Money & Politics | Daily Report

California Republican and Democratic leaders were at odds last week about who would benefit most from last week’s landmark Supreme Court ruling, which for the first time allows corporations and unions to directly fund attack ads to support political candidates.

Democrats and many political observers argued that the Republicans would have a leg up. Democrats draw much of their support from organized labor, law firms and ideological groups, which in theory have less to spend than large corporations. Some Republicans, however, disputed that notion last week, arguing that corporations tend to side with the party in power.

So who’s right?

Although we can’t predict how corporations and unions will behave given this new set of rules, we can say a few things about how they behaved under the old ones.

The players

The Democrats have a point when they say that big business typically stands with Republicans. Take a look at the five largest organizational contributors to the California Republican and Democratic parties during the last major election year in 2008, according to the National Institute of Money in State Politics.

We’re looking at corporations, interest groups and their PACs because their campaign spending is decided at an organizational level, rather than an individual one – much like the contributions now allowed by the Supreme Court.

California Democratic Party, 2008

California Republican Party, 2008

No shocker there. The biggest Democratic contributors were labor unions, although energy and gambling interests also played a role. On the Republican side, big corporations and industry groups topped the list. A few groups, like AT&T and PG&E hedged their bets by playing both sides.

Independent expenditures

Party donations can help identify which organizations might be most active under this new campaign finance regime, but they don't quite make for a fair comparison.

The new spending allowed under the Supreme Court decision is more similar to California’s system of independent expenditure committees, which underwrite millions of dollars worth of political advocacy during election years.

A study by the California Fair Political Practices Commission in June 2008 identified 10 of the largest independent expenditure committees in the 2006 general election, when the marquee race featured Democrat Phil Angelides squaring off against Arnold Schwarzenegger for governor.

The two largest committees that year, Californians for a Better Government and Alliance for a Better California, both of which supported Angelides, were funded primarily by unions – at least where organizational donors are concerned.

JOBS PAC, which was sponsored by the California Chamber of Commerce and backed mostly Republican candidates in the general election, was funded largely by corporations, including Chevron, PG&E and Ameriquest Capital Corporation.

Note that even among independent expenditure committees, which have no fund-raising limits, large corporations did not dramatically outspend unions and ideological groups. In fact, if you look at this chart of the largest independent expenditure contributors from 2001-2006 (from the FPPC report), you won't see any large corporations at all:

Supporting the party in power

Experts have noted that the California election that may be affected most by the Supreme Court's decision is the race for Barbara Boxer's Senate seat.

Democrats widely argued that Republicans would have the advantage. Even Boxer's campaign spokeswoman, Rose Kapolczynski, saw reason to worry.

"It's one of those things you can't control," she said. "We've always been prepared for a tough race, and we'll continue to work as hard as we can raising money and putting together our coalition."

On the other side of the aisle, Republican Assemblyman and Senate candidate Chuck DeVore argued to the Los Angeles Times that Democrats would see a bump because donors tend to support the party in power.

Looking at Boxer's PAC donations over the last year shows that although she has attracted her largest share of support from ideological groups and labor unions she has definitely had her share of business support.

Many of those business donors opposed Boxer during her last general election bid against former Secretary of State Bill Jones in 2004 but have fallen back in line with her since. The Associated General Contractors of America trade group, for example, supported Jones with $10,000 in 2004 but gave Boxer $10,000 last year, records show.

Other groups did the same, which is hardly unusual. But it speaks to the point that although some corporations tithe regularly to the party in power, particularly during off years, they are also willing to support an opponent if it doesn’t mean risking their standing.

The takeaway

There's no telling yet how exactly the Supreme Court ruling will transform the campaign finance landscape in California, but we might be able to learn a few things from how donors have behaved in the past.

The big players aren't a surprise: unions and large companies that are pretty much household names in politics here. But even when given the opportunity to donate unrestricted through independent expenditure committees, unions and interest groups have in many cases stepped up with more money than big business.

Particularly in federal elections, with their strict campaign giving limits, donors like to play both sides. Boxer has gotten plenty of support from big business, but there's no telling where the money will go if Republcan-leaning business interests think they can unseat her in November.