In the midterm elections, utilities have a foot in both camps
Next week’s election is forecast to be the costliest midterm in history, and utilities have no small part in helping to set the record.
So far, the industry has spent more than $20.1 million on candidates, party committees and soft money contributions, according to the Center for Responsive Politics (CRP), ranking 25th in spending among all politically active industries in the country. That total compares to the previous midterm spending record for the industry in 2010, when the industry shelled out $20.5 million, but could move higher in the final days before ballots are cast.
The National Rural Electric Cooperative Association (NRECA), a trade group representing private, not-for-profit, consumer owned utilities, is the largest single contributor, with more than $2.7 million spent this cycle. Second is Exelon with $1.5 million, followed by Duke Energy ($1.01 M), Dominion ($880,600), and Southern Co. (802,300), according to CRP numbers.
Industry contributions have leaned toward Republicans in the midterms, but utilities aren’t putting all their eggs in one basket. About 62% of contributions from the utility industry and those working in it went to Republicans this year and last, and about 38% to Democrats. Each of the top 20 industry contributors gave to both parties, although all but three—PG&E, Calpine and Sempra (ranking 7th, 19th and 20th, respectively)—gave significantly more to the GOP.
While it may seem odd for so many companies to have a foot in both camps, campaign finance experts say it’s a strategic choice.
“I think generally—and this seems to be true for utilities—big corporations, especially if they’re publicly traded, or heavily regulated, or if they have consumer identification, they don’t want to be seen as too partisan,” said Russ Choma, the money-in-politics reporter at CRP.
Choma says that more than party identification, utilities are looking to contribute more to people with power in the system.
“Right now the Republicans are pretty firmly in power in the House, and they may be in power in the Senate,” he said. “A lot of people seem to think they are, so … that wouldn’t be a bad bet to make.”
Choma says that for utilities, party identification is more a marriage of convenience than an ideological commitment. Companies logically want to curry favor with the most powerful people they can, especially if they perceive aligning interests or that certain officials may have direct impacts on their business plans. Back in the 2008 and 2010 elections, the industry contributed to both parties almost equally.
“That was when the Democrats held both the houses,” Choma pointed out, “and you’ll see going back to ... 1990-1994, they gave more money to Democrats, which was the height of Democratic power."
But, utilities’ current romance with the GOP doesn’t mean they don’t have Democratic sweethearts as well. Though John Boehner is the top single candidate recipient of utility funds with $368,800, Sen. Mary Landrieu of Louisiana—who, it should be said, is in a tough reelection battle—is second with nearly $300,000. House Democratic Whip Steny Hoyer comes in third with $237,000.
Choma says the logic goes back to the doctrine of supporting powerful people who agree with you. Landrieu has long been one of the biggest fossil fuel supporters in her party.
“There are Democrats who are anti-regulation, and I think some of that has to do with regional [dynamics],” he said. “In the South the Democrats you find are generally more conservative. I think Mary Landrieu is a good example in Louisiana. Energy is a big industry in Louisiana … you’ve got an environment that’s much different than, say, Massachusetts.”
It isn’t just conservative Democrats that interest utilities, Choma said. Members of the leadership, like Hoyer, or powerful committee chairs are also important targets.
“Those are Democrats that even if they don’t have interests exactly aligned with utilities they can't be ignored and they still have to be courted,” he said.
But while utilities may waffle back and forth historically between the parties, they remain committed to one group in particular.
“One of the biases that we see from big industries and big companies is more toward the incumbents,” Choma said. Of the nearly $16.5 million the industry gave directly to candidates this cycle, those already in office got more than $15.3 million of it.
Most of the top five utility company contributions seem to follow the patterns laid out by campaign finance experts like Choma, but there are exceptions. The largest personal recipient of funding from the National Rural Electric Cooperative Association, for instance, is a little-known freshman Missouri congressman Jason Smith (R). Although he holds no leadership position and little sway in his committees, the NRECA gave him $17,600—more than any other member of either party.
As it turns out, Smith was elected in a 2013 special election, after the sitting congresswoman from the Missouri 8th District abruptly stepped down. That congresswoman? None other than the current president of the NRECA, Jo Anne Emerson.
“That whole thing was sort of a surprising incident,” Choma said, referring to Emerson’s retirement. “We see a lot of people leave Congress and go to work as a lobbyist or the head of a trade association or something like that. We rarely see someone leave while they’re in office, so that was pretty surprising when that happened. And she had just won reelection too, so it was very very unusual to see that.”
Another unexpected development is the impact of the Citizens United case. After the Supreme Court removed limits to corporate spending in 2010, many observers worried corporations would secretly funnel millions of dollars to campaign coffers. Choma says that for large, well-known corporations, including utilities, it hasn’t exactly worked out that way.
“The fear of Citizens United is that it allows corporations to give money from their corporate treasury and unions as well,” he said. “But the fear that corporations would just take over and you’d have corporations just handing out big checks didn’t really come true because companies that are publicly traded or… have a consumer identity, or companies that are regulated don’t want to be seen getting involved with some of this outside stuff.”
“We’ve seen a huge influx of money, but a lot of it has come from very wealthy individuals or privately held corporations [after Citizens United],” he continued. “So, if you’re a publicly traded company and you’re a household name or if you’re someone who has to go to regulators .. you aren’t going to be seen dumping four, five, or six million dollars into a Super PAC. So, it’s interesting to see that there really hasn’t been a ton of money [injected by corporations], at least not the trackable money.”
Even so, there are ways for corporations and their wealthy employees to avoid public scrutiny. Donations to politically active nonprofits don’t show up in CRP’s electoral datasets because those organizations aren’t required to disclose their donors.
“You wouldn’t see that [in CRP data] from the company and you wouldn’t see it from the CEOs, at least from the [Federal Election Commission data], he said.” The company, depending the regulations its under, it might show up [in their records].”
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