Vanderbilt Law Review

Article Title

How Do Corporations Play Politics?: The FedEx Story


Jill E. Fisch


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.