Corporate political activity has been the subject of federal regulation since 1907, and the restrictions on corporate campaign contributions and other political expenditures continue to increase. Most recently, Congress banned soft money donations in the Bipartisan Campaign Reform Act of 2002 ("BCRA"), a ban upheld by the Supreme Court in McConnell v. FEC. Significantly, although the omnibus BCRA clearly was not directed exclusively at corporations, the Supreme Court began its lengthy opinion in McConnell by referencing and endorsing the efforts of Elihu Root, more than a century ago, to prohibit corporate political contributions. Repeatedly, within the broad context of campaign finance regulation, corporate contributions have been singled out as particularly problematic.
The federal regulatory scheme is based, in part, on the perception that corporations are able to use their substantial economic resources to influence public policy and thus distort the political process. At the same time, political activity is widely viewed as an illegitimate expenditure of corporate funds. Thus, again in the first few lines of the McConnell decision, the Court quoted President Theodore Roosevelt's statement that 'directors should not be permitted to use stockholders' money for political purposes." Similarly, the Court had previously characterized general corporate treasury funds spent on politics as being "diverted" from their proper use, indicating that political activity is not a legitimate business expenditure.
Media reports about corporate corruption of the political process have fed these concerns. The press, for example, described Enron as buying legislative favors in exchange for political contributions. Studies claim that corporate donors use campaign contributions to purchase political influence.' The media often structures these reports of corporate and other special interest political expenditures to produce heightened impact. For example, the Wall Street Journal reported that 80% of the $314 million raised for the 2000 Bush presidential campaign came from "corporations and individuals employed by them."' In contrast, John de Figueiredo and Elizabeth Garrett reported that only 22% of the money contributed to the federal political campaigns in 2000 came from corporations, unions, and other interest groups and that the remaining vast majority came from small donations by individuals.
Despite the widespread reports of corruption, the empirical evidence is inconclusive. Although some studies show a relationship between political contributions and legislative voting records, their findings demonstrate, at best, a correlation between contributions and voting patterns, rather than a causal relationship. Many studies fail to find even a correlation. A recent paper reviewing the results of approximately three dozen such studies reported that "[iln three out of four instances, campaign contributions had no statistically significant effects on legislation or had the 'wrong' sign - suggesting that more contributions lead to less support."
Jill E. Fisch,
How Do Corporations Play Politics?: The FedEx Story,
58 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vlr/vol58/iss5/2