We Did it: What’s in a word for corporate PACs? — Tenney to be certified as winner in NY-22, Brindisi plans to appeal — Fetterman officially running in Pennsylvania

Feb 08, 2021

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Quick Fix

— Companies and candidates alike rely on public misconceptions of what a corporate PAC actually does when talking about them.

— A New York state judge ordered that election results in NY-22 be certified, handing Republican Claudia Tenney a narrow win over Democrat Anthony Brindisi. Brindisi's team is still considering its options for an appeal and a recount.

— A busy day of Senate news: Pennsylvania Lt. Gov. John Fetterman is officially in, a Democrat declares against Sen. Roy Blunt (R-Mo.), and Sen. Richard Shelby (R-Ala.) is reportedly nearing a retirement announcement.

Good Monday morning. Email me at zmontellaro@politico.com , or follow me on Twitter at @ZachMontellaro.

Email the rest of the POLITICO Campaigns team at sshepard@politico.com, jarkin@politico.com, and amutnick@politico.com. Follow them on Twitter: @POLITICO_Steve, @JamesArkin, and @allymutnick.

Days until the LA-02 and LA-05 special elections: 40

Days until the New Jersey and Virginia gubernatorial elections: 267

Days until the 2022 midterm elections: 638

Days until the 2024 election: 1,366

TopLine

PAC ATTACK? — What exactly is a corporate PAC? At least judging off my Twitter mentions and email inbox, there's still significant confusion about what a corporate PAC is, and what it can or cannot do. Candidates and corporations are taking advantage of that confusion, so let's clear this all up, using two recent examples of corporate PACs in the news.

What corporate PACs are not: vehicles for corporations to funnel an unlimited amount of money to federal candidates. Corporate PACs can give individual candidates no more than $5,000 per election — which in an era of ballooning fundraising, isn't a heck of a lot of money on its own. And corporate PACs can't accept unlimited amounts of contributions, either; The corporation itself cannot contribute anything to the PAC's pool of money that is then doled out to politicians. Only certain individuals — generally a specific class of employees or shareholders — can give to the PAC, and each has a $5,000 per year maximum. People unaffiliated with the corporation also can't contribute to the PAC; I couldn't give Microsoft's corporate PAC any money, even if I wanted to (and I don't). These same basic principles govern labor unions and trade associations' PACs, as well: They are collectively known as "separate segregated funds" in campaign finance parlance. Here's the FEC's explainer on it.

That's the part that corporations typically emphasize when talking about corporate PACs: "It's not us giving the money — it is our employees working together!" And they'd be right … to an extent. But while corporations can't contribute the money that goes to politicians, they can cover the overhead of running the PAC. The examples the FEC gives are "office space, phones, salaries, utilities, supplies, bank charges and fundraising activities." That's no small cost — and corporations are allowed to, as the FEC puts it, "exercise control over its SSF." So they aren't totally independent entities acting without the parent corporation.

With all that in mind, let's consider two recent corporate PAC stories: the push for corporate PACs to not donate to lawmakers who voted to reject the election results, and a broader anti-corporate PAC pledge. In a drive kicked off by the newsletter Popular Information, scores of corporations have said they were suspending PAC donations, either to all members (which ticked off Democrats), or only those who voted to reject the presidential election.

I've expressed repeated skepticism about these pledges in Score, for two reasons: Companies that don't give a timeline for how long they'll suspend donations aren't really committing too much because their contribution timeline is per election, not per year. (Corporate PAC donations are usually slow in Q1 of an off year anyway.) And while these corporate donations can be the backbone of fundraising for backbenchers, "star" politicians — who, say, are considering a presidential run — have plenty of other avenues to raise money. (And corporate PACs don't typically give to presidential campaigns.)

Late last month, Microsoft president Brad Smith candidly explained why corporate PACs were likely to survive: Members in Washington are responsive to their donations. (The tech giant released a full transcript of his comments, which are worth reading.) Yet on Friday, Microsoft announced that its corporate PAC would suspend donations for the 2022 cycle to members who objected to certification. Unlike some other corporations, Microsoft's decision will have some kick to it: They laid out a specific timeline instead of an unspecified pause, and said explicitly who they won't donate to.

And now, the anti-corporate PAC pledge: Waves of Democratic candidates took it in 2018, where they swore them off as part of an anti-corruption message. In actuality, they weren't sacrificing much: Corporate PAC donations don't typically go to challengers. They go disproportionately to incumbents. The power in the pledge would really be once those candidates took office, not before. (And not for nothing, many of them have had no problems raising millions of dollars without corporate PAC donations, relying on fired-up small donors.)

That's what makes one Democrat's decision from the class of 2018 so notable: Virginia Rep. Elaine Luria swore off corporate PAC donations when she first ran in 2018, before quietly starting to accept them at the end of 2020. Roll Call's Kate Ackley has been all over this, and Luria's camp recently tried to explain her decision to The Virginian-Pilot's Robyn Sidersky : "When asked why Luria changed her mind, [campaign manager] Kate Fegley wrote, 'We've always taken ideological PAC money, association PAC money, and labor PAC money. All of our reports show that. The new element is corporate employee pooled money. All these PAC funds come from individual small dollar contributions from employees.' Campaigns make the distinction of 'corporate employee-funded PACs' and 'corporate PACs' because when someone says 'corporate PAC,' folks think big business money, Fegley said."

This is a nonsense distinction that Luria's camp is trying to draw. It is true that corporations can also donate an unlimited amount of money to super PACs, but any common definition of corporate PACs is the so-called "corporate employee pooled money." Luria's team also told The Pilot that she did not make a similar promise in 2020, just when she first ran in 2018.

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Down the Ballot

NEVERENDING ELECTION? — A resolution may be in sight in NY-22. State Supreme Court Justice Scott DelConte, who was overseeing the troubled canvassing of the votes in the upstate district, ordered on Friday that the counties certify their totals, which have Tenney winning by just over 100 votes, POLITICO New York's Anna Gronewold reported. More from Anna: "DelConte criticized local elections boards for what he said were 'systemic violations of state and federal election law' that affected both parties. But that's up to the state board of elections, New York Gov. Andrew Cuomo and the U.S. Department of Justice to handle, not his court, he said. He also noted that for all the errors, there was no fraud." The election still needs to be certified by the state board of elections. An attorney for the board told The Syracuse Post-Standard's Patrick Lohmann on Friday that the board already had a meeting scheduled for Wednesday, but was trying to move it up.

But, as Anna notes, this may not be the final word on the race: "Brindisi's team said they are prepared to appeal rulings on several hundred contested ballots that DelConte had said were not legally cast. They are still reviewing the order to decide where on state or federal levels they will make their case for pursuing a complete hand audit." Democratic superlawyer Marc Elias tweeted on Saturday that there "needs to be a recount" in the district.

THE SENATE MAP — Fetterman, the Pennsylvania lieutenant governor, is officially getting in the Senate race after a brief exploratory period that saw him raise over $1.4 million. "I'm running because it's kind of closing the circle on a 20-year journey I've been on," he said in an interview with POLITICO's Holly Otterbein. "I came to Braddock 20 years ago in 2001, and it was a deliberate choice to do that. It was one of the most marginalized, forgotten, overlooked and abandoned communities in the state. And I wanted to work [for] issues — the central theme was inequality — and that's what I did."

— Democrats are hoping for a reset with the now-open Ohio Senate race in 2022, after a string of losses for candidates not named Sherrod Brown in the state. But that's easier said than done, POLITICO's James Arkin wrote. "We've got a ways to go on building the infrastructure we need in Ohio. But 80 to 90 percent of the problem is and has been the national brand, the perception of what Democrats believe and stand for nationally on the coasts, versus what we stand for as Democrats in Ohio," Rep. Tim Ryan (D-Ohio), who has privately been telling people he plans on running, told James. Read on for a more expansive look at other candidates who are considering a run.

On the other side of the coin: State Republican Party chair Jane Timken announced she would step down from her post as she considers a Senate run of her own. She was reelected to another term as party chair last month.

— In retirement watch news: Shelby has told people privately he doesn't intend to run for reelection in 2022, the AP's Kim Chandler reported, but some in Alabama are trying to get him to change his mind. Shelby spokesperson Blair Taylor told the AP that Shelby has not made a decision, "but there will likely be an announcement forthcoming in the next few weeks."

— Former Missouri state Sen. Scott Sifton, a Democrat, is launching a bid against Blunt in Missouri. James has more (for Pros), including his team of campaign operatives and consultants.

ON MY MIND — Expect Georgia to be the center of the political universe in 2022. The Atlanta Journal-Constitution's Greg Bluestein has a good scene-setter in the Peach State, where both Republican Gov. Brian Kemp and Democratic Sen. Raphael Warnock are up for reelection. Kemp has his "head on a swivel," with both a primary challenge and a rematch with Democrat Stacey Abrams likely in his future. The field to challenge Warnock also remains murky, with "a lot" of Republicans exploring a bid. But Kemp is heading into his reelection with a pocket full of cash: He has about $6.3 million banked, per The AJC's James Salzer.

REPUBLICAN TEN-SION — Wyoming's state Republican Party has censured Rep. Liz Cheney for her vote to impeach former President Donald Trump. The censure resolution also put forward untrue accusations about the Jan. 6 riot at the Capitol, the Casper Star-Tribune's Nick Reynolds reported: It said the insurrection was "instigated by Antifa and BLM radicals," which is not supported by any sort of evidence.

If you thought this vote would pressure Cheney into changing her mind on Trump, you would be wrong. "We will not forget what happened on January 6th and that the single greatest threat to our republic is a president who would put his own self-interest above the Constitution, above the national interest," she told Fox News' Chris Wallace . (Her press office also blasted out the clip.) "You know, we've had a situation where President Trump claimed for months that the election was stolen and then apparently set about to do everything he could to steal it himself. And that ended up in an attack on the Capitol, five people killed that day."

THE UNOFFICIAL GUIDE TO OFFICIAL WASHINGTON: February is short month, but there is a lot in store. From the impeachment trial to the Covid relief package to intraparty squabbles, our new Playbook team is on the case. Rachael Bade, Eugene Daniels, Ryan Lizza and Tara Palmeri are canvassing every corner of Washington, bringing you the big stories and scoops you need to know – and the insider nuggets that you want to know – about the new power centers and players. "This town" has changed. And no one covers this town like Playbook. Subscribe to the unofficial guide to official Washington today .

LEADING THE PARTY — A whole slew of state party chair elections over the weekend. In Michigan, the state Republican Party picked former chair Ron Weiser to return to office in "one of the party's most bitterly fought elections ever," the Detroit Free Press' Paul Egan reported. (Now-outgoing party chair Laura Cox accused Weiser of facilitating a bribe late last week, which he denied.)

In New Hampshire, state Republican chair Stephen Stepanek was overwhelmingly reelected for another term, per WMUR's John DiStaso. Illinois Republicans picked Don Tracy, who ran for lieutenant governor in 2010, as party chair, the Chicago Tribune's Rick Pearson wrote. And in Minnesota, state DFL chair Ken Martin ran unopposed for another term, the Minneapolis Star Tribune's Stephen Montemayor reported.

FIRST IN SCORE — AD WARS — No Labels, the centrist group, is going up with a "six-figure" digital ad campaign starring Maryland Republican Gov. Larry Hogan. Hogan calls for "humility and bipartisan cooperation" in Washington, and a bipartisan pandemic relief deal. We'll let you devine the 20204 intentions here.

CONSULTANTS' CORNER — Hawkfish, the Democratic data firm backed by Mike Bloomberg, is closing up shop, POLITICO's Tyler Pager reported.

— Former DSCC comms director Lauren Passalacqua is joining Magnus Pearson Media as senior vice president.

THE OUTSIDE GROUPS — Longtime Chamber of Commerce chief Thomas Donohue is set to step down from his post and will be replaced by Suzanne Clark, The Wall Street Journal's Brody Mullins reported, saying an announcement is expected this week.

MAILING IT IN — Congressional Democrats are eying an overhaul of the USPS, which would include pushing President Joe Biden to appoint new board members in an effort to oust current Postmaster General Louis DeJoy, The Washington Post's Jacob Bogage reported.

CODA — QUOTE OF THE DAY: "He's kind of the Democratic version of John McCain. I say that partially in jest. But partially it's true: Joe's a hard guy to figure out how to lead. You know? He dances to his own music." — Sen. Jon Tester (D-Mont.) on his colleague Sen. Joe Manchin (D-W.Va.), to POLITICO.