How much influence do corporations really have?

Whether it's what the founding fathers envisioned or not, corporations are a dominant source of political funding today. They have deep pockets and face few checks and balances, which means they have great influence. Without the public's or even their own shareholders' knowledge, corporations are in a unique and powerful position to set federal and state political and policy agendas.

Aren't there prohibitions and restrictions in place to prevent this?

Yes, and there have been many efforts over the past century to enforce them. Corporations are prohibited from tapping their treasuries for direct contributions to federal candidates and national political parties. They may, however, engage in what's known as electioneering spending. This includes funding advertising that supports or opposes a specific candidate as long as it’s independent from that candidate's or party's committees.

Companies may also give to political committees known as 527 groups, such as the Republican and Democratic Governors Associations, state legislative campaign committees and attorneys general associations. These groups focus on elections and may engage in independent spending, but they must disclose their donors.

Corporations may also give to Super PACs, which can accept unlimited contributions and make unlimited independent expenditures. Direct contributions to a Super PAC must be disclosed, but indirect contributions may remain secret.

What are the rules at the state level?

States have a patchwork of laws dictating when companies may contribute to state campaigns and, if permitted, whether there are contribution limits or disclosure requirements. Click here to see which states allow corporate contributions to candidates, state campaign finance disclosure requirements, and state independent expenditure disclosure requirements.

What’s "dark money," and why is it a serious problem?

"Dark money" refers to contributions that can be made without disclosure. Companies may give unlimited sums to trade associations (organized under section 501(c)(6) of the Internal Revenue Code) and “social welfare” organizations (organized under section 501(c)(4)). These tax-exempt groups must have a “primary purpose” other than influencing elections. Unlike most political committees regulated by federal election law, they don’t have to disclose their donors. Accordingly, corporate donors that wish to remain anonymous in their giving may find these organizations appealing. The dark money they contribute can be spent by the organization to influence elections and promote special interests.

The impact of dark money is evident on such issues as climate change, taxation, redistricting, income inequality and LGBT rights. “Such organizations have spent hundreds of millions of dollars on campaign activities in recent elections while declining to disclose their donors,” Ken Doyle of BNA’s Money and Politics Report has reported.

Donors to dark money groups are promised anonymity. The rub: anonymity can’t be guaranteed, and inadvertent disclosure may bring embarrassment or worse.

The bottom line: Dark money not only undermines our democracy, but also poses serious legal, reputation, and business risks to companies.

How Does Your Company Rank?

Find Out »

What Does Your Company Spend?

Find Out »