TARP-Aided Firms Give Big to PACs

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October 25, 2010; Source: Washington Post | Many nonprofits had criticisms of the Troubled Assets Relief Program (TARP) that bailed out banks, insurance companies, and Detroit automakers, suggesting that hard-pressed charities needed just as much help to meet burgeoning human service needs at a time when charitable support and government funding were tanking.

Today’s Washington Post article about the generosity of TARP-subsidized companies to Political Action Committees is shocking for the hubris of companies like General Motors, which put $190,000 toward campaigns in the past month—including money to Senate Minority Leader Mitch McConnell (R-KY) who opposed TARP support for the automaker.

GM has company: 23 corporations (with PACs) that received $1billion in TARP funds donated just short of $1 million in August and $1.4 million in September to political candidates, most of them Republicans – the party that didn’t generally support the TARP bailout in the first place. The top two recipients of TARP corporations’ political donations have been House Minority Leader John Boehner (R-OH) and House Republican Whip Eric Cantor (R-VA).

Why is this important to nonprofits? Remember NPQ’s coverage of the anonymous corporate contributions to 501(c)(4) organizations. Contributions to PACs must be disclosed. In the wake of the Citizens United decision, unrestricted, uncapped corporate donations to 501(c)(4)s can be kept secret. If they’ve given a disclosed $1.4 million to PACs in September, just imagine how much undisclosed money went to “nonprofits” engaged in electioneering—the large bulk of that in support of Republicans.

Here’s the ultimate irony: many of the TARP-subsidized corporations making these political donations still owe money to the government, the TARP subsidies that were supposed to have been repaid.—Rick Cohen

  • Ken Knox

    It’s a little stretch to say that Republicans “generally” did not support the TARP bill. Both Cantor and Boehner voted for it along with 91 other colleages (108 said “no”). That’s a close call of only 17 votes difference. And, George Bush signed it into law! Offsetting these PAC contributions are huge amounts going to Dems by unions. Worth mentioning?

  • Lynn Amano

    I find articles like this to be unnecessarily confusing. My understanding is that corporations are still prohibited from contributing directly to candidate campaigns, and therefore traditional PACs as well. What they can now contribute to is what people are calling Independent-Expenditure organizations, which do NOT contribute directly to candidates. Unlike PACs, they can spend unlimited amounts on independent expenditures to support a candidate but they cannot coordinate these expenditures or give directly to campaigns in the way the federally registered connected and independent PACs do, and they do not have to disclose in the same way.
    The court’s ruling allowing corporate contributions applies only to independent expenditures, not coordinated or direct campaign contributions to individuals or registered PACs, which are still prohibited.