As the House of Representatives takes up campaign finance reform, some people may wonder, "What's the big deal?" "Why does this matter to me?"
Let me tell you why campaign finance reform matters and why - as the kids say these days - it matters "big time."
Put simply, the current corrupt campaign finance system means you pay higher taxes.
How? Under the current system, corporations and other powerful special interests are allowed to funnel huge campaign contributions through the political parties to buy access and influence with elected officials in Washington. Politicians get big bucks for their campaigns, corporations get the special breaks they seek and the American people are left holding the bag.
The huge, unlimited, unregulated contributions flooding the political system are called "soft money" and the special tax breaks and other benefits big business receives in return are called "corporate welfare."
The link between soft money and corporate welfare not only guarantees a higher bill for average taxpayers, but in some cases undermines public health, degrades the environment and increases costs to consumers.
Not surprisingly, corporate welfare often - too often - goes to the companies that are among the biggest political contributors and especially those that have contributed millions in soft money. Here are six examples.:
* Logging Boondoggle: The U.S. Forest Service purchaser road credit program since 1991 has given the timber industry a $458 million subsidy to build logging roads in national forests. When I explain in speeches around the country that the American people subsidize industry to cut down trees in our national forests, many in the audience stare back in stark disbelief.
In 1997, the Clinton budget targeted the logging subsidy for elimination. Fiscal conservatives dubbed the subsidy corporate welfare and "food stamps for the timber industry." Environmentalists charged that the vast network of existing forest roads - more than twice the size of the national highway system - causes erosion, increases flooding and destroys wildlife and fish habitats.
But timber interest lobbyists roamed Capitol Hill lobbying for the program - backed up by more than $8 million in political contributions since 1991, including $2.7 million in unregulated soft money contributions.
The result: Congress not only saved - but expanded - the timber industry's logging subsidy - a subsidy paid for by the American taxpayer.
* Subsidizing ADM: Archer Daniels Midland (ADM), its subsidiaries and the family of ADM Chairman Dwayne Andreas have given more than $3 million in soft money contributions to the national political parties since 1988 - more than $2 million to Republicans and more than $1.1 million to Democrats - to protect the huge government subsidy for a corn-based fuel additive called ethanol. ADM is the nation's largest producer of ethanol.
By giving huge contributions to Democrats and Republicans, ADM makes clear that these contributions are not about ideology, beliefs or who wins the election. ADM contributions are given to guarantee that no matter who wins, ADM will have a place at the table - and access and influence in Washington.
ADM's double giving has paid off. In 1995, the conservative Cato Institute described ADM as "the most prominent recipient of corporate welfare in recent U.S. history. I At least 43 percent of ADM's annual profits [are] from products heavily subsidized or protected by the American government."
Even after pleading guilty to price-fixing and in 1996 paying the largest-ever government fine in a federal anti-trust case, ADM continues to benefit from corporate welfare.
Even after studies showed that ethanol does little to reduce pollution or to reduce our reliance on foreign oil, ADM continues to benefit from corporate welfare.
The large transportation spending bill passed by Congress in May extends the tax credit for ethanol through 2007. That tax subsidy, according to the General Accounting Office, has cost more than $7 billion since 1979 - and taxpayers are footing the bill.
* Special Deal for Amway: Buried in last year's budget and tax deal is a lucrative lobby victory for Amway Corp. Since 1991, Amway its corporate officers and affiliated donors have given more than $4 million in soft money - all to Republicans - including the largest single contribution ever, of $2.5 million. When Amway lobbies, Congress listens. That's why Amway was able to secure an obscure foreign investment provision that primarily benefits Amway and its shareholders and promises to be worth millions of dollars - millions of dollars at the expense of American taxpayers.
* Big Breaks for Big Business: A phalanx of some of the nation's largest, most profitable corporations last year succeeded in persuading Congress to greatly relax the minimum tax rules for corporations. The alternative minimum tax was enacted as part of the 1986 tax reform package to end an outrageous tax dodge under which many profitable corporations were allowed to pay no taxes whatsoever.
Ever since the minimum tax was passed, big corporations, including oil, steel and chemical manufacturers, have been pushing hard to eliminate or at least weaken it. Those companies joined together in a powerful coalition that gave more than $22.1 million in soft money donations to the political parties from 1991 to June 1997. The result: Congress voted in the 1997 budget and tax deal to severely weaken the minimum tax requirement, an action that will save affected companies - and cost taxpayers - about $18 billion in federal tax revenues over 10 years.
* Broadcaster Giveaway: Perhaps the Godzilla of corporate welfare was the giveaway recently engineered by the nation's broadcasters. Broadcasters who had contributed nearly $5 million in soft money contributions from 1991 to June 1997, got a magnificent gift from Uncle Sam in 1997, a gift paid for by average citizens. The broadcasters received free digital TV licenses worth as much as $70 billion if they had been sold on the open market, according to estimates from the Federal Communications Commission. That gift came courtesy of Congress, which refused to auction the licenses and gave them to broadcasters free, even though broadcasting is one of the most profitable industries in our country today.
The giveaway was roundly criticized. Business Week assailed the deal, calling it a "freebie" that was "ludicrous." But the political clout of the National Association of Broadcasters was more than enough to offset the criticism.
A $70 billion broadcaster giveaway - just one of the many examples of corporate welfare - translates to nearly $700 for each U.S. family. Put another way, $70 billion is enough to construct more than 10,000 new elementary schools and to renovate each of our 368 national parks until the year 2018.
* Tobacco Clout: And if anyone ever has doubts about whether corporations are using their big money contributions to directly affect voters on Capitol Hill, just look at the influence of the tobacco lobby. Even before its recent defeat of tobacco regulation in the Senate, the industry in the dead of night sneaked a $50 billion windfall for tobacco companies into the 1997 tax and budget deal. When the $50 billion tax amendment became public, a furor erupted. No member of Congress would publicly claim any ownership for tobacco's windfall but a surprisingly candid staff member admitted that the amendment had come straight from the industry. "The industry wrote it and submitted it, and we just used their language," the staff director of the Joint Committee on Taxation told a reporter.
Between 1987 and 1997, tobacco interests gave nearly $30 million in political contributions, including more than $15.9 million in soft money donations.
Let's face it. Dislodging corporate welfare is not likely to happen as long as big money calls the shots in Washington. Special interests that benefit from the status quo use the one-two punch of well-financed lobbying operations and big campaign contributions to win special benefits on Capitol Hill and at the White House.
As long as unlimited, unregulated soft money contributions are allowed, too many elected officials will be only too happy to oblige these special interests whenever they can. As long as soft money contributions are allowed, big money will continue to drown out the voice of the average citizen, diminishing our democracy.
Congress has a chance to make a difference this year - to strike the first blow against corporate welfare by starting to curb the campaign money race. The Shays-Meehan campaign finance reform bill now before the House would ban soft money - pulling vTC the plug on unlimited contributions from corporations and other powerful special interests that are influencing vital decisions in our nation's capital every day.
Congress must pass the Shays-Meehan bill banning soft money - the biggest special interest pipeline to Congress and the White House - as the essential first step in beginning to end the corporate welfare system in Washington.
Ann McBride is the president of Common Cause.
Pub Date: 7/19/98