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What The Media Tell Americans About Free Enterprise

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June 1998


Responsive to Questionable Data
Reporters Cite Flawed Numbers from Supposedly Nonpartisan Source

How much does corporate America compared to labor unions spend on political campaigns? This question was central to the debate over California's Proposition 226, which would have required labor unions in the Golden State to receive written permission from members before using their dues for political purposes.

Many reporters repeated the claims of one study in particular, from the liberal Center for Responsive Politics, which purported to show that there is much more corporate money in politics than labor money. But these reporters didn't mention that the study may have vastly overstated corporate political contributions.

In a May 18 story, Associated Press writer Steve Geissinger wrote: "Labor unions, although outspent 11-to-1 by corporations in 1996 federal campaigns, still sank $58 million into the election, according to the nonpartisan Center for Responsive Politics." USA Today's Martin Kasindorf cited the same study on the same day, reporting that labor "gave $115 million to state and federal candidates in 1996 and was outspent 11-to-1 by business interests."

But however much unions gave to politicians in 1996, the 11-to-1 figure has been called into question. Glenn Ellmers, director of research at the Claremont Institute in California, reviewed the CRP study for the May 20 Investor's Business Daily and found some problems. For example, CRP included any individual donation over $200 from anyone who works for a business as being from "corporate interests." Such donors were not necessarily giving for business reasons, and could even have been union members. These individual donations made up "close to half of the $653 million supposedly spent by firms," noted Ellmers.

He also learned that "CRP counts as 'business spending' donations from large groups that aren't businesses -- including some that are openly hostile to business." Incredibly, this included $51 million in donations from "lawyers and lobbyists." Overall, he found that "CRP's calculations are wildly out of synch with official figures from the Federal Election Commission," which "reported that business political action committees spent a total of $130 million, compared with $99 million spent by labor union PACs."

But Ellmers' expose didn't stop reporters from quoting the CRP study. "Unions argue that the measure will hand more political power to business, which already has the upper hand in political contributions," staff writer Karen Brandon told readers of the May 28 Chicago Tribune. "In the 1996 elections, for instance, business interests outspent labor 11-1 in contributing to the major political parties and for candidates for president and Congress, according to the Center for Responsive Politics, a nonpartisan group based in Washington, D.C." And in a May 28 New York Times story on Proposition 226, Don Terry noted in passing that "corporate America outspent labor 11-1, contributing $653 million, of which 60 percent went to Republicans."

Rich Noyes


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