(Note: This is an unedited version of a column written for Sunday’s News Sentinel. Edited version HERE.)
Our staunchly conservative state legislators have decided to be liberal in at least one sense, that being allowing generosity in donation to political campaigns.
Indeed, a review of a National Conference of State Legislatures listing of campaign contribution limits in all 50 states – last updated in 2010 – it appears that not only did the our legislators vote in June to allow themselves to collect direct corporate contribution; they will allow companies to give them bigger contributions than any other state that imposes limits on campaign contributions.
A handful of states – Oregon, Utah and Missouri, for example – still have no limits whatsoever on what any entity can give to candidates for state office. Tennessee first adopted limits on campaign contributions in 1995, a legislative reaction to the state government corruption scandal of the day, known by the FBI code name “Rocky Top.”
Our new law, enacted as SB1915, got most attention for authorizing direct corporate contributions. But it also raised the limits on how much money can be donated to candidates, declaring the old 1995 limits should be adjusted for inflation, retroactively. The result was about a 40 percent increase in contribution limits.
(Registry of Election Finance chart with the new limits compared to old limits HERE.)
The new law also calls for automatic inflation increases in the future, giving Tennessee a head start at remaining at the head of the liberalized donation pack – or PACs – in the years ahead.
For PACs, the new law raised the amount that can be donated to a candidate for state Senate or governor from $7,500 per election to $10,700. Since there are typically two elections for a candidate – the primary and the general – that’s a total of $21,400 per election cycle. For state House candidates, the PAC limit was bumped up from $5,000 to $7,100.
These are higher than federal PAC limits, incidentally.
For individuals, as in real people with a name, the limit is increased from $2,500 for statewide candidates to $3,600 from $2,500; for legislative races, from $1,000 to $1,400. You will note, of course, that PACs can give a lot more than individuals.
Which brings up another interesting point of our new law: Corporations are treated as PACs, not as individuals. That is rather liberal thinking, given that the whole legal proposition of court cases declaring that corporations should be allowed to give to politicians is founded on the proposition that corporations should be treated as individuals, although they are basically a legal fiction.
In virtually all other states that now allow direct corporate contributions to candidates – 25, according to the NCSL listing — – the corporations are limited to the same amount that individuals can donate. In fact, one state that still allows unlimited contributions from individuals and PACs – Alabama – restricts direct corporate contributions to $500 per election or $1,000 per cycle.
Illinois puts a $10,000 cap on direct corporate contributions, making it the apparent runnerup to Tennessee’s $10,700 cap in liberal donation rules. Illinois, incidentally, had unlimited donations until Jan. 1, 2011, when a law passed in the aftermath of a state government corruption scandal took effect.
The authorization of direct corporate contributions with PAC limits has interesting ramifications for thoughtful corporate executives wishing to influence the political process.
Consider that CEO Joe of XYZ Inc. can now donate as an individual and encourage subordinates to do the same – or engage in “bundling” contributions, to use the politico term – and max out on those. XYZ can also have a PAC and max out on the PAC limits.
Now, with the new law, the corporation can also put funds directly into candidate campaigns and be treated as a separate PAC. Further, it can put corporate money into its PAC, if the PAC is shy of maxing out. Lots of giving options for CEO Joe.
And don’t forget that corporations can also conduct “independent expenditure” political efforts, as in paying for TV commercials attacking candidate Smith as a no-account scumbag, so long as the ads are not coordinated with Smith’s opponent, Jones.
State law also allows PACs to contribute to PACs in unlimited amounts. And with corporations treated as PACs, interchange opportunities abound, though there are some complicated nuances involved, notably including the “aggregate” limits candidates can receive from PACs.
The new law allows out-of-state corporations – including those headquartered in a foreign country, provided they have a Tennessee presence – the same donating rights as in-state companies.
“More money is more free speech,” declared Rep. Glen Casada, R-College Grove, in the course of sponsoring the new law into passage. Casada already has substantial experience in promoting free speech, having raised and spent about $320,000 during the 2010 election cycle through his own campaign account and a “leadership PAC” that he operated.
About $40.7 million in contributions was raised and spent by state candidates during the two-year 2010 cycle, an AP analysis shows. The state Legislature operated during the current fiscal year on a budget of $39,384,000, which was reduced by 1 percent under the new Republican majority’s conservative fiscal management for the coming year. The new law assures that the trend is toward more money in getting elected; less in governing.
In other words, people who want to influence who is elected now spend about half as much as taxpayers, as a statewide whole, spend on operating the Legislature. Now a PAC – or a corporation, or both — can contribute $21,400 to the election of a legislator who will get $19,100 in basic state-paid salary. And that’s just for starters.
Thus are liberal legislative priorities established.