October 28, 2006
By JEFF ZELENY and ARON PILHOFER
WASHINGTON, Oct. 27 — Corporate America is already thinking beyond Election Day, increasing its share of last-minute donations to Democratic candidates and quietly devising strategies for how to work with Democrats if they win control of Congress.
The shift in political giving, for the first 18 days of October, has not been this pronounced in the final stages of a campaign since 1994, when Republicans swept control of the House for the first time in four decades.
Though Democratic control of either chamber of Congress is far from certain, the prospect of a power shift is leading interest groups to begin rethinking well-established relationships, with business lobbyists going as far as finding potential Democratic allies in the freshman class — even if they are still trying to defeat them on the campaign trail — and preparing to extend an olive branch the morning after the election.
Lobbyists, some of whom had fallen out of the habit of attending Democratic events, are even talking about making their way to the Sonnenalp Resort in Vail, Colo., where Representative Nancy Pelosi of California is holding a Speaker’s Club ski getaway on Jan. 3. It is an annual affair, but the gathering’s title could be especially apt for Ms. Pelosi, the House minority leader, who will be on hand to accept $15,000 checks, and could, if everything breaks her way, become the first woman to be House speaker.
“Attendance will be high,” said Steve Elmendorf, a former Democratic Congressional aide who has a long list of business lobbying clients. “All Democratic events will see a big increase next year, no question.”
While business groups contained their Democratic contributions to only a handful of candidates throughout the year, a shifting political climate and an expanding field of competitive Congressional races has drawn increased donations from corporate political action committees.
For the first nine months of the year, for example, Pfizer’s political action committee had given 67 percent of contributions to Republican candidates. But October ushered in a sudden change of fortune, according to disclosure reports, and Democrats received 59 percent of the Pfizer contributions.
Over all, the nation’s top corporations still placed larger bets on Republican candidates. But at the very time Republicans began to fret publicly about holding control of Congress, a subtle shift began occurring in contributions to candidates, particularly in open seats.
“We keep fighting up until the last minute of the last day,” said William C. Miller, vice president for political affairs at the U.S. Chamber of Commerce, carefully measuring his words to remain positive about the Republicans’ chances. “But when the smoke clears on Nov. 8, there are certainly going to be lots of opportunities for us to get to know the new freshman class.”
An analysis by The New York Times of contributions from Oct. 1 to 18, the latest data available, shows that donations to Republicans from corporate political action committees dropped by 11 percentage points in favor of Democratic candidates, compared with corporate giving from January through September.
Republicans still received 57 percent of contributions, compared with 43 percent for Democrats, but it was the first double-digit October switch since 1994. “A lot will hold their powder for now,” said Brian Wolff, deputy executive director of the Democratic Congressional Campaign Committee. “But after the election, we will have a lot of new friends.”
Even before the election, many new contributions were funneled toward open races, like the Eighth Congressional District in Arizona. The Democratic candidate, Gabrielle Giffords, received checks of $5,000 each from the political action committees of United Parcel Service and Union Pacific. Lockheed Martin split the difference, donating $3,000 to Ms. Giffords and sending the same amount to her Republican rival, Randall Graf.
Until October, Lockheed Martin, the giant military contractor, had been following its pattern from recent elections of giving about 70 percent of contributions from its political action committee to Republicans. But Lockheed Martin’s generosity shifted in the first half of October, with Democrats receiving 60 percent of donations, or $127,000.
While Republicans and Democrats are feverishly soliciting contributions until Election Day, campaign finance reports filed this week provide a window into the final days of a raucous midterm election campaign. The analysis of 288 corporate political action committees, which have contributed more than $100,000 this election cycle, found that at least 65 committees had increased their ratio of contributions to Democrats by at least 15 percentage points, including Sprint, United Parcel Service and Hewlett-Packard.
A notable exception to the flurry of last-minute giving is Wal-Mart.
“We had a two-year strategy to build up relationships with Democrats,” said Lee Culpepper, the vice president for federal government relations at Wal-Mart. “This wasn’t something that we decided in August that we needed to do and we ran out helter-skelter to try to do it.”
One sign of fresh interest in the prospects of Democratic Congressional races came one morning this week when more than 100 lobbyists crowded into Democratic Party headquarters on Capitol Hill. Over Dunkin’ Donuts and coffee, the executive director of the party’s Congressional committee, Karin Johanson, delivered a private briefing on the race to a sea of unfamiliar faces, despite spending 30 years in politics.
“People are excited,” she said later in an interview. “It was, by far, the best attended one ever.”
As some young Republican lobbyists fled Washington to spend the final days working on too-close-to-call races in Ohio or Pennsylvania, their senior counterparts stayed behind to begin studying prospective members of the new freshman class. Even if Republicans hold control, the next Congress will almost certainly include at least a handful of moderate Democrats who defeated Republicans and will be looking for allies in the corporate world.
Peter Welch, the Democratic candidate for Vermont’s single House seat, has already been telephoning some members of the Washington business lobby, offering an opportunity to begin a good relationship if he wins election. Never mind that his Republican opponent, Martha Rainville, has received a host of endorsements from the business community.
“The real story of the 2006 contributions is what happens in the early phase of 2007, with a change in party control,” said Bernadette A. Budde, senior vice president of the Business-Industry Political Action Committee. “There will be proverbial meet-and-greets all over town so we will have a sense of who these people are.”
Many of these meet-and-greet sessions will have a dual purpose: political action committees will offer contributions to help candidates wipe away debt their campaigns accrued during the race.
Spending in the midterm election campaign is forecast to reach $2.6 billion, according to the Center for Responsive Politics, including $1 billion from political action committees. While many business groups have been eager to appear as if they have been handily contributing to Democratic efforts, it was not until this month that the trend became apparent enough to quantify beyond party leaders or prospective committee chairmen.
Democrats who are not in tight races — or even standing for re-election in some cases — have seen their contributions increase more than some of those facing the most competitive contests. That is an easy way, lobbyists say, for political action committees to increase the share of their Democratic contributions, a percentage that is carefully tracked by party leaders when they reach the majority.
Representative Adam Smith of Washington, who leads a coalition of centrist Democrats, said he has detected a friendlier relationship with the business community in recent months, a welcome change from years of Republican rule when “Democrats were basically frozen out in every way.”
“I hope that the new Democratic majority will take a more open and cooperative approach,” Mr. Smith said in an interview. “I hope there won’t be a sense of, ‘Oh, you gave too much money to Republicans, so we’re not going to talk to you.’ ”