Companies can pressure employees to contribute

topic posted Wed, September 9, 2009 - 1:20 PM by  Leslee

Neither stockholders nor union members can be coerced to contribute-the organization doesn't have power over them, they have power over the organization. Managers, however, can be coerced. As a result, virtually all corporate PAC money comes from employees rather than stockholders.

...........If your boss comes to you and asks for a contribution, saying he or she hopes that all team players will be generous, it's not easy for you, an ambitious young manager, to say no. Some companies apparently do not pressure employees to contribute, but others do. For example, at one company we studied, the head of government relations told us that each year he and the company's lobbyist go to each work unit and hold an employee meeting: "We talk about the PAC and what it means to the company and what it means to them as individuals, and we solicit their membership; if they are members, we solicit an increase in their gift." Then the employees' boss is asked "to get up and say why they are members and why they think it's important for an employee to be a member." The upper-level manager clearly has no confidentiality, which in itself sends a key message to others. A number of coercive elements converge in this solicitation: The meeting is public, employees are to commit themselves then and there in the public meeting, the boss recommends that subordinates contribute, and an impression is probably conveyed that the boss will be evaluated on the basis of his or her employees' participation rate. The PAC chair insists there is no pressure, but admits employees feel differently..........
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  • PAC gifts are taken straight from their paychecks.

    Wed, September 9, 2009 - 1:26 PM
    This isn't that unusual, I've worked for companies that would use newsletters or emails to urge employees to join and donate to their PAC, ... Exerting strong pressure on their employees to speak out against reform. ...

    Outback Steakhouse sways politicians with money straight from its workers, whose gifts are taken straight from their paychecks.

      In New Ethics Climate, a Concern On How the Fund-Raisers Operate
      By RICHARD L. BERKE, Special to The New York Times
      Published: Monday, June 12, 1989

      As members of Congress solicit more and more money from political action committees, PAC's are responding by seizing on new techniques to increase receipts, from putting pressure on potential donors to offering them free trips or cars.

      They need more money because PAC contributions to incumbents, which totaled less than $20 million a decade ago, reached $115.3 million in the 1987-88 election cycle - or 40 percent of all the money that incumbents raised. For sums like that, the traditional appeals that dealt with policy and ideology have proved insufficient.

      Critics of PAC's have long complained that the committees wield too much influence on lawmakers. Their arguments are now being heard on Capitol Hill, where there is a heightened interest in tightening ethics rules and campaign finance laws. Last week the White House also weighed in on the issue, with aides saying President Bush would propose the abolishing of corporate and union PAC's.

      In this new atmosphere, another area that is bound to face scrutiny is how the PAC's operate and whether potential contributors feel free to say no.

      ''The current campaign finance system pressures PAC's into raising money and they, in turn, put pressure on potential donors,'' said William J. Baer, chairman of Lobbyists and Lawyers for Campaign Finance Reform and also a director of a PAC sponsored by the Arnold & Porter law firm here. ''The way the system is structured creates real potential for abuse. PAC giving is supposed to be voluntary.''

      The new techniques used by PAC's to raise money appear to be working. Receipts to the Phillips Petroleum Company's PAC soared last year after donors were automatically entered into a ''holiday bonanza'' contest, with winners receiving expense-paid trips to Washington. The Mechanical Contractors Association of America saw its PAC's coffers swell when contributors could have a chance to win a new Cadillac for a $195 donation. Free Trips to Washington

      Donations to the political action committee for Barnett Banks' 34 banks in Florida and Georgia are voluntary. But employees are spurred on by the bank presidents who serve as ''team captains.'' Captains who encourage 90 percent of their senior staff to sign up are rewarded with free trips to Washington and other perks.

      Marty Farmer, who heads the Barnett Banks political action committee, said 96 percent of the company's 6,000 senior executives regularly contribute to the PAC.

      ''When you hear a number like that the general imagery must be, 'They're breaking bones in the alley,' '' Mr. Farmer said, adding that Barnett People for Better Government, as the PAC is called, owes its success not to strong-arm tactics, but to elaborate solicitation drives.

      Federal election laws strictly forbid PAC's from extracting contributions ''by physical force, job discrimination, financial reprisals'' and other tactics. And only executive or high-level administrative personnel can be routinely solicited. Pressure Unavoidable, Some Say

      Yet some fund-raising experts say pressure is unavoidable in many corporations and labor groups, which have come to expect senior employees to contribute. The pressure is sometimes so subtle that it is impossible to prove, although some PAC officials have been prosecuted for demanding contributions.

      In the most recent case, two top officials of the failed Commodore Savings Association in Dallas were convicted in Federal court last month of conspiring to make illegal campaign contributions by requiring employees to contribute to the thrift's PAC and then reimbursing them.

      Gwynne Autry, who was a vice president of Commodore, told the jury how the chairman, E. Morten Hopkins, made it clear that Ms. Autry had no choice but to contribute.

      ''When I asked about a PAC, I said, 'What does it do?' '' Ms. Autry recalled.

      ''And he said, 'Well, it's for campaigns.' ''And I said, 'Who do they donate to?' ''He said, 'Phil Gramm, Jim Mattox.' ''And I said, 'I don't like Jim Mattox.'

      ''And he said, ''Do you like your job?' '' 'Dedication to the Company'

      In a well-publicized case three years ago, Robert D. Wright, the president of NBC, sought to establish a political action committee and wrote in a memorandum to company officials that ''employees who elect not to participate in a giving program of this type should question their own dedication to the company and their expectations.''

      The idea was shelved after the memorandum was leaked to the news media, generating adverse publicity for the network.

      Most political committees are not as overt. But some PAC directors admit privately that pressure, whether from peers or superiors, is the most effective way to raise money.

      ''If you have a participation level of 85 percent or more,'' said the head of a banking PAC in Chicago, who spoke on condition of anonymity, ''you either have a lot of enthusiastic people or a hell of a lot of bent arms.'' 'Edged on Coercion'

      In a speech on solicitation techniques at a conference of corporate PAC directors before last year's Congressional elections, an official of a telecommunications PAC conceded that her technique ''edged on coercion.''

      The official, who asked not to be named as a condition of allowing a reporter to attend the session, explained that she would call meetings of company officials and ask them to sign pledge cards to make contributions to the PAC. She would demand that they immediately return the cards so they would feel added pressure to pledge on the spot.

      At the Professional Insurance Agents PAC, another tactic has proved successful. Potential donors are mailed a letter from the committee along with a ''membership statement'' that looks like an invoice but is actually a solicitation. When they were first mailed, an official of the PAC said, secretaries whose bosses received the statements would routinely write a check, thinking it was a bill.

      ''We have found this to be very successful,'' said the official, who also asked not to be named. Deductions from Paychecks

      Many PAC's affiliated with corporations or labor unions do not have to mail out solicitations because the donations are deducted from employees' paychecks. All the employees must do is agree in writing to the deduction and the money is diverted to the PAC, usually indefinitely, unless they change their minds.

      Peter Kennerdell, an official of the Public Affairs Council, a professional organization that advises corporate PAC's, defended the committees' techniques, saying they were careful not to pressure employees. Most senior executives, he said, do not look at tallies of which employees made contributions.

      But, Mr. Kennerdell said: ''If you had to boil the PAC solicitation process down to one single element, it is senior management support. What makes all the difference is a nice powerful message from senior officers.'' 'Good for Their Careers'

      Senior executives are indeed the centerpiece of the medium-sized PAC sponsored by Barnett Banks, which is based in Jacksonville, Fla. In the 1988 campaign, the PAC donated $191,700 to Democratic candidates and $184,000 to Republican contenders around the country.

      The donations are voluntary, and the PAC's guidelines instruct executives soliciting donations to ''use care to avoid any action that may be interpreted as threatening job stability.''

      In addition to being rewarded with an annual trip to Washington to mingle with lawmakers, the Barnett PAC's most successful fund-raisers, or captains, at one time received $100 bonuses. But the practice was discontinued as a cost-saving measure. Senior executives are asked to contribute at least 0.5 percent of their salaries to the committee.

      ''The captains perceive that to be involved in the political action committee of Barnett is good for their careers,'' said Mr. Farmer, executive director of government relations for Barnett. ''It's part of the culture. It's ingrained. We're actually sort of proud of it.''

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