Corporate Political Donations: Local Campaigns And Business Influence

Corporations are prohibited from contributing to federal elections, including federal, state, and local elections. This includes incorporated organizations, such as nonstock corporations, trade associations, and national banks. However, corporations can contribute to independent expenditure-only committees (Super PACs) and non-contribution accounts maintained by Hybrid PACs. These committees can accept unlimited contributions from corporations, but contributors must still abide by donation limits. Additionally, corporations can fund advertising that targets or promotes a specific candidate, as long as it is independent of the candidate's campaign or party committee.

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National banks and federally-chartered corporations are prohibited from donating to any election campaign

In the United States, national banks and federally-chartered corporations are prohibited from donating to any election campaign—be it federal, state, or local. This prohibition applies to any incorporated organization, including nonstock corporations, trade associations, incorporated membership organizations, and incorporated cooperatives. National banks, such as those chartered by the Office of the Comptroller of the Currency (OCC), are subject to this restriction. The OCC is the primary supervisory agency for national banks and is responsible for chartering them, reviewing branch and merger applications, and examining and supervising their activities.

Federally-chartered corporations, on the other hand, refer to organizations that are chartered by the federal government. This includes entities like federal savings and loan associations, which are also prohibited from contributing to any election campaigns. The Federal Reserve System directly supervises state-chartered banks that have chosen to become members, and it also oversees bank holding companies and financial holding companies.

While national banks and federally-chartered corporations cannot donate directly to election campaigns, they can engage in political spending through other avenues. For instance, companies may provide unlimited funding to trade associations organized under § 501(c)(6) of the Internal Revenue Code. These groups must have a "primary purpose" other than influencing elections, but they are permitted to engage in election-related activities. Similarly, groups organized under § 501(c)(4) of the Internal Revenue Code, often referred to as "social welfare" organizations, can also engage in political spending without disclosing their donors.

It is important to note that while corporations themselves are prohibited from contributing to election campaigns, they can establish and fund their own political committees, known as separate segregated funds (SSFs) or political action committees (PACs). These committees can then make contributions to candidates or parties, as long as they comply with relevant regulations. Additionally, corporations can provide free legal and accounting services to party committees, which may be considered a form of indirect political engagement.

Incorporated charitable organizations are prohibited from contributing to federal elections

While charitable nonprofits may engage in nonpartisan election-related activities, such as voter registration, get-out-the-vote efforts, and voter education, they must be careful not to endorse or oppose specific candidates or political parties. This means that staff and volunteers should refrain from using organizational resources like email addresses or office space when helping with political campaigns. Additionally, nonprofits should be cautious about publicly mentioning the political candidacies of their staff, board members, volunteers, and donors during organizational events and on their websites.

It is important to note that corporations, including charitable organizations, can use their treasury funds for certain election-related activities that benefit candidates. They can also fund advertising that targets or promotes a specific candidate, as long as it is done independently from the candidate's campaign or party committee. However, these corporate funds used for election-related activities are non-deductible for tax purposes.

Overall, while incorporated charitable organizations cannot contribute directly to federal elections, they can engage in certain election-related activities and promote specific candidates through independent means.

Corporations can donate to independent expenditure-only committees (Super PACs)

Corporations are prohibited from making contributions in connection with federal, state, or local elections. This includes national banks and federally chartered corporations, nonstock corporations, trade associations, incorporated membership organizations, and incorporated cooperatives. However, an exception to this rule is that corporations can donate to independent expenditure-only committees, also known as Super PACs.

Super PACs are political action committees that can accept unlimited contributions from individuals, corporations, labor organizations, and other political committees. They are not allowed to accept contributions from foreign nationals, federal contractors, national banks, or federally chartered corporations. While Super PACs can spend unlimited amounts of money on independent expenditures, they are not allowed to contribute directly to candidates or political party committees. This is because they are considered independent of any candidate or party committee.

The ability of Super PACs to accept unlimited contributions is based on the idea that independent spending cannot be corrupting, as concluded by the Supreme Court in Citizens United. However, this has led to concerns about transparency and the influence of wealthy individuals and special interests. Super PACs are not required to disclose their donors, and even when they do, the true sources of election spending can remain hidden, undermining voters' right to know who is funding these committees.

To address these concerns, legislation such as the Democracy Is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act has been proposed. This bill would require organizations making political expenditures to disclose donors who have contributed significant amounts during an election cycle and provide additional disclosures on certain political ads.

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Corporations can pay for the expenses of setting up and administering their own political committee

Corporations are prohibited from making contributions in connection with federal, state, or local elections. This includes national banks and federally chartered corporations, such as federal savings and loan associations. However, there is an exception for political committees that have incorporated solely for liability purposes.

While corporations cannot directly contribute to political campaigns, they can pay for the expenses of setting up and administering their own political committee, also known as a separate segregated fund (SSF) or PAC. This allows them to fund advertising that targets or promotes a specific candidate, as long as it is done independently of the candidate's campaign or party committee.

These corporate-funded PACs can accept contributions from individuals, corporations, and other political committees. However, it is important to note that corporations cannot reimburse individuals who make contributions to their PACs through bonuses, expense accounts, or other forms of direct or indirect compensation. Additionally, any goods or services sold to a PAC by an incorporated commercial vendor at a discounted rate may be considered a prohibited contribution.

By utilizing PACs, corporations can indirectly support political campaigns and influence elections while adhering to the legal restrictions on direct contributions. It provides them with a vehicle to channel their financial resources into targeted advertising and other election-related activities.

Contributions from corporations are prohibited, but funds from a separate segregated fund (SSF) can be used

Corporations are prohibited from contributing to federal, state, or local elections. This includes all incorporated organizations, such as nonstock corporations, trade associations, incorporated membership organizations, and incorporated cooperatives. National banks and federally chartered corporations are also prohibited from making contributions to any election campaigns.

However, there is an exception to this rule. Corporations can contribute to independent expenditure-only committees, also known as Super PACs, and to non-contribution accounts maintained by Hybrid PACs. These are political committees that are regulated by federal election law and must disclose their donors. Additionally, corporations can pay the expenses of setting up, administering, and soliciting contributions for their own political committee, called a separate segregated fund (SSF or PAC).

It is important to note that while corporations can contribute to Super PACs, they must abide by donation limits. These limits are updated every two years by the Federal Election Commission to account for inflation. Super PACs, on the other hand, may accept unlimited contributions from corporations, but these contributions are not tax-deductible.

While corporate funds used by trade associations for election-related activities are non-deductible for tax purposes, trade associations themselves are not required to disclose their donors. This allows corporations to fund advertising that targets or promotes a specific candidate, as long as it is done independently from the candidate's campaign or party committee.

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