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CPA Releases Primer on Corporate Political Spending

Center for Political Accountability, Corporate Political Spending: What It Includes, How It Is Defined, March 14, 2007: “The Bipartisan Campaign Reform Act (BCRA) of 2002 was enacted, in part, to staunch the flow of corporate money into the political process. It prohibited unlimited (or soft money) contributions to national political parties and to committees controlled by federal officeholders. However, BCRA did not stop the flow of corporate money—it only changed the channels through which this money moves. Today corporations remain free to contribute soft money to non-connected political committees, popularly referred to as 527s, to state and local candidates and to political committees, including party committees, at the state level. Corporations are also free to use trade associations and other tax exempt entities as vehicles for corporate political involvement. As corporate political money routes continue to proliferate, the need for greater transparency and accountability on the part of the corporations increases. Companies have a responsibility to shareholders to ensure that corporate funds are being used in ways that advance the long-term interests of the company and enhance shareholder value. Boards of directors have a fiduciary responsibility to evaluate the risks involved with political spending and ensure that management’s political expenditures align with shareholder interests. Finally, shareholders have a right to know how their money is being used politically and to hold the company accountable for its political activities.”

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