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06 Dec. 2016 | Comments (0)


Michelle Diggles, a senior political analyst with third way, a centrist think tank that addresses such problems as public policy, recently spoke with Gary Larkin, the corporate governance research associate at The Conference Board.

As another US presidential cycle has wound down, corporations are facing a huge perception problem when it comes to corporate political spending and lobbying. Studies completed by third way show that most voters rank special interest influence over government as the top personal worry tied with a possible terrorist attack. The problem is that most of these same voters believe corporations are among those special interests. The reality is that while overall political spending has increased more than $1 billion since the 2010 Citizens United vs. FEC decision, companies only made up only 8 percent of Super PAC money from January 2015-July 2016, according to The Conference Board’s Committee on Economic Development.

Diggles, who recently spoke to The Conference Board Committee on Corporate Political Spending, said that voters believe that money in politics keeps Congress from acting behalf of the American people. She also believes that American corporations can be part of the solution to correct this perception and work with other stakeholders to close the representation gap. (The Governance Center plans to publish highlights from the October 20 political spending committee meeting soon. For information on The Conference Board Committee on Corporate Political Spending, click here.) She recently shared some of her thoughts on this issue as well as the disclosure of corporate political spending and lobbying.

The Conference Board: How have special interest groups gained so much influence over elections? Diggles: It’s hard to say if there have been any gains by special interest groups. Certainly, the public perception has grown that they have gained influence. But what do people mean when they say “special interests?” It’s been part of the political vernacular for years. When you talk about special interest groups, it is really an empty vessel. The liberals think they are corporate lobbyists or wealthy individuals who want lower taxes. On the right, they think they are environmental organizations.

You cite studies from your organization that found Congress isn’t listening to its constituents and that there is a direct link between gridlock and campaign spending. Why is that? There are two ways this operates. First, there is the perception by voters of pay to play. Members of Congress interact regularly with wealthy individuals. The sense of voters is that politicians run in the same circles as the elite. There is a belief that politicians don’t understand middle class families because they don’t interact with them. Then, there is the correlation voters make about the Citizens United decision has led to an explosion of political spending. At the same time, four in 10 of Americans don’t know who runs the House or the Senate. They aren’t interested because they feel out of touch with their representatives. And the press reinforces the perception of the connection between gridlock and campaign spending by writing about it.

How much influence has the Citizens United decision had? If I’m not mistaken, Citizens-United led to some kind of influence in political spending among individuals. But a case involving the Wisconsin Right to Life Inc. (FEC vs. WRTL) in 2007 had the biggest influence on campaign spending. In that case, the Court made it harder for the government to ban sham issue ads close to the election that aren't express advocacy (or its equivalent). We're not quite sure exactly what the equivalent of express advocacy is. However, in the Wisconsin case the court basically said that an ad can only be limited if the only reasonable interpretation is that it is equivalent to express advocacy. If you can reasonably interpret it as an issue ad, it can't be limited. That means the government has a high bar to meet before it can attempt to limit the ad, so the advantage goes to the ad-maker.

Many people say corporations have taken advantage of the Citizens United decision, but political spending statistics show that isn’t the case. Why is that? The campaign finance rules are not clear to most voters. They don’t think about the language, i.e. PACs, Super PACs. They just look for signals. What they see is such messages as, “the system is rigged and it is being driven by the special interest groups.” They are mucking up our political system.

How important is corporate disclosure of political spending and lobbying? It’s very important because of the generational shift in our population. Millennials are starting to surpass the Baby Boomers, and many are eligible to vote. They have grown up in a different time period. They have all the technological tools. If they don’t know something, they can Google it. To them, it’s unacceptable not to know who is spending what money to influence a race. They believe they should be able to Google that information. A lot of folks studying political spending disclosure think that hyper transparency is the cure.

You have mentioned that a long-term solution to gridlock and out-of-control political spending is building a bipartisan coalition. But you point out that the business community isn’t included. How important is their participation and do you know of any efforts to reach out to them? It’s something that has to happen. Third way doesn’t work on campaign spending as a long-term issue. It just bubbled up in 2015 during our studies. When we survey groups about political spending and campaigns, they say the business community is never included. It has been largely absent from the discussion. The people we spoke to aren’t happy with the way that money is spent by companies. It’s a group that hasn’t been hit up yet. Now, we are reaching out to the business community. We are forming a working group. In 2017, we are trying to do more work on closing the representation gap. We are looking at what is going on in the states as far as changing the way politicians are voted, such as ranked choice voting. That is where you have multiple candidates on a ballot and the voter ranks each candidate they would vote for. Such weighted voting gives voter more of a feeling that they are not throwing away their vote on a third party candidate. [Such a change could make campaign spending less of an issue for voters who currently forced to decide between two candidates who usually use that money for attack ads.]

The views presented on the Governance Center Blog are not the official views of The Conference Board or the Governance Center and are not necessarily endorsed by all members, sponsors, advisors, contributors, staff members, or others associated with The Conference Board of the Governance Center.

  • About the Author:Gary Larkin

    Gary Larkin

    Gary Larkin is a research associate in the corporate leadership department at The Conference Board in New York. His research focuses on corporate governance, including succession planning, board compo…

    Full Bio | More from Gary Larkin


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