With Democrats running both Houses of Congress, the normally Republican-leaning political fundraisers for the accounting profession are starting to tilt to the left.A new Accounting Today analysis of campaign contributions to congressional candidates by the industry's political action committee fundraising groups confirmed a distinct shift toward Democrats amid the 2008 primary election season.
Although Republicans seeking House and Senate seats in this year's elections received more support from PACs organized by major accounting firms and the American Institute of CPAs than did Democrats, the GOP's edge among the profession's political fundraisers has narrowed considerably.
An earlier Accounting Today analysis of PAC contributions to federal candidates on the eve of the 2006 mid-term elections found that Republicans receiving financial support from "Big Accounting" outnumbered Democrats by two to one, and that GOP hopefuls were on the receiving end of 72 percent of the industry's total campaign dollar contributions.
The new analysis of PAC activity reported to the U.S. Federal Election Commission found that as of December 2007, only 58 percent of the 2008 candidates supported by the accounting industry were Republicans, and that 41 percent of the dollars contributed to congressional candidates went to Democrats.
Those reports reveal that PACs organized by accountants had raised more than $4.1 million for the 2008 federal elections during the past year alone. Those PACs -- operated by Deloitte & Touche, PricewaterhouseCoopers, Ernst & Young, KPMG, Grant Thornton, the National Society of Accountants and the AICPA -- had already contributed nearly $1.8 million to congressional candidates before the first votes were cast in this year's caucuses and primary elections.
But with a seven-figure war chest left unspent from 2006, accounting PACs still had a combined $3.3 million more on hand to spread around at the start of this year's primary season.
Although the presidential election is grabbing the most media attention, accounting PACs have earmarked the lion's share of their donations for congressional candidates. During 2007, only three presidential hopefuls received contributions from the industry's fundraisers: Republican Rudy Giuliani collected $5,000 from Grant Thornton, plus $10,000 from KPMG, while Democrats Sen. Chris Dodd of Connecticut and Sen. Hillary Clinton of New York accepted $10,000 and $2,500 respectively, from PwC's PAC. Dodd has since dropped out of the race.
At press time, here was the current status of the accounting PACs:
* The AICPA's PAC had already raised more than $300,000 for the 2008 elections by the end of 2007, and had paid out almost $350,000 in contributions to House and Senate hopefuls. Six out of 10 candidates supported by the institute were Republicans, and 61 percent of the funds donated by the AICPA went to GOPers.
* Deloitte & Touche's PAC, the industry's most active fundraiser during the last election, raised more than $1 million for federal candidates during the last year. The PAC has contributed at least $364,000 to 82 Republicans and 56 Democrats so far in the 2008 campaign. To date, 62 percent of Deloitte's donations have gone to Republicans.
* Ernst & Young's PAC raised a total of more than $764,000 last year. By the end of 2007, E&Y's PAC had contributed nearly $380,000 to 60 Democratic congressional candidates and 68 Republicans. Democrats have received nearly half (48 percent) of the PAC's dollar contributions during the current election cycle.
* KPMG's PAC collected more than $740,000 for this fall's elections, and has so far paid out almost $260,000 to 38 Democrats and 62 GOP candidates. Unlike other accounting PACs, which have spread their contributions more evenly for the 2008 elections, KPMG's fundraisers have earmarked nearly two thirds of their contributions for Republicans.
* PricewaterhouseCoopers' PAC has collected over $1 million since the last election, and has made contributions to candidates totaling nearly $400,000 so far. Nearly 57 percent of the candidates supported by PwC were Republicans, and GOP hopefuls pocketed 60 percent of the PAC's dollar contributions.
* Grant Thornton's PAC raised more than $107,000 for federal candidates since 2006, and has made donations to 20 Republicans and 13 Democrats in the 2008 House and Senate races. Of the $33,000 contributed to candidates by GT last year, 61 percent went to Republicans.
* The National Society of Accountant's PAC collected over $18,000 for the 2008 campaign, and has so far contributed $6,000 to two candidates, both of them Democrats.
Siding With Incumbents
House and Senate candidates seeking support from the accounting profession are likely to find a receptive ear if they’re already a member of Congress and hold a seat on a key committee responsible for legislation affecting tax laws or the regulation of financial services.
Accounting Today’s new analysis of political action committee contributions to candidates found that since the 2006 elections, the major CPA firms and industry association made donations to help the campaigns of more than 150 House and Senate candidates.
Significantly, however, the overwhelming majority of those contributions went to incumbents, and the juiciest donations were earmarked for congressional leaders or those serving on House and Senate Committees dealing with issues of concern to the industry.
Accounting Today’s exclusive analysis, which reflects PAC donations reported to the FEC through December 2007, revealed the following roster of the profession’s 10 favorite candidates in this year’s congressional elections:
* Sen. Richard Shelby, R-Ala. — $33,000. The ranking Republican member of the Senate Banking Committee, Alabama’s senior senator is in a position to influence a variety of legislation of concern to accountants. Shelby is also the lead sponsor of pending legislation to replace the Internal Revenue Code with a flat tax and to create a balanced budget constitutional amendment.
* Sen. Susan Collins, R-Maine — $31,000. Collins is the top-ranked GOP member of the Senate Committee on Homeland Security and Government Affairs. She is the sponsor of a variety of tax-related legislative proposals, including bills to address the Alternative Minimum Tax issue.
* Rep. Peter Roskam, R-Ill. — $30,859. Roskam has a seat on the House Financial Services Committee and also serves on the subcommittees for capital markets, insurance, and international monetary policy. Regarded as one of the party’s “rising stars,” Roskam has argued against tax increases and Tax Code complexity.
* Sen. Max Baucus, D-Mont. — $28,766. When the Democrats captured control of Congress, the veteran Montana Democrat moved up to chair the Senate Finance Committee — the panel that writes the Tax Code and many of the rules governing CPAs. He is the sponsor of a number of pending bills supported by the profession, including legislation to repeal the AMT.
* Sen. Elizabeth Dole, R-N.C. — $28,000. Dole serves on the Senate Banking Committee, as well as that panel’s subcommittees on financial institutions and international trade and finance. She is the sponsor of a number of tax-related bills now pending.
* Sen. Harry Reid, D-Nev. — $27,500. The Senate majority leader, along with House Speaker Nancy Pelosi of California, is one of the two most influential Democrats in Washington. He is also a vocal supporter of Internal Revenue Service reform, as well as a long-time advocate of legislation to crack down on corporate tax shelters.
* Rep. Deborah Pryce, R-Ohio — $27,000. A key member of the House Financial Services Committee and one of the House Republican deputy whips, Pryce has represented Ohio’s 15th Congressional District since 1993.
* Rep. Spencer Bachus, R-Ala. — $27,000. The top-ranking Republican on the House Financial Services Committee, Bachus is in a position to influence a variety of proposals concerning the accounting profession. He is the sponsor of pending legislation to reform mortgage lending practices and to amend the Securities and Exchange Act.
* Rep. Roy Blunt, R-Mo. — $24,750. The House Republican whip played a key role in the passage of the president’s $1.35 trillion tax cut, and is the chief sponsor of legislation to sweeten existing tax incentives for charitable contributions.
* Rep. John Tanner, D-Tenn. — $21,999. Tanner is an influential member of the House Ways and Means Committee and the chief deputy whip for the House Democratic Caucus. He is also the chief sponsor of pending legislation to amend the Internal Revenue Code to extend the look-through treatment of payments between related controlled foreign corporations.
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