While companies can’t donate large amounts of money to candidates in many states, they can donate unlimited sums to governors associations. Therefore, “in October 2014, the Republican Governors Association needed help in Maryland, where the gubernatorial race was tight. So it called Mountaire, Corp., one of America’s largest suppliers of chicken products,” according to The Wall Street Journal. In exchange for help on impending environmental regulations in Maryland, Mountaire agreed to donate $500,000 for an ad campaign for then-candidate Larry Hogan. When he was inaugurated, Governor Hogan “blocked the proposal opposed by the poultry industry.”
Companies have found a campaign finance loophole because now they can donate an unlimited amount to a Governors association by merely claiming they have an interest in the matter. Both the Democratic Governors Association (DGA) and the Republican Governors Association (RGA) have “tallys” to help keep tabs on how much money a particular governor brings to the association to then allocate the money in the future.
Why are companies donating to the RGA or DGA instead of to a super PAC or another outside group that supports candidates? Those donations to super PACs and other organizations, which are also not limited, are usually disclosed. However, if a company donates to the RGA or DGA, the money is labeled as coming from the RGA/DGA when it gets to the candidate. Multiple “former RGA and DGA officials described the practice of guiding donations as an open secret.”
The RGA claims that a Florida power company “didn’t give to the RGA to ‘circumvent’ Florida state limits on contributions or to ‘support Gov. Scott’…as RGA does not earmark any contributions for any race or candidate.” This could mean a number of things for campaign finance and the transparency of the current system.