Sunday, March 27, 2011

Making PACs work for business - political action committees - includes related article

In the mid-1970s, organized labor "owned" the Louisiana Legislature, says Dick Schneider, vice president of political action for the Louisiana Association of Business and Industry (LABI). "Workers' compensation rates were extremely high, unemployment compensation benefits were out of this world," he says, and the whole business climate "was a mess."

In Michigan, the United Auto Workers had a similar strangehold on the legislature in the 1970s and early 1980s, according to Robert LaBrant, vice president for political affairs of the Michigan State Chamber of Commerce.

Today there is a more pro-business atmosphere in both states because business became involved in the political process through political-action committees.

But business's battle for the hearts and minds of state legislators is far from over. Many statehouses are still controlled by lawmakers whose allegiances are to organized labor, teachers' organizations, or trial lawyers--the "Big Three" in state politics, according to many state political experts.

This coming November, voters in 44 states will be going to the polls to elect state lawmakers as well as national and local candidates. Four states--Louisiana, Mississippi, New Jersey, and Virginia--have legislative elections in odd-numbered years. Alabama and Maryland hold their next statewide elections in 1994.

Now is the time for business owners to help pro-business office seekers with those elections, according to Tim Sponsler, director of United for State Action. The organization, based in Washington, D.C., helps from state political-action committees to support pro-business candidates for state elective offices. And that means not only voting but also becoming involved in the political process.

"It has become increasingly clear that political involvement by business on the state level is a necessary management function," says Sponsler. "The people we elect to our state legislatures have a tremendous impact on the way we can conduct business."

Indeed, the battleground for social, economic, and environmental policies has expanded. Over the past 10 years, the fights over such policies have occurred at least as often in statehouses as on Capitol Hill. In 1991, for example, 35 states passed tax-law changes that increased the cost of doing business, according to the National Conference of State Legislatures (NCSL), in Denver.

Many states expect their fiscal difficulties to continue, according to NCSL. This year's legislative sessions could result in more tax increases and such mandates as additional health-care benefits and parental leave for workers.

Despite the increase in state-level legislative activity, business has been slow to recognize the importance of political involvement at that level or has been frustrated by a lack of opportunities to become involved, says Sponsler of United for State Action.

"Historically," says the Michigan chamber's LaBrant, "chambers of commerce [and other business associations] at the state and local level have been reluctant political players."

That changed in recent years with the formation of state political-action committees by state chambers of commerce, industry associations, and independent business groups.

Nearly every state now has a broad-based business political-action committee, Sponsler says, and business now realizes that its lobbying efforts are only as good as its ability to hold lawmakers accountable for their actions.

"Business has always had a legislative agenda," says Maryann Palestino Snyder, director of political affairs for the Indiana Business Political Action Committee, an affiliate of the Indiana Chamber of Commerce. "What we've recognized is that the political activity and the political-action program are really extensions of implementing that legislative agenda."

Still, given a choice, it's likely that most business owners would rather face an Internal Revenue Service audit than deal with politics and politicians, says one political pundit.

With state lawmers increasingly championing legislation that affects business's bottom line, however, business people may not have a choice other than to get involved in politics.

LABI's Vice President Schneider puts it simply: "Get into politics or get out of business."

That was the conclusion reached by Louisiana business people in the mid-1970s, he says. Labor's lock on the legislature prompted business owners--"people who didn't normally talk to each other"--to band together to change the situation through the political process, Schneider explains.

Although it took 14 years, those efforts were successful, as LABI's four PACs helped loosen labor's grip on the statehouse. Business now has nearly 100 "friends"--lawmakers who vote with the business position at least 70 percent of the time--among the state's 144 legislators, according to Schneider.

In session after session at the Michigan state capitol, says LaBrant, business was frustrated by its lack of "the political clout of the UAW and other interest groups." The Michigan State Chamber PAC and a network of more than 50 local chamber PACs were formed in the late 1970s and early 1980s to "change the complexion of the Michigan Legislature," he says.

In 1983, after two state senators were recalled for their support of a huge tax hike--the first successful recal in Michigan history--the chamber PAC network raised more than $20,000 for pro-business candidates for the vacancies. Both won, and for the first time in over a decade, control shifted to pro-business lawmakers in the Michigan Senate.

The Indiana Business PAC has had similar successes in the Indiana General Assembly, according to Ernie Williams, senior vice president of IBPAC. The] Indiana PAC, which was formed in 1985, was "heavily" involved in several state races in 1990, says Williams, and is credited with helping unseat three antibusiness incumbents.

Political successes such as those in Indiana, Michigan, and Louisiana have earned credibility for business among state legislators. After the Michigan chambers' 1983 victories and a special-election win the previous year, LaBrant says, lawmakers "recognized that there was more than just the UAW in Michigan politics. We have not had a major piece of anti-business legislation pass the Michigan Legislature" in the years since.

In addition to giving business political clout, PACs provide vital political information, through vote records and candidate forums, and they serve as conduits between candidates and business people who want to do more than just make a campaign contribution.

"For a business person to decide to become involved in politics, that's a very difficult decision," says Williams. "That's where the business PAC must play a role. It must give the business person many levels of involvement, including working on a campaign. Business PACs need to be more than just organizations that collect money and write [campaign] checks."

Although business has made political inroads at the state level, it has some catching up to do, says Bernadette Budde, vice president for political education of the Business-Industry Political Action Committee, BIPAC, based in Washington, D.C., includes United for State Action, and it focuses on federal elections.

Not only have organized labor, teachers' unions, and trial lawyers been at the state political-action game longer, but they also have been more willing than business to campaign for their candidates, conduct polls, and put big dollars into state-level races, which are becoming more expensive and more sophisticated.

"Labor and the teachers and the trial lawyers have had it over the business community because of their willingness to fund and maintain a [political] structure whether there was something--a legislator or legislation--involved in their livelihood or not; they were always active politically," says Budde.

While business contributes a great deal to state legislative campaigns, until recently it lacked the "unity of purpose" that has characterized organized-labor and teachers' association PACs, says Michigan's LaBrant, an expert on PACs. Many of the first business PACs were "access-oriented," he says, explaining that they supported exclusively incumbents regardless of those incumbents' voting records on business issues.

Other past political mistakes by business have included contributing to both candidates in a race and supporting a candidate in a district in which he or she had no chance of winning, says the Indiana Business PAC's Snyder.

However, it seems that business at the state level has finally taken to heart the words written in August 1971 by Lewis F. Powell Jr.--the Richmond, Va., attorney who would later be named to the U.S. Supreme Court--in The Powell Memorandum, which became a charter for business activism:

"Business must learn the lesson, long ago learned by labor and other self-interest groups. This is the lesson that political power is necessary; that ... it must be used aggressively ... and without the reluctance which has been so characteristic of American business."

COPYRIGHT 1992 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group

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