Activists twist Watergate to stigmatize corporate speech

What does the Watergate scandal have to do with Citizens United and corporate contributions to super PACs and nonprofit organizations? About the former, very little; the latter, even less.

Bruce Freed and Karl Sandstrom of the Center for Political Accountability (CPA) write in The Hill that “companies and their directors face threats from spending political money similar to those connected to the Watergate complex break-in.” Noting that “12 corporations and 17 corporate executives ultimately were indicted or pleaded guilty in the Watergate scandal, mainly to charges of making illegal campaign contributions,” they conclude that companies engaging in lawful political activity today “face a serious risk.” Their stated concerns, however, fall far short of the corrupt acts and criminal convictions involved in the Watergate scandals, and suggest that what CPA and these two former Democratic Hill staffers really want is for corporate America to shut up.

{mosads}In Watergate, President Nixon’s re-election campaign solicited cash contributions from corporations in exchange for favors from the President. In one case, Associated Milk Producers, Inc. pledged $2 million in support of Nixon, and the next morning received a meeting with the President at the White House, after which Nixon increased the federal subsidy for milk. 

One can hardly imagine a more textbook case of quid pro quo corruption. Notably, those corporate contributions to the Nixon campaign were illegal then, and still are today.

Yet somehow, from these illegal acts of 45 years ago, the authors warn that companies that engage in perfectly legal spending today risk “a catastrophic replay” of Watergate. Their argument that corporations face risks similar to Watergate if they participate in public discussion and political campaigns, however, is undermined by the very examples they use in an attempt to substantiate it. Here are the four examples they mention – decide for yourself if they sound anything like the illegal activity in Watergate:

• The utility company NextEra has, they allege, “faced sharp questions” (they do not say from whom) about its legal, public contributions to Right to Rise, a super PAC that supported Jeb Bush’s candidacy.
• A recent article by campaign finance lawyer Paul Jossey (Jossey is an Adjunct Fellow at the Center for Competitive Politics, though that article was not written in conjunction with the Center) notes that some “scam” super PACs aim “to enrich themselves and their vendors” rather than win elections, a point that has nothing whatsoever to do with corporations.
• At least 45 corporations contributed to the Republican State Leadership Committee, which in turn supported Republican candidates for office in North Carolina, some of whom have since enacted policies that some people criticize. Freed and Sandstrom suggest that these corporations could face public criticism (they do not say from whom—from themselves?) over the actions of the Republican-controlled North Carolina General Assembly.
• Lastly, allegations concerning contributions by Arizona Public Service (APS), the details of which are not clear, have triggered an FBI investigation that has caused some negative media coverage of APS. If it turns out that APS broke the law, its misconduct may well resemble the actions in Watergate, but that provides little cause for worry among companies whose contributions are legal.

It should go without saying that legal contributions to super PACs or nonprofits to publicize support for candidates or issues are not in the same arena as illegal contributions to candidates given in exchange for explicit favors.

Reputational risks should be considered in every decision companies make, from marketing their products to contributing to nonprofits. Politics is not unique in this respect. Companies may offend certain customers or shareholders by contributing to art museums that put up controversial displays, or theaters that perform controversial plays. Such offending content may even be political in nature.

In most cases, however, companies decide the benefits of being engaged in the community outweigh the risks. They understand that reasonable people will not hold them responsible for every action from every group that indirectly receives a penny from them. Indeed, polling has found that huge majorities believe it is appropriate for companies to engage in politics when their businesses are affected.

“We don’t advocate stifling legitimate political giving by public corporations,” write Freed and Sandstrom, but their entire article, equating the risk of lawful political participation to the illegal activity and prison terms associated with Watergate, belies that claim. By conflating legal contributions to super PACs, trade associations, and nonprofit groups with the illegal contributions made in Watergate, Freed and Sandstrom attempt to tarnish legitimate corporate political activity as corrupt or unseemly. On the contrary, being engaged is good for democracy, and the business community should speak out on matters of concern to their business, shareholders, and the public.

Bradley A. Smith is a former chairman of the Federal Election Commission and the chairman of the Center for Competitive Politics. Luke Wachob is the McWethy fellow and policy analyst at the Center for Competitive Politics.

The views expressed by authors are their own and not the views of The Hill.