A%2F%2Felectionlawblog.org%2F%3Fp%3D49670&title=%E2%80%9CCampaign%20Contributions%20from%20Corporate%20Executives%20in%20Lieu%20of%20Political%20Action%20Committees%E2%80%9D&description=>
>   Posted in campaign finance <http://electionlawblog.org/?cat=10> | Comments
> Off
>
>
> --
> Rick Hasen
> Chancellor's Professor of Law and Political Science
> UC Irvine School of Law
> 401 E. Peltason Dr., Suite 1000
> Irvine, CA 92697-8000949.824.3072 - office949.824.0495 - faxrhasen at law.uci.eduhttp://law.uci.edu/faculty/page1_r_hasen.htmlhttp://electionlawblog.org
>
>
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