Chapter 19: Business Participation in Politics

The extensive impacts of government on business dicision making have results in expanded interest by business executives in participating directily in the political process. Industry leaders usually attempt to use the political process to slow or shape government intervention in the provate sector. Legislation enacted in the 1970s to prevent illegal political contributions by business has been an important factor in changing the nature of business participation in politics.
Corporations can participate legally in a wide cariety of political activities. Federal law governs only political activities involving candidates for president, vice president, and congress. Soft money payments made directly to a political party were exempt from the federal limits on the size of indvidual contributions because ostensibly the money was not going into the campaign of a specific candidate. Many business political donations have the effect of maintaining access to currect policy makers rather than attempting to change the actual composition of government decision-making bodies. Traditionally, Republican candidates have been supported more generously than Democrats.
Despite the attention given to PACs, congressional condidates usually raise most of their money from individual citizens. Businesses can legally make indirect contributions to political parties. Presidential election campaigns are financed primarily by the $3 checkoff on the feeral indvidual income tax return. The greater the importance of government to a firm's operations, the greater the likely scope and magnitude of its involvement in political acticity. The 2002 federal election reforms are expected to enhance the role of state and local political parties because they are not covered by the restrictions that now apply to national political parties. The largest donations to the state Democratic Party come from labor unions and trial lawyers. The major Republican contributions are real estate and securities firms and health professionals.
Business executives, as well as the public, might bear in mind Peter Druchker's thoughts on the subject of business in politics: "if I were to have a criticism of the American Businessman, it is that he has made no attempt to understand the political process. He attempts to influence it without understanding it." Some business organizations attempt to meet Drucher's chanllege.


Source: Business and Government in the global marketplace (7 edition Murray L. Weidenbaum)