Why Contribute to a Political Action Committee?

As defined by Merriam-Webster: A Political Action Committee or PAC is a group formed (as by an industry or an issue-oriented organization) to raise and contribute money to the campaigns of candidates likely to advance the group's interests.

Being a business owner of a small or medium size company, how can you gain access to those who sometimes determine the fate of your business?  Calling on PAC funds at the appropriate time provides a path to meet directly with representatives who, even though they may or may not understand your industry, could close your business or dramatically disrupt the market with a simple “aye or nay” from their lips on the House or Senate floor.   So why should you play the D.C. game? And let’s be clear. It is a “game” – a zero-sum game! Someone will win and someone will lose. Why not increase your odds by playing by the Washington D.C. rules to advance your agenda?

Contributing to this access gives you the opportunity to discuss industry issues with those who receive your support.  Laying out the industry’s top concerns by simply explaining how a certain regulation could (or does) impact your employees and customers helps the representative better understand potential laws being introduced. 

PACs are Only Funded by Special Interest

I speak all over the country on the topic of legislative issues specifically related to IRC 1031 like-kind exchanges.  When I reference our industry’s PAC, at times, I receive considerable resistance. I simply ask doubters, how do you think our industry is able to pierce disinterested first-level staffers or grab enough attention by the decision makers to ensure our concerns are at least considered?  Would you prefer to leave it to the uninformed representatives to determine the fate of your industry or your job?  Simply put, PACs contributors are interested in having the opportunity to state their case, support their cause, and yes, express their special interest.  If you don’t like the game, that’s OK.  But just don’t be upset if you lose.

Representatives simply don’t have the time to read, much less understand the consequences of any one bill.  That is where strategically utilizing PAC funds is a very powerful avenue to grab a representative’s attention.  It's one way to ensure representatives hear industry concerns. Once an industry's PAC chooses to allocate funds to a certain Senator or Congressman, they have an opportunity to ensure key points are communicated.

PAC Fund Restrictions

Political Action Committees have some very specific rules that must be followed so that both you and your selected candidate don’t get entangled in the laws that surround the management of PAC monies.

• Only individual employees or connected associates can contribute to a PAC. Funds directly from the company are not allowed.
• Permission must first be given from an employer prior to the PAC soliciting monies from employees.
• Maximum contribution levels need to be monitored.

So, the next time you are approached about contributing to a PAC.  Ask yourself does this PAC represent my interest?  Are those in charge of the PAC able to express the concerns that best represent your interest?  Is the PAC targeting the right representatives?  As with so much in politics, it is easy to look the other way and simply rely on the ongoing inability of Congress to move anything forward.  But, eventually a bill or just a small sentence buried deep within a bill could severely impact an entire industry.  As I have said before, “If you are not at the table, then you are most likely on the menu."  So consider if your PAC can get a chair at the table.  And if so, then do your part to support the seat.

Learn more on the official 1031 PAC website.