Congress and “Corporate-Financed Philanthropy”

How politicians (and companies) do well by doing good

In yesterday’s New York Times, Eric Lipton described how some members of Congress are able to “run something akin to a permanent political campaign,” giving back to their communities through charities that they set up but that local companies and major corporations largely fund. How lawmakers, in other words, manage to do well by doing good (and how that doesn’t look so good).

Per Lipton:

Perhaps nowhere is the mixing of charitable and political agendas more evident than with [Rep. Joe] Baca [D-CA] and his family-run charity [The Joe Baca Foundation]. It is not particularly large, taking in only about $200,000 in contributions this year, according to Joe Baca Jr., the lawmaker’s son. But the list of corporate donors and supporters serves almost like a road map to Mr. Baca’s major legislative actions.

Coca-Cola, which donated $40,000 in the last two years, is preparing to fight a proposal to prohibit the use of food stamps to buy high-calorie sodas, an issue that could be before the agriculture subcommittee that Mr. Baca leads.

Lipton reports that Baca “has achieved near celebrity status in his suburban Los Angeles district, as much for his record of giveaways — Thanksgiving turkeys, college scholarships, spare boots for firefighters — as for anything he has done in Congress,” and describes the PR benefits of Baca’s benevolence (“local newspapers mention the charity’s donations, and cable stations show appearances by Mr. Baca and his family at functions his foundation supports.”)

The Times reviewed federal tax records and House and Senate disclosure reports and found

at least two dozen charities that lawmakers or their families helped create or run that routinely accept donations from businesses seeking to influence them. The sponsors — AT&T, Chevron, General Dynamics, Morgan Stanley, Eli Lilly and dozens of others — contribute millions of dollars annually in gifts ranging from token amounts to a check for $5 million.

(I’m curious about that $5 million check, but -– am I missing something? — I didn’t see anything further in the piece or in the accompanying chart.)

Sen. Richard Lugar’s spokesperson offers this defense of the practice:

“There is nothing improper here at all,” said Mark Hayes, a spokesman for Senator Richard G. Lugar, Republican of Indiana, who helped found two Indiana nonprofit groups that are supported by corporate contributions. “They are simply causes he believes in.”

And then there are “some current and former lawmakers, as well as ethics officials on Capitol Hill” who

find the charitable donations troubling, calling them one of the last major unregulated fronts in the “pay to play” culture in Washington. The donations typically far exceed what companies are permitted to give to candidates in campaign contributions.

So, that’s how “corporate-financed philanthropy” works. And here’s some more detail on how it works (commence head-scratching):

Despite rules imposed in 2007 to curb the influence of special interests in Congress, corporate donations to lawmakers’ charities have continued, thanks to a provision that allows businesses to make unlimited gifts to them…

The Office of Congressional Ethics, a House oversight group, twice last year investigated lawmakers’ charities, but took no action, in part because the House granted waivers exempting the congressmen from prohibitions against soliciting donations from companies with business before their committees.

It is difficult to determine how much corporate money flows into the lawmaker-affiliated charities. They are not required to disclose their donors or the amount of their gifts, and few of them do. After scandals involving Tom DeLay, a Texas Republican and former House majority leader, and the lobbyist Jack Abramoff, Congress adopted rules requiring corporations with lobbyists to report donations to charities established by a lawmaker.

How’s that reporting requirement working out? (Can you scratch your head and smack your forehead at the same time)?

The Times review, however, found at least a dozen companies that appear to have violated the requirements. A spokeswoman said the Senate Office of Public Records was barred from routinely checking lobbyist filings to ensure that they were honoring the rules.

Here’s the Times’s Lipton talking to CNN’s Anderson Cooper last night about his piece:

I think that what it shows is that Washington is really a creative place.

There’s billions of dollars at stake, these corporations have agendas that they want to push, and that they are constantly looking for ways that they can work within the rules to influence members of Congress. And — and they have discovered that one way is to give donations to charities that they have founded, that they care about, and that impresses the members of Congress.

And there seems to be a correlation between those donations to those charities and then — and the — the positions frequently that the members of Congress take.

In addition to the Lipton piece, the Times also yesterday editorialized about money in politics and what it called “the meat and potatoes of Capitol culture:”

Members don’t twitter about it to the folks back home, but the heart of the workday often involves writing laws with one hand, then ducking out of the people’s House to beg for money with the other. It’s not that inconvenient. The smarter special-interest check writers are right in the neighborhood…

Taxpayers may wonder why the existing deep-pocket system came to be licit, why their elected public servants can (must?) routinely behave as crass mendicants.

Make that munificent mendicants.

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Liz Cox Barrett is a writer at CJR.