Why Make Campaign Contributions?

In the video below, Linda McMahon, the WWE CEO who is running for the Republican nomination for Senate in Connecticut, offers a remarkably candid explanation for her history of political contributions to Democrats:

In the video, McMahon explains that she donated to Democrats not because she supported their political agenda, but because she wanted to promote the interests of her business. Most people are uncomfortable with the idea of candidates accepting donations made out of pure self-interest, because we tend to want campaign contributions to be premised on genuine support for a politician and/or his or her political positions. This also gets at the heart of the problem with the recent Supreme Court decision opening up elections to unlimited amounts of corporate money.

Corporations can never take political action premised on genuine support for a politician’s ideas or values. Corporate spending on elections must be predicated on corporate self-interest, because corporations are legally required to maximize profit for their shareholders. They will never be able to participate in elections in a “politically motivated” way. They can only participate in service of their own bottom lines. If a corporation acted against its own interests because their management thought it would serve the greater good (for example, by bankrolling an ad campaign supporting a clean-air law that would cripple the company) that would be literally illegal. 

Robert Reich, President Bill Clinton’s Secretary of Labor, writes often about the problem of seeing corporations as citizens who should participate in the political process. He spoke about it in a 2007 interview with Prosper magazine:

You write that corporate income tax should be abolished because taxation entails representation. What is the danger of viewing a corporation as a citizen?

Corporations are not citizens. Only people are citizens. Corporations are pieces of paper. They are contractual agreements. The anthropomorphic fallacy that corporations are people has led to some bizarre public policies. For example, federal prosecutors occasionally indict corporations for criminal behavior. Witness Arthur Andersen, the accounting firm that allegedly helped Enron. A criminal indictment was issued against Arthur Andersen. The result was that a lot of Andersen’s senior partners got new jobs as the firm disappeared, but many of the lower-level employees who were completely innocent lost their jobs and bore most of the burden.

Nevertheless, it seems to be an increasing trend to view corporations as citizens; it’s even a term, “the corporate citizen.”  When did it first strike you that corporations were being viewed more as individuals?

Well, under the law, corporations have been viewed as people or citizens for many years. That’s bad enough, but over the past 10 years or so, with increasing vehemence, public policy and public discussion have assumed the reality of corporate citizenship. It is a distraction from the harder work of devising laws and rules that should determine what corporations do for the public, in addition to maximizing shareholder returns and offering good deals. For example, if we want to combat global warming, it’s silly to expect that corporations on their own volition will sacrifice shareholder returns or good deals for the sake of becoming more “green.” They will become greener only to the extent it helps the bottom line through positive public relations or because it helps the company get ready for what it may believe to be legislation coming down the pike requiring it to reduce CO2 emissions.

I added the emphasis. The rest of the interview is here.


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