Money Matters: Political Action Committees and the Legislative Process
© AAIA 2001. Aftermarket Insider, Vol. 12.
By Larry Northup
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Money and Politics
It has been said that money is the mother’s milk of politics. If so, the baby is hungrier than ever. During the 2000 election season numerous campaign spending records were eclipsed. “The most expensive race in history,” was a frequent refrain. Various Senate and House races, as well as the presidential campaign, witnessed sizeable increases in the amount of money spent by candidates. Overall, federal election campaigns in 2000 spent about $3.2 billion compared to $2.4 billion just four years earlier. No one was immune, and the trend shows no sign of abating. Welcome to the mega-buck age of sophisticated political marketing and expensive media exposure. If a candidate is serious about getting elected he or she must be equally serious about raising sufficient money to support the campaign. |
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A single $50 contribution has little impact on a campaign, but when combined with hundreds of other $50 contributions it’s an entirely different matter.
PACs: The Money Source of Choice
Raising money the old fashioned way — sending letters, knocking on doors, holding fundraisers — is still by far the most productive way to generate campaign dollars. But, soliciting these individual donations can be costly and difficult. Increasingly, politicians are relying on organizations or interest groups to do the grunt work of grassroots fundraising. Individual collections are aggregated and passed along to candidates in the form of campaign contributions, so-called “hard money.” The most common vehicle for this type of activity is the political action committee (PAC).
A PAC is nothing more than an organization specifically created to allow individuals with shared interests to pool their political contributions and thus increase their visibility and clout. A single $50 contribution has little impact on a campaign, but when combined with hundreds of other $50 contributions it’s an entirely different matter. Only certain individuals — “the restricted class” — may contribute to PACs and all but the smallest contributions must be reported to the Federal Election Commission (FEC). AAIA has a political action committee, the Automotive Aftermarket Political Action Committee (AAPAC).
Protecting Free Speech
The courts have repeatedly affirmed that political giving is a clear expression of free speech and as such is guaranteed by the First Amendment to the U.S. Constitution. As a result, thousands of PACS have been created to give voice to a variety of like-minded individuals. Many would be considered mainstream, e.g. environmentalists, trade associations and corporations. Other PACs are intended to promote the interest of such diverse constituencies as extraterrestrial beings, pagans, “polyamorists” and the Unabomber. Just about any conceivable cause or issue has a PAC associated with it. In fact, a quick search of the Internet revealed 959,000 sites that in some way mentioned “political action committee.”
The Aftermarket’s Challenge
The automotive industry is well represented in the national PAC arena. Unfortunately, it is the aftermarket’s rivals who can lay claim to the biggest and most powerful PACs on Capitol Hill. For example, the Big Three automakers spent over $1.2 million during the 2000 campaign season. The National Automobile Dealers Association contributed over $2.5 million during the same period, with several dealerships topping $100,000 in PAC and individual contributions. The $1.5 million in contributions donated by the National Rifle Association, widely considered to be one of the most powerful lobbying organizations, were dwarfed by NADA.
By comparison, AAIA and eight corporate aftermarket PACs contributed a total of $148,000 during the last campaign cycle, or less than four percent of the combined car company/dealer total.
Does Money Really Matter?
Still the question must be asked, how relevant is political giving when compared to industry size and clout? After all, the aftermarket is a $250 billion industry with more than 1.5 million employees and countless millions that we touch every day.
The answer was made clear during dozens of meetings with Congress at the Legislative Summit in May. A large number of industry representatives reported hearing concern from congressmen and their staffs that car dealers and manufacturers “will be upset” by the implications of our Right to Repair Act. Other congressmen noted that product liability relief would be “a tall order” due to opposition by the Association of Trial Lawyers of America. Translation: we’re not likely to walk away from thousands of dollars in campaign contributions unless the aftermarket can fill the void.
With this in mind, AAPAC has committed to increasing member awareness of the PAC and ultimately, their individual contributions. It’s a long-term proposition, but the stakes are high and the need is real.
PACs Are Just the Beginning
Despite the obvious advantages of a well-funded PAC, total reliance on campaign contributions can be a mistake for those who wish to influence political behavior. A recent case in point is provided by the auto manufacturers and their opposition to increased mileage (CAFE) standards. Despite liberal use of their vast PAC war chest, the car companies have not yet halted the momentum for increases in CAFE. One reason could be the lack of a broader-based approach to advocacy. To be successful in the legislative arena, the business community needs to educate our elected representatives on the issues and why our position is the correct one from a public policy perspective.
The most effective PACs are those that are used in conjunction with a program of mutually supporting grassroots activities.
Compare this to trade unions’ effectiveness in electing sympathetic candidates during the last election. Certainly, their immense PAC coffers were tapped. However, it was the unions’ intensive grassroots education and get-out-the-vote efforts that really tipped the scale.
In the end, while money pays for campaigns, it’s votes that get people elected. Without the promise of votes, few candidates will stick their necks out, PAC donations notwithstanding. As a result, the most effective PACs are those that are used in conjunction with a program of mutually supporting grassroots activities. These could include frequent personal contact with elected leaders; public endorsements of candidates’ positions; demonstrations of grassroots power through mail/phone campaigns, and political education by employers. All of these efforts are then amplified through the use of a well-funded PAC. The American Medical Association, National Education Association, Microsoft and TRW are considered to be among the most effective at integrating their PACs and other grassroots activities.
Still Alive and Well
Despite negative publicity, complex regulatory requirements and pressure from the campaign finance reform movement, PACs are very much alive and well in Washington D.C. They continue to provide a critical boost to hundreds of political campaigns and perhaps most importantly they offer hundreds of thousands of citizens a simple and effective way to get directly involved in the political process.
The Automotive Aftermarket Political Action Committee (AAPAC)
AAPAC provides qualified AAIA members (the "restricted class") with an easy, powerful tool to make their voices heard above the clamor on Capitol Hill. By combining the individual donations of many dedicated members, AAPAC helps:
- Position the automotive aftermarket as a serious player in Washington's political scene.
- Open doors to congressional offices so that AAIA's highly respected government affairs department can educate legislators about the aftermarket's needs.
- Elect congressional candidates who are committed to a free and competitive aftermarket and defeat those who believe otherwise.
Every penny of every AAPAC donation is used to support the election of U.S. senators and representatives who share the industry's goals of consumer choice, free trade and reasonable regulation. Contributions are made to the election campaigns of strategically important candidates, both incumbents and challengers, Democrats and Republicans. AAPAC's single, overrideing consideration is the strength of a candidate's commitment to the automotive aftermarket.
For more information on how to contribute to AAPAC, contact Larry Northup at larry.northup@aftermarket.org or by phone at 301-654-6664.
What is a “Restricted Class?”
According to the Federal Elections Commission, national, association-sponsored PACs must limit their solicitations to a distinct group of individuals, the so-called “restricted class”. These individuals can contribute up to $5,000 in personal funds annually to the PAC, but must first meet all of the following criteria:
- Must be U.S. citizens.
- Must be executives, administrative personnel or stockholders of association member companies.
- Their company must have given the PAC permission, or approval, to solicit its key employees.
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As former U.S. Senator Sam Ervin once said, “If men and women of capacity refuse to take part in politics and government, they condemn themselves, as well as the people, to the punishment of living under bad government.” The ideal way to influence politics is a combination of PACs and grassroots support of legislation, a major strength of the aftermarket.