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Big Business's Funding Shift Boosts GOP

Major industries such as accounting, aerospace, commercial banking, defense, HMOs and pharmaceuticals have abandoned their tradition of bipartisan campaign contributions in favor of a commitment to the GOP, a trend that could deepen the problems of a Democratic Party rocked by this month's elections.
An analysis of political donations by industry groups shows that over the past decade, 19 major sectors have shifted from a roughly 50-50 split between the two main parties -- or in some cases, a slightly pro-Democratic tilt -- to a solid alignment with the Republican Party, which now enjoys advantages exceeding 5 to 1 in some of these sectors. The shift has produced at least $78 million in additional GOP support from these groups over 10 years, while donations to Democrats have declined slightly.





The realignment is no accident. Republican leaders for years have been pressing corporate and trade groups to hire more GOP lobbyists and to support more GOP candidates. They have emphasized the Republican issues that favor the corporate world, such as regulatory relief, business tax cuts and liability limits in civil cases (sometimes called tort reform).





Their success could have far-reaching implications for U.S. politics and elections. Democrats increasingly find themselves frozen out by deep-pocket industries and political action committees, making them more dependent than ever on a relatively small number of sources: organized labor, trial lawyers, the entertainment industry, environmentalists, educators and the high-tech industry. A recent change in campaign finance laws will exacerbate the Democrats' problems, denying them the big checks they once received from loyalists in Hollywood and elsewhere, while Republicans use their corporate ties to collect hundreds of thousands of smaller checks from management employees and association members who now play a huge role in federal elections.





The strategy isn't risk-free for Republicans, however. The trend could make them more susceptible than ever to criticisms that they are too tightly linked to corporate interests. But for now, at least, Republican leaders are forging ahead with their campaign to pry corporate support from Democrats.





Now that Republicans will again control both chambers of Congress and the White House, these leaders haven't been shy about reminding industry executives and their lobbyists that Republicans will decide which bills and nominees pass or fail.





Some Republican activists are determined to isolate Democrats as much as possible in terms of political fundraising and influence on K Street, Washington's main corridor for lobbying firms and interest groups.





"Just like the Democrats get a 90-10 split from the trial lawyers and labor, we will have 90-10 [in the staffing] on K Street and 90-10 business giving," claimed an elated Grover Norquist, president of Americans for Tax Reform and a leading architect of the drive to get Republicans into key lobbying posts.





Maria Cardona, spokeswoman for Democratic National Committee, said trends benefiting the GOP are the result of pressure applied to trade groups by Republican leaders such as Rep. Tom DeLay (R-Tex.), the House majority whip and soon-to-be majority leader.





"Tom DeLay and his cronies have been threatening these guys for years," Cardona said. "A lot of these groups would like to give more to the Democrats, but DeLay and the Republicans have put them in quite an impossible position, basically threatening them not to give to the Democrats or they are not going to consider their legislation."





There can be benefits, however, for lobbyists and interest groups aligned with the majority party. GOP lawmakers sometimes have allowed favored lobbyists a role in writing legislation and helping win its enactment. DeLay has maintained what amounts to a kitchen cabinet of advisers made up largely of lobbyists from major industries and associations, assigning members to the successful anti-regulatory drive under the title Project Relief, and using K Street alliances to push legislation to kill ergonomics regulations approved by the Clinton administration.





"Perception does become reality, and the perception is that he [DeLay] is the 'Dirty Harry' of Capitol Hill, the bad cop," said Marshall Wittmann, former Christian Coalition staffer and now communications director for Sen. John McCain (R-Ariz.). "Every K Street lobbyist is shaking in their boots because K Street lives on access, and DeLay can shut off their oxygen."





Robert A. Rusbuldt, chief executive of the Independent Insurance Agents of America, said his industry has moved toward the GOP in part because of the party's growing power, but also in response to strong appeals from Republican congressional leaders. DeLay, he said, "put his cards right on the table [and said] 'Why are we doing many of the things that are in the best interests of the business sector, and they are not giving us the same kind of support' " that labor and trial lawyers give the Democrats. "The business community responded."





As long as the Republicans control Congress and the White House, interest groups' pro-GOP tilt can prove mutually beneficial. Senate Republicans now will be poised to push the pro-business agenda that their House colleagues have pursued in recent years, including limiting punitive damages and other court-ordered awards in civil cases; cutting taxes that affect corporations; and easing government regulations on a variety of private enterprises.





These issues, meanwhile, tend to drive Democrats more deeply into the arms of groups that many business leaders see as enemies: labor unions, trial lawyers and environmental activists.





Bruce Gates, a Republican lobbyist at Ernst & Young, says divisions between Democrats and Republicans on key business issues have become so sharp that many businesses will remain firmly in the GOP camp even if Republicans later lose control of Congress.





The conversion of much of K Street has produced critical support for GOP candidates and the party's senatorial, congressional and national committees. This support will become all the more important in the 2004 elections.





The new McCain-Feingold campaign finance law prohibits national parties from raising "soft money," large donations from corporations, unions and individuals. That makes "hard money" donations, typically $2,000 or less, especially vital. The Washington-based lobbies and trade associations, along with their extensive membership and client lists, are among the most important and productive sources of such donations.





The significance of the K Street shift can be seen in comparisons of the total giving by 19 industry sectors in 1992 and in 2002, based on data compiled by the Center for Responsive Politics. These sectors include beer, wine and liquor distributors, defense contractors, commercial bankers, health professionals and others.





Ten years ago, these groups gave nearly as much money to Democrats and Democratic Party committees as they did to the Republican counterparts: about $128 million to $135 million.





In 2002, with the end-of-the-cycle reports still to be filed, the flow of cash to Democrats has fallen slightly to $121 million, while contributions to Republicans have ballooned to nearly $213 million. In other words, a modest $7 million GOP edge 10 years ago has grown to a $98 million advantage this year.





The shift is especially striking in some cases. In 1992, accounting companies gave most of their political donations to the Democratic Party and to Democratic candidates: $3.4 million, or 54 percent of their total. By 2002, the Democratic share fell to 27 percent, or $2.1 million, while backing for the GOP grew from $2.9 million to $5.7 million over the same period.





Similarly, in 1992, the pharmaceutical industry split its contributions almost evenly: $2.5 million for Republican campaigns, $2.3 million for Democrats. In the current election cycle, the industry tilted to the GOP by 3 to 1: $10.8 million to $3.4 million.





In addition to the shift toward the GOP in these 19 industrial sectors, there are industries that were committed to the Republican Party a decade ago and remain so. These longer-term allies include auto manufacturers and dealers, the construction and homebuilding industry, agribusiness, chemical producers and lumber.





For Democrats, crucial sources of contributions remain lawyers, especially trial lawyers, and organized labor. From 1992 to 2002, the legal community has favored the Democratic Party and its candidates with 70-plus percent of its contributions. Heavy givers in presidential election years, lawyers contributed nearly $80 million to Democrats and $34 million to Republicans in 2000.





Organized labor, in turn, has consistently favored Democrats by ratios exceeding 9 to 1 over the years. In 2002, labor gave $54 million to Democrats and less than $5 million to Republicans.
 
 

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