Unpacking political action committees: Why are transportation PACs important?

Date: Friday, November 27, 2020
Source: Freight Waves

When a person thinks of companies contributing to political campaigns, he or she might think that company has open-door access to a politician because money talks.

What do the managers of political action committees (PACs) say? Their answer is that while companies’ financial contributions serve as a way for companies to engage in the political process, the companies — and the trade associations that represent them — don’t have unfettered access to the politician’s inner circle.

“There’s going to be a perspective that you pay money and you have an entitlement. It doesn’t work that way,” said Tom Lynch, vice president of congressional affairs for the American Short Line and Regional Railroad Association (ASLRRA). Lynch oversees ASLRRA’s PAC. “I’m sure a lot of people wish it would. … But by the same token, campaigns cost a lot of money, and if you wish to exercise your constitutional right in accordance with the notion that there will be differing points of view … then this is the means to try to support and enable them to be competitive.”

According to the Center for Responsive Politics, a PAC is a group with the purpose of raising and spending money to elect and defeat political candidates. The group typically reflects a business interest, labor or ideological interests. PACs can contribute up to $5,000 per candidate per election. They may also give up to $15,000 annually to a national party committee.

PACs first appeared about 1944, when the group Congress of Industrial Organizations sought to reelect President Franklin D. Roosevelt, according to the center. The nonprofit center runs the website opensecrets.org, which tracks campaign contributions to federal political campaigns.

Many business interests operate PACs — including transportation. Indeed, contributions from the transportation sector overall neared $110 million in 2020. That total includes contributions from individual companies, PACs and “soft” money or outside donations. Of that total, $23.7 million came from transportation PACs representing automotive, rail, air and sea-related modes.

Transportation PACs weren’t the highest givers during the 2019-20 election cycle. Ideological and single-issue PACs gave $81.4 million, while finance, insurance and real estate PACs gave $76.1 million. Transportation PACs were the 11th-highest category among all PACs contributing to elections in 2019-20, according to the center.

And within the transportation sector, air transportation PACs were the highest contributors, giving nearly $9.3 million to Republican and Democratic candidates in 2019-20.

How transportation PACs benefit the industries they serve

Transportation and corporate PACs exist to enable entities to have a political voice, according to Will Sehestedt, FreightWaves’ vice president of association and university development.

“Associations might represent and collect money from hundreds or thousands of businesses and individuals in a particular industry or mode. They can leverage PAC donations to represent their membership’s collective self-interest on critical issues,” Sehestedt said.

Sehestedt previously worked for the Transportation Intermediaries Association (TIA), where he was involved in PAC fundraising.

“Similarly, corporate PACs for some larger companies offer individual donors at those companies the ability to support advocacy on issues that are important to their everyday jobs and ensure their employer is heard on Capitol Hill,” Sehestedt said.

PACs cite several reasons for why they support candidates. One is to cultivate a relationship with an incumbent.

A PAC is “one of the critical tools that we have available to us to really build relationships with members of Congress,” said Chris Burroughs, vice president of government affairs for TIA, a group representing third-party logistics companies. Burroughs is in charge of TIA’s PAC.

That relationship means helping a political candidate understand what issues are important to your industry and what value your trade association members bring to the economy, Burroughs said.

PACs also serve as a practical function for political candidates, according to Burroughs. Political campaigns are expensive, and politicians actually often don’t like having to raise money.

While some PACs, such as those representing special interests, might lean heavily toward one political party, transportation PACs tend to be bipartisan, with the ratio of Republican-to-Democrat contributions influenced somewhat by who’s in power in Congress and in the White House.

Indeed, transportation PACs gave 59% of their 2019-20 contributions to Republican candidates and 41% to Democratic candidates.

Political gridlock is one of the reasons why transportation PACs give to both Republicans and Democrats.

“We’re equal opportunity. We’re bipartisan. We have friends on both sides of the aisle and we like our friends. And we want to support those interests that help us help our membership,” Lynch said.

But transportation PACs might also give to candidates who might otherwise take an outwardly antagonistic role toward the industry, such as the freight railroads’ support of campaigns of Democratic leaders sitting on the U.S. House Committee for Transportation and Infrastructure.

“Donations to members on both sides of the aisle can reduce opposition on some issues and may encourage outright cooperation on others,” Sehestedt said. “Especially because incumbents tend to be reelected, building and maintaining diverse relationships as legislators gain experience and influence can have long-term impact on advocacy efforts.”

One benefit of transportation PACs is that they seek to represent their membership — not just the large companies but also the smaller companies that might not have the ability to otherwise donate thousands to a political campaign, according to Lynch.

“It’s not just pursuing common interests, but it’s making a conscious effort … to support the trade association’s common interests,” Lynch said.

While the perception that money talks has a ring of truth to it, the reality is that political campaigns are costly and the roles that PACs play in the election of their preferred candidates is valuable, said Burroughs and Lynch.

“If you keep money out of politics, only very rich people could run. … You could instead perceive it as the candidate who is sensitive to a broader range of interests and has communication with a broader range of stakeholders is more representative,” Lynch said.

He continued, “A railroad can’t vote. Train tracks can’t vote. So in order to have some ability to participate in the process, in the system, this is the means of doing so, especially as others are doing as well and you don’t want to get lost.”


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