A new post-election analysis of political fundraising activity by PACs sponsored by the American Institute of CPAs and several of its largest member firms suggests that the profession may have missed the opportunity to ride the wave that propelled Republicans to victory in 2010, by supporting incumbents, both Democrat and Republican, who were turfed out, and largely ignoring the Tea Party candidates who were the engine of the GOP's congressional landslide.
During the previous mid-term elections in 2006, accounting PACs supported Republicans over Democrats by a better than two-to-one margin and channeled more than 70 percent of their total contributions to GOP candidates. This year, while Republicans were posting strong gains at the polls, those same PACs adopted a more balanced approach by donating less than 55 percent of their campaign contributions to Republicans.
Accounting's continuing shift away from the GOP was even more pronounced in House races, where industry PACs funneled 80 percent of the $5 million that they contributed directly to congressional candidates. In House contests, Democrats pulled in 47 percent of industry contributions, while Republicans pocketed 53 percent. The majority of contributions went to incumbents, a number of whom were defeated by Tea Party candidates and other insurgent Republicans.
A DIFFERENT STRATEGY
There is a school of thought that supports the strategy employed by the profession's PACs, arguing that current ceilings on PAC campaign contributions - generally $10,000 per candidate per election cycle - are too low to enable any one PAC, or any one industry, to give substantial assistance to a candidate.
Instead, PACs spread donations around to leaders from both parties, and to members of key committees, in hopes of currying favor and providing their lobbyists with "access."
From that standpoint, an argument can be made that PAC men for accounting did get their money's worth in this year's election. In an election where the GOP made a big splash at the polls, most of the candidates supported by accounting PACs were Republicans, and Republicans received the majority of the industry's campaign contributions.
Moreover, despite some high-profile defeats, the overwhelming majority of candidates backed by accounting PACs went on to win. And the profession's PACs did make substantial contributions to those representatives who figure to be in particularly influential positions in the next Congress.
A CLOSER BIPARTISAN BALANCE
Indeed, Accounting Today's analysis of Federal Election Commission records for the 2010 elections found that the top 10 recipients of PAC support from the industry include: Rep. John Boehner, R-Ohio, in line to become Speaker of the House in January; Rep. Spencer Bachus, R-Ala., the ranking minority member of the House Financial Services Committee and an early favorite to become chairman of that panel; House Majority Leader Steny Hoyer, D-Md., the top lieutenant to House Speaker Nancy Pelosi and a continuing force in the Democratic Party; and Rep. Eric Cantor, R-Va., the current House minority whip who many predict may move up to majority leader in the 112th Congress.
As for the bipartisan political balance that accounting PACs displayed in this year's election, some observers consider it typical of the current direction of political fundraising organizations. A new post-election analysis by the Center for Responsive Politics found that PACs sponsored by many of the nation's largest businesses and industry associations are no longer solidly Republican, but are now splitting their support more evenly.
Here's how the accounting profession's PACs performed during the 2010 election cycle:
The American Institute of CPAs: The institute's PAC raised nearly $1 million, and spent every cent of that and more. Most of its contributions went directly to individual candidates (nearly $580,000), with the rest given to other PACs and related fundraising organizations. Republican candidates received 54 percent of the institute's donations - a significant drop from 70 percent in the 2006 mid-term elections.
PricewaterhouseCoopers: The profession's top-spending PAC this year, PwC's political fundraising arm assembled a war chest of over $2.5 million. Nearly $1.4 million was doled out directly to candidates, with Republicans receiving 53 percent, with 46 percent for Democrats, against a lopsided 70-to-29 percent margin in 2006.
Deloitte: This PAC spent almost $2.5 million in 2010, and gave more than $1.3 million directly to House and Senate candidates. During the previous mid-term election, Deloitte's PAC contributed almost three times as much to Republicans as to Democrats. This year Democrats collected 43 percent, versus 56 percent for GOP candidates.
Ernst & Young: The E&Y PAC raised almost $2 million during the 2010 cycle, but with less than three weeks to go before the November elections, the group had donated less than $700,000 directly to congressional candidates. The money was split 56 percent for Republicans and 43 percent for Democrats, versus 61 to 38 percent in 2006.
KPMG: This PAC paid out nearly $1.7 million for the 2010 elections, and has contributed over $900,000 of that to House and Senate candidates. Republicans received 55 percent of that total, while Democrats got 44 percent. In 2006, the GOP enjoyed a 71-to-28 percent margin.
Grant Thornton: GT spent more than $213,000 during 2010, and contributed $125,000 to federal candidates. Republicans received the most (56 to 44 percent), but the margin is down from the last mid-terms, when GOP candidates collected 61 percent, against 38 percent for Democrats.
The National Society of Accountants: The society's small PAC raised almost $50,000 during the 2010 cycle and donated $13,500 to House candidates - all of it going to Democrats. Senate Finance Committee ranking Republican Chuck Grassley received its only Senate donation, $1,000. During the 2006 campaign, the NSA favored Republican candidates by a 70-to-30 percent margin.
Capitol Hill Reshuffle
Last month's elections scrambled the leadership roster on several committees that will determine the fate of the accounting profession's legislative priorities for the next two years.
By taking control of the House of Representatives, the Republicans won the chair of the tax-writing Ways & Means Committee. The panel's ranking Republican, David Camp of Michigan, is in line to take control. Camp, a fiscal conservative who attracted more than $36,000 in campaign support from accounting PACs, figures to be more accepting of the profession's tax recommendations.
The GOP also won control of the House Financial Services Committee.The top-ranking Republican on the Financial Services Committee, Spencer Bachus of Alabama, appears likely to chair that panel for the next two years. Bachus received more campaign donations from the accounting profession during this year's election ($57,000) than any other candidate.
Another of the accounting profession's favorites, Rep. Jeb Hensarling, R-Texas, is in line to assume the chairmanship of the Financial Services Subcommittee on Financial Institutions and Consumer Credit. Hensarling received more than $37,000 in contributions from accounting PACs in 2010.
This year's elections will have less of an impact on Senate committee assignments and leadership slots - though on the Finance Committee, one key Democrat supported heavily by accounting PACs - Arkansas' Blanche Lincoln - was defeated in her re-election bid. - Ken Rankin
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