Eric Bauman emerged as the new chairman of the California Democratic Party this month by a razor-thin margin that revealed deep divides among Democratic activists. If Bauman wants to unify progressive Berniecrats and longtime party stalwarts, he should lead an effort to ban corporate contributions to state parties and candidates.
Delegates interrupted Democratic National Committee Chairman Tom Perez at the California convention with shouts decrying so-called corporate Democrats. The party has responded by voluntarily swearing off oil company donations under pressure from R.L. Miller, head of its environmental caucus. Several 2018 gubernatorial candidates similarly signed pledges from the Sierra Club to forgo oil money in their campaigns.
But selective unilateral disarmament in the fundraising arms race raises more questions than it answers. What about donations from health insurance companies, pharmaceuticals or telecom giants? How about tobacco companies or Wall Street banks? Where should the party draw the line?
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A better approach would be to completely ban all corporate donations to all California candidates and parties, just as the federal government and 22 states have done. In 2002, Rep. Nancy Pelosi and California’s Democratic congressional delegation joined moderate and progressive Democrats and a few Republicans in banning corporate contributions to federal parties – a provision that was just reaffirmed by the U.S. Supreme Court. The DNC and DCCC have successfully adapted to the new rules, as have Republicans.
Corporations aren’t people, but they are formed by people for economic purposes. Just as it would be wrong for a minister to take funds donated for a religious purpose and spend them on politics, it is inappropriate for a CEO to take funds from shareholders and customers to fund political campaigns they may disagree with.
Barring CEOs from giving corporate funds to parties won’t get big money out of politics. Individual shareholders and corporate leaders would still donate to pro-business political committees and would still have outsized access. But at least these contributions would accurately reflect the political views of the donors, unlike corporate treasury funds. Also, these aggregated contributions would not reap any undue financial privileges or tax advantages granted to corporations.
Further, under misguided Supreme Court rulings such as Citizens United, corporate CEOs could still use shareholders’ money without their approval for independent campaigns opposing or supporting candidates.
So the question for Bauman and other Democratic leaders is whether it is better to channel corporate money through the political parties or outside of them. Laundering money through a party bank account makes the cash look cleaner to voters by concealing its true source. But it makes the party itself look less attractive to small donors and activists, who currently funnel their money and efforts into outside groups such as DailyKos and MoveOn.
It would be better for the California Democratic Party and for voters to reverse things and have small donations flow through parties and corporate money go around them.
With a two-thirds majority in the Legislature, California Democrats can move corporate money away from all political parties and candidates if they want. Whether they will is a key indicator of whether promises of unity and transparency are just talk or truly a sign of a new era in California politics.
Derek Cressman is a government watchdog and author of two books about money in politics. He can be contacted at DC@derekcressman.com.