Wednesday, August 18, 2010

One Corporation, More Than One Vote

Last month Best Buy and Target were in the news for giving six figure contributions to a conservative group that then gave the money to an Attila the Hun leaning Republican candidate for the Minnesota governorship.

This morning the New York Times reported that News Corporation gave $1 million to the Republican Governors Association for it to distribute in 37 governor races this fall. A News Corporation spokesman said “News Corp. has always believed in the power of free markets, and organizations like the R.G.A., which have a pro-business agenda, support our priorities at this most critical time for our economy…. [T]he company’s corporate side made the donation with no involvement by its news operation and that the gift would not have any impact on newsgathering operations. There is a strict wall between business and editorial.” The Michigan Chamber of Commerce gave the Association $1.48 million and a vice president of Koch Industries gave them another $1 million.

The explanation that the News Corp. contribution was triggered by “business” concerns mirrors statements by Target and Best Buy.

Google got flack for its retreat from net neutrality principles over the last couple of weeks. (Everyone already knew that Verizon is evil, so it got a pass.)

And these are just the biggest guys and splashiest actions. There’s a lot more corporate involvement in politics that is under the radar.

Calvin Coolidge famously said that what is good for General Motors is good for America. We had better hope he was right.

Corporations, whether they spread the wealth to influence elections and the resulting winners when in office, as News Corp, Target and Best Buy have done, or try to influence legislation as Google and Verizon are doing, do not have a “public benefit” motivation. Indeed, their executives would be violating their fiduciary duty to the corporation and its shareholders if they spent money or promoted legislation that would harm the corporation.

The legality of corporate participation is pretty much a settled question – they can play politics to their amoral hearts’ content.

Remember back when you were say 8 or 9 and you whined your way into the big kids’ pick-up baseball game? Remember getting whipped? That’s the feeling you’re going to be having going forward in the political arena. Corporations are bigger, faster, more practiced and talented at politics than any combination of voters can be. They are going to win the game. My hope, going back to Calvin Coolidge, is that their win trickles down, though I’m not optimistic.


The Curmudgeon said...

I hope for better on this. Not because I have any great love for corporate America but because shareholders and customers have some pretty good tools for moderating what they consider unacceptable political behavior. The recent experience of Target comes to mind: Whatever the political beliefs of the suits in charge, the corporation can not afford to offend customers with discretionary income.

Dave said...

Maybe Curmudgeon; but, consumer and voter interest is transitory. Companies and politicians know that. They wait it out till the outrage is pointed in another direction, then resume whatever it was they were doing.

fermicat said...

Was it any real surprise that News Corporation revealed their true colors? It has been obvious for a long time.

I'm not crazy about unfettered corporate contributions being OK, but as long as they are public then all is not lost. They still have to answer to their customers.

Dave said...

I'm still not at all thrilled with corporate participation in politics; but, public giving, with the consequences may be a saving grace.