Uncontrolled and untrackable corporate campaign contributions distort state-level races as much, if not more, than federal races.
U.S. companies have found a loophole in state campaign-finance rules by funneling donations aimed at helping candidates through the [Republican Governors Association, or RGA, a Republican fundraising PAC] and its Democratic counterpart, according to multiple former officials. Donors can’t earmark money for a particular candidate. Instead, they can simply—and legally—tell the groups they have “an interest” in a race or are making a donation “at the request” of a gubernatorial candidate, these officials say.
An internal tracking system, sometimes called the “tally,” allows the [Democratic Governors Association, DGA] to keep tabs on how much individual governors raise for the association from companies and other donors, which later helps it figure out how to allocate the money, former DGA officials said. The RGA has a similar system, former RGA officials say.
Multiple former RGA and DGA officials described the practice of guiding donations as an open secret. The available public data hint at a pattern, too. Over the past decade, 42 S&P 500 index companies gave donations of $100,000 or more to the RGA or DGA. Donations by 19 of those companies were followed by an RGA or DGA expenditure of the same or greater amount within a month in a state where the company has operations, according to data from the Center for Responsive Politics, a nonpartisan organization that tracks campaign donations.
Source: WSJ 12/30/17.