The Ethics of Combining Charitable and Campaign Contributions
It amazes me how many ways elected officials misuse charitable
organizations to engage in ethical misconduct, especially to get
around gift rules. One would think that charities would be
sufficiently sacrosanct. But instead they are frequently used as an indirect form of pay to play, and they have played a major role in getting around campaign finance limitations.<br>
<br>
The form of misuse of charitable organizations that this post will look at
involves a company that wants to get around restrictions on
corporate campaign contributions. It is not enough that the
company's employees are allowed to give to a corporate SSF
(separately segregated fund, essentially a corporate PAC). The
company decided to induce such gifts by double "matching" them with
its own gifts to a charitable organization that does only one
thing: help out its employees when they are in need.<br>
<br>
The company is Wal-Mart, the charity is Wal-Mart Associates in
Critical Need Fund, and the matter that has arisen is <a href="http://www.citizen.org/documents/fec-walmart-complaint.pdf" target="”_blank”">a
complaint filed with the Federal Election Commission</a> (FEC) by
Public Citizen and Common Cause. The most amazing fact stated in the
complaint is that the FEC has already issued twelve opinions on this
very topic, allowing almost all of the situations on
the grounds that there was not "an exchange of corporate treasury
funds for voluntary contributions and a form of indirect
compensation for the contributor's contribution."<br>
<br>
However, there were
dissents to some recent decisions, and with respect to the most recent
one (where the "matching" funds were greater than 1-1, but there were
multiple charities to choose from), the FEC split 3-3.<br>
<br>
The fact that companies keep trying to find legal ways to use
charitable contributions to induce campaign contributions from their employees shows how
willing companies are to ignore the ethics of doing this. They do this at the cost
of degrading areas of life that have nothing to do with the
workplace or with elections, including, in this case, charitable
giving and the feelings of compassion individuals have for their
co-workers who are in need.<br>
<br>
The legality of using charities to induce campaign contributions from their employees, instead of simply paying them the money directly, should not be dependent on whether this transaction
involves an exchange of corporate funds or indirect compensation.
The issue should instead be the ethics of involving charitable
giving in campaign fundraising in any manner at all. This is an
ethical issue rather than a legal one, and legal descriptions cannot
capture the inappropriateness of combining the two. It is better
that they not be combined at all.<br>
<br>
Robert Wechsler<br>
Director of Research-Retired, City Ethics<br>
<br>
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