Book 8

Election information is out of date and should not be relied upon. WHAT A BUSINESS FIRM CAN DO IN POLITICS Encouraging Political Participation Company Policy Programs to Promote Activity by Individuals Sponsoring Educational Courses in Politics; Registration and Get-Out-the-Vote Campaigns; Fund Raising; Discussion Meetings; Visits with Candidates Politics and the Job Evaluation; Leave Policies; Recognition; Example Setting; Assigning Responsibility Issue Analysis and Discussion Effective Programs Sound Government Program of Johnson and Johnson; Gulf Oil Corporation; American Can Company; Letters to Employees; Employee Publications; Economic Discussion Groups WHAT LOCAL CHAMBERS CAN DO Get-Out-the-Vote Drives; Research Activities; Information about Candidates; Information on Issues; Communications with Members of Congress WHAT STATE CHAMBERS CAN DO Ohio Chamber's Program; Voters Information Program; Indiana Citizenship Participation Program; Missouri State Chamber Program; Getting Good Candidates; Party Platforms WHAT ASSOCIATIONS CAN DO Practical Politics Programs; Sample Program LEGAL AND TAX CONSIDERATIONS THE LAWS History; Taft-Hartley Provisions; Use of Staff Personnel; Paid Advertising; What Corporations May Lawfully Do; Other Federal Laws; State Laws; Tax Considerations Introduction This course in practical politics has emphasized that oursystem of government functions most effectively and in thebest general interest of everyone when all individuals and allgroups-including labor, farmers, business, professional and many others-play an active role in the political process.There are more than 4,000,000 individual businessfirms in the United States, ranging from the "Mom-and-Pop"corner store to the large corporation. The interests of these firms range from the most specialized to the broadest possibleeconomic issues. Broadly, business is represented by organizations likethose that represent: 1. All business, such as the Chamber of Commerce ofthe United States and state chambers of commerce. 2. A particular line of business: national associations,such as the National Retail Merchants Association;and regional or state associations like the Pennsylvania Realtors Association; and local associations.There are about 1,700 national and 10,500 local andregional associations. 3. All business in a local, specified, geographic area, suchas a local chamber of commerce, sometimes called a Board of Trade, an Association of Commerce, or some similar name. There are about 4,000 localchambers. Some businessmen are reluctant to participate in politicsin any way. Others feel they have satisfied their responsibilitiesif they vote and help organize get-out-the-vote" and "contribute-to-the-party-of-your-choice" campaigns. Do such efforts indicate business is making its mosteffective contribution politically? Or can business do muchmore? What part can business organizations play in helpingmore businessmen become more effective in politics?Part of the answer to those questions is in this pamphlet, in the review of some of the things business firms, chambersof commerce and associations can do and are doing to meettheir political responsibilities. What a Business Firm Can Do in Politics Experience shows that political action programs are similarto other company programs in one major respect-not muchgets done until top management recognizes the importance ofthe program and gives concrete evidence of support. Top management's attitude, then, can be a controlling factorin determining how many employees participate in practical grassroots politics and how effective they become. Top management can help promote political participation bycreating a favorable climate for it-by making it part of themanagement program, assigning responsibility to a top staffperson, and utilizing communications media, such as letters,bulletin boards and employee publications, to sell the importance of political participation. Basically, a company's political program can be divided intotwo major areas: 1. Encouraging political participation. 2. Providing educational material on both issues andcandidates. ENCOURAGING POLITICAL PARTICIPATION A wide variety of approaches can be used to encourage political participation. Company policy can be formulated and education provided in grass-roots politics. Programs can be instituted to encourage registration and voting, and to stimulate contributions to political parties. Employees can be urged to work in behalf of their political parties and given appropriate recognition for political achievements. COMPANY POLICY Company policy approving political activity will encourage more employees to become active in politics. In small organizations, company policy on political activity can be informally outlined, and perhaps communicated orally. In large companies, it is more appropriate to have a formal policy, in writing, that can be communicated to employees through normal channels, such as letters, bulletin boards, and employee publications-particularly before elections when political interest is high. A policy can be a simple statement that the company encourages its management employees to be active in politics as a matter of good citizenship. Or it can go much further in spelling out the need for political activity. It can explain why employees should take part in practical politics and why they should work for-and make financial contributions to-the party of their choice. BUSINESS LEADERS URGE POLITICAL ACTIVITY A growing awareness of the importance of politics to businessmen is reflected in these headlines. For example, Henry Ford II, president of the Ford Motor Company, in a letter to "Members of Management" in June, 1956, said: ". . . the stake we have in self-government is too great for any of us to assume the role of passive bystander. If we believe in a party and its nominee, then we should support that party and that man to the limit of our ability. "The Republican and Democratic parties alike need help in pre senting their views to the public at large. They must have willing and interested workers who can devote time and effort to the job of encouraging millions of Americans to exercise their voting franchise. Both parties must raise money to cover the high costs of campaigning on radio, television and in various forms of advertising. "I urge all employes of Ford Motor Company to serve themselves and their nation in the next few months by devoting at least a portion of their available time to the interests of the party of their choice. I also urge you to contribute money to your party in whatever amount your means will permit. The actual size of your contribution is far less important than your willingness to make known where you stand, politically. . . ." For legal reasons, if no other, the difference between partisan and nonpartisan activity is important in formulating policy. The General Electric Company has spelled out the difference between nonpartisan political activity to improve government and the business climate generally, and partisan political activity in behalf of one party or specific candidates. General Electric policy makes non-partisan political activity that is designed to increase public understanding of significant social and economic problems "a proper business duty of managers and other duly appointed company representatives on company time and at company expense." Partisan political activity, however, falls in a different category. General Electric says: "There is, however, still an additional partisan political activity which responsible citizens should feel the need to carry on in connection with the party of their choice even in the periods between elections. "This need is for the responsible citizen-to the extent of his interest-to work within whichever is his party choice to help have the party's present office holders act more constructively in the true public interest, and to help the party offer better platforms and better candidates for the next election. "This includes devoting personal time and personal funds to the proper uses of the party of his choice, whichever party that may be "General Electric has neither the opportunity nor the desire to pressure any employee into political activity against his will or even beyond his natural or acquired interest. But the company does encourage all its employees to participate in both the partisan and nonpartisan kind of political activity to the extent of their interest. "Whereas it is appropriate for a manager or other duly appointed company representative to engage in such nonpartisan political work on company time and at company expense to a reasonable degree where the interests of the company are involved directly or indirectly, the partisan political activity in election campaigns and other interim partisan party work is a personal responsibility which must be carried out as a citizen on the manager's or other employee's own time and at his own expense." To avoid any possibility of the company becoming involved in partisan political activity, managers are reminded that there are laws against company contributions or other expenditures in connection with elections to political office, and that no employee may make, authorize or approve the contribution or expenditure of company funds for that purpose. The Advisory Council of GE established the following rules in regard to solicitations: (a) No employee shall solicit political contributions from any other employee who reports to him or from any other employee below his level in the Company organization. (b) No Company representative shall designate any Company employee as a solicitor for political contributions; employees who undertake to solicit contributions shall do so solely on a voluntary basis. (c) Employees who solicit political contributions from other employees shall do so under conditions which make it clear to the solicited employee that he is under no Company compulsion or pressures to make any contribution. (d) Employees who solicit political contributions must so conduct such activities as not to interfere with their work or their responsibilities to the Company, or to interfere with the work or responsibilities of other employees. (e) Employees who solicit political contributions shall not indicate or imply to any person that the solicitation is supported by the Company, nor shall General Electric stationery be employed in such activity. PROGRAMS TO PROMOTE ACTIVITY BY INDIVIDUALS In addition to adopting a clear policy in support of political activity by employees, companies can conduct a variety of programs that will stimulate individual employees to participate in partisan politics. These programs can be put under the direction of a top staff man-or in a special department such as a Civic Affairs Department-and can include activities such as the following: o Sponsoring educational programs in practical politics. o Handling registration and get-out-the-vote drives. o Conducting campaigns to encourage contributions to political parties and to encourage employees to work actively in their party. o Instituting programs of recognition for political achievements. o Arranging political discussion meetings, visits with candidates or plant visits by candidates. o Encouraging management to help stimulate political activity by setting worthwhile examples. Sponsoring Educational Courses in Politics Individual interest and effectiveness in politics is usually kindled by a better understanding of how the political system functions. Companies can do much to broaden participation and to upgrade individual sophistication in politics through political education programs. Company publications, letters and other communication channels have proved useful in providing education on issues and on economics, but do not lend themselves as well to teaching practical politics. As a result, various courses in political participation have been developed in recent years. This "Action Course in Practical Politics" is one example. Large companies may conduct their own courses for management personnel; smaller companies may wish to participate in a political education program that includes employees of several firms and is conducted by a local chamber or association. Registration and Get-Out-the-Vote Campaigns Many companies promote employee registration and voting through letters, bulletin boards, employee publications and other communications media. Any company-wide get-out-the-vote campaign, of course, achieves maximum value only if it emphasizes the importance of informed voting. This was emphasized in a letter sent to employees by John R. Tuttle, President of Crouse-Hinds Company, in Syracuse, N. Y.: "It is a privilege to live in a country with all the freedoms which we enjoy and millions of people in the world look at us with envy because we have that privilege. Like every privilege, this one carries a duty. That duty is to vote for the man or men of your choice. "I am appealing to you to think seriously about this privilege and its corresponding duty. Won't you talk with your family, your neighbors and your friends about registering and voting this year. . . . "At the same time encourage those to whom you talk to become informed about the men for whom they vote. This is the way to elect those who, in our opinion, will devote themselves to better government." The campaign for informed voting should direct special letters of encouragement to management personnel, who may be well qualified to speak up on important issues, and who may have frequent opportunities to suggest to others some practical benchmarks for evaluating campaign speeches and candidates. Management, office and clerical personnel may be overlooked in get-out-the-vote campaigns that concentrate on production workers. To avoid this, special projects such as these should be considered: o Set up a time-off-for-voting plan. Announce it well in advance. Make sure employees are reminded of it the day before election. o Discourage any unnecessary out-of-town travel on election day, or the scheduling of activities that will interfere with voting. o Make special arrangements to get absentee voters' ballots to employees who must be out of town on election day. o Plan special recognition for employees who have reached voting age since the last election. o Cooperate with (or urge action by) local business or civic groups to get 100 per cent voting by their members and families. o Use bulletin boards to emphasize the need for becoming well informed on issues and candidates before election day. One of a series of letters sent to employees of the Aluminum Company of America urging them to register. Aluminum Compony of America DON"T LET IT HAPPEN TO TO YOU Dear Fellow Alcoan: Why don't people register? There are several reasons, but a new one showed up the other day and it might affect you so I will mention it briefly. A business friend of mine told me he asked one of his staff employees if he was registered, and after some hesitation the employee replied that he was ashamed to admit that he never had registered despite the fact he is 44 years of age. He said that the reason he had failed to register was that he had the impression that registration required some kind of technical answers to a questionnaire and, also, some special knowledge about politics. He was told there is no questionnaire or any technicality Involved at all, and that all that is necessary is to supply information on a registration card as to name, address, identification, and party affiliation. It was further explained that he could change his mind later as to affiliation if he wanted to do so. DON'T LET IT HAPPEN TO TOU. Xou now have all this week including Saturday in which to register in Room 102, County Office Building, Downtown Pittsburgh, and the whole job does not take more than a few minutes. Alcoa considers itself a good citizen among other American concerns and, in turn, the Company likes to feel its employees assume their proper responsibility as good individual citizens by registering and voting. Cordially yours, M. M. Anderson Vice President in Charge of Industrial Relations and Personnel Fund Raising Combining an appeal for party contributions with the register-and-vote campaign is becoming increasingly popular. Mr. Ford, in the letter cited above, urged Ford Motor Company employees to "contribute money to your party in whatever amount your means will permit." General Electric tells its employees they have a personal responsibility as citizens to devote personal time and to give personal funds to their party. As one part of its three-part Good Citizenship campaign in 1958, the Aerojet-General Corporation conducted a drive among its employees in several cities for contributions to the Republican and Democratic parties and their candidates. It was reported that some 11,000 of the 15,000 employees contributed an average of $2 each, with larger amounts contributed by executives bringing the total to $25,000-about equally divided between the two parties and their candidates. Contributors were given "Good Citizen" stickers to place, like campaign ribbons, on their employee badges. They were also encouraged by memoranda, letters, and public address broadcasts-some of which were furnished by the American Heritage Foundation that was conducting a nationwide "Give-a-Buck" campaign, in cooperation with the Advertising Council, to promote broader public participation in political fund raising. The other two parts of Aerojet's pre-election Good Citizenship campaign were a drive to increase voter registration and a program of candidate appearances before employee audiences. The registration drive netted 2,000 new voters. Candidates of both parties for Governor and Congress appeared before the employees. Republican and Democratic volunteer committees were responsible for stimulating voter registration and mobilizing financial and other support for their parties or preferred candidates. Managerial, technical and clerical personnel, and union members were included on the committees. Discussion Meetings Meetings can be held to discuss political issues and, at election time, candidates. Such meetings should be nonpartisan. For example, a realty company in Georgia, with 25 employees, conducts a discussion of candidates at sales meetings prior to elections. Visits with Candidates Frequently management meets with candidates and officeholders. These meetings help develop interest in issues and in political personalities. They also indicate to the employee that the company encourages an active interest in politics. One company with plants across the country arranges for congressmen and senators from the areas where its plants are located to lunch with the management staff at the plant, followed by a plant tour. Staff personnel are briefed in advance on the legislator's views and on any issues in which the company may have a special interest. To avoid the appearance of applying "pressure" specific issues may not be discussed unless the legislator brings them up. The company has found such meetings useful in acquainting the legislator with the scope of the company's activities in his state or district, and the amount of business and jobs it contributes to the area. As a result, the legislator is in a better position to evaluate the impact of proposed legislation on the company's and community's welfare. The responsibility of individuals to contribute financially to the party of their choice is emphasized in this letter sent to employees by the president of the Toledo, Peoria & Western Railroad. TOLEDO, PEORIA & WESTERN RAlLROAD COMPANY EXECUTIVE OFFlCES - PEORIA, 1LLINOIS J. MISSEL COULTER, PRESIDENT PEORIA, ILLINOIS September 23, 1958 Dear Fellow Employees: Every two years, during national elections, you have noticed that there is a lot said in the papers and on Radio and TV about your responsibility to register and vote. All of us should take this seriously. There is another obligation we have that has not been mentioned quite so much - that is to support the party or candidate of our choice with a financial contribution. It takes money to win a campaign for public office. Abraham Lincoln's campaign for President 100 years ago cost about the same as a single national network broadcast in a modern political campaign. Costs of political campaigns are greater today than they were even a few years ago. These costs can no longer be met by the candidates and a few heavy individual contributions. It is necessary for both parties to solicit campaign funds on a broad base. As a company, we have no partisan political position, nor would it be proper for us to have one. This does not apply, however, to you as an individual working here. We hope that each of you not only feels free to participate in political affairs, but even considers it an obligation to do so. Your party or candidate preference is your own business. Your individual choice in this matter will be respected. But as a responsible citizen, you should carry your share of the cost of maintaining the two party system. Your contribution, as much as your vote, will improve your parry's chances of winning. We don't care which party you support, but you ought to support one of them. Please give this careful consideration. POLITICS AND THE JOB Companies can stimulate an interest in politics by policies on executive evaluation, leaves, and recognition awards. Evaluation Companies are involved in-and affected by-politics whether they want to be or not. Since executives must, therefore, deal with political factors, there is a growing feeling that knowledge, astuteness and participation in politics should be included in executive evaluation. Leave Policies Companies that encourage political activity should adopt policies that permit employees to take some time off without prejudice. Most political activity can be carried on after regular working hours, but an employee, for example, who is a member of a city council or a city or county political party executive committee may need time off occasionally to fulfill his official duties. A member of the State Legislature might be away from his desk for several months. Others may need time off periodically. Any company alert to the importance of political participation should adopt policies that will facilitate, rather than hinder, political activity. Recognition Special recognition for employees active in politics can be a helpful stimulant to political participation. Recognition can be given in several ways: Special luncheons. One company held a "Public Affairs Recognition Luncheon" for 15 employees who either were elected to public office or were candidates. Certificates or pins can be awarded at special ceremonies to employees in recognition of some achievement in politics. Publicity. Recognition can be given in company publicity, in institutional advertising and in the employee publication. Letters. A letter of congratulations from the boss is always appreciated. Example Setting The head of a manufacturing company has suggested some specific ways in which an executive can help his party-and perhaps more important, at the same time demonstrate to his employees his active interest in politics. They include: o Escorting candidates through your place of business. o Attending political meetings-and encouraging others to attend. o Writing letters-to-the-editor expressing well reasoned political beliefs. o Volunteering to take voters to the polls. o Working at your party's headquarters for a morning or afternoon. o Inviting candidates to speak at meetings of organizations of which you are a member. o Holding luncheons or coffee meetings for visiting candidates. Assigning Responsibility As more businessmen realize that the future of business and the nation is tied to government, some are making key staff personnel responsible for governmental affairs of all kinds-political, civic, legislative. Others are setting up departments assigned specific responsibility in these areas, just as they have departments for production, sales, public relations, and other activities. Ford Motor Company, for example, has an Office of Civic Affairs. It is responsible for official contacts with the federal, state and local governments, for traffic safety, highway improvement, community relations, educational affairs, and dealer public affairs information. It handles the company's political education program. ISSUE ANALYSIS AND DISCUSSION Although management has ample opportunity to stimulate political activity among employees, its responsibilities don't end there. To make sound judgments on candidates and issues, employees must understand the basic problems that confront the nation and business today. Management can on a nonpartisan basis adopt programs that will help employees and others in the community to better understand political and legislative issues, local, state and national. Such issues range from road improvements and water supply problems at the local level to labor legislation, public spending and taxes at the national level. J. S. Parker, General Electric Vice President, put it this way: "As a manager, the businessman should see that everyone associated with business as customer, employee, share owner, community neighbor, or voting citizen is provided with the facts about those issues that affect the ability of business to serve the people of the United States. This can and should be done on a nonpartisan basis, as a company effort." EFFECTIVE PROGRAMS Company efforts to promote the analysis and discussion of political and legislative issues vary greatly. A brief look at three programs, however, will be useful. Sound Government Program of Johnson and Johnson Designed to develop increased interest in good government among white-collar workers, the program operated in this way: All employees who wished to participate were members of the Sound Government Committee. A Sound Government Executive Board of 15 employees selected a topic for discussion, usually after polling members of the committee. The topic had to be of basic interest to the employees and lend itself to practical discussion. Topics, for example, included the New Jersey gubernatorial campaign, taxes, the federal budget, political party platforms, the school problem, and citizen action. Prior to discussion meetings, interest in the topic was built up through a one-page Newsletter, "Two Minutes, Please," mailed to the homes of Committee members, the distribution of other pamphlet material, and conferences conducted by the Personnel Department. The suitability of the topic was also tested and possible kinks ironed out in a small pilot testing program. Discussion meetings on the topic took the form of seminars, debates, or panel discussions, with groups limited to 25 to attain maximum participation. Experience showed that the panel format stimulated maximum participation. The Executive Board usually provided moderators for the panels. The discussions were evaluated through questionnaires and interviews with participants. The results were gratifying. More than 2,000 members of management from assistant foremen to department heads participated regularly in the non-partisan program. Management was urged to participate actively in local politics in the party of their choice. Backed by a positive company policy, more than 200 held elective or appointive offices in 1958. Gulf Oil Corporation Gulf Oil Corporation plans to study the record of elected officials as an initial step in a program to take an active interest in practical politics and to encourage its shareholders, employees and dealers to become more politically active in their communities. The plan is to analyze the record of members of Congress by (1) their attendance at important sessions; (2) their vote on significant measures, and (3) their attitudes as revealed by speeches and committee activity. Archie D. Gray, Senior Vice President, said that the company is studying everything "that may help an individual shareholder, employee or dealer determine whether his senators and his congressman are serving him well, little, or not at all." Information about the officeholders may be distributed by states and congressional districts to serve, in each area, as a nucleus of fact around which a program of action may be developed. Complete details of the program were not definite when this pamphlet was written. American Can Company A third approach to issue discussion and action is illustrated in the Government Relations Program of the American Can Company. It operates under the direction of its Washington representative. The program was kicked off in a letter to management in which William C. Stolk, president of the company, said it was important for management to speak up on important issues, that he was going to speak up, and that he wanted the management group to speak up, too. To enable its management to speak up, a basic and long-range program of economic and political education has been initiated. This program is designed to: 1. Identify major social, economic, and political issues which will be considered by the Congress; analyze their implications, bring together the results of internal and external research on these issues, and provide individual managers with the essential facts required to take sound positions. Managers thus will be able to present their views intelligently to other employees of the company, to members of the communities in which they work and live, and to members of Congress. 2. Encourage managers to take an active interest in the process of selecting and electing legislators; help them to learn how to participate in this process through the party of their individual choice; and stimulate them to encourage and assist others to do likewise. 3. Present to all employees of the company through the medium of employee publications, newsletters and bulletins, facts which will enable them to decide for themselves the kinds of legislative action which will, over the long run, increase their standards of living, strengthen the company, and improve the welfare of the nation. The program of this company is closely identified with top management. It is run from the Executive Office, under the direction of the Washington representative, and includes periodic letters from the president to keep the staff informed of his views. It is firm company policy to conduct this program in such a manner as will deserve the approval and support of interested economic, social, and political groups. FORD MOTOR COMPANY THE AMERICAN ROAD DEARBORN. MICHIGAN August 29, 1958 Dear Sir: We hare been advised that you volunteered to work for the political party of your choice during the 1956 general election campaign. In so doing, you exhibited an awareness of citizenship obligation of which the Company is proud. Through no fault of yours, the 1956 recruiting of volunteers was conducted so late In the general election campaign that the parties were, in many cases, unable to make the fullest and most intelligent utilization of your services. To permit you the personal satisfaction of more interesting and vital service to your party, it is important this year that the leadership of the political parties be supplied with volunteer lists early enough to assure an important campaign role for each volunteer. May we, therefore, ask your co-operation in quickly completing and returning the enclosed card before September 10 if you are again willing to make yourself available for partisan work. Since 1956, many voting precincts have been changed, or perhaps you have moved since completing your party volunteer card in 1956. It is suggested that you check your voting registration card, or your city, village or township clerk, before filling blanks on "ward" and "precinct" to ascertain that the information supplied in those blanks is current and accurate. Your prompt reply will assure you a more Important role in party work than is possible at a later time in the campaign. Sincerely, John L. Denman Associate for Civic Groups Civic Affairs Office Letters to Employees Many companies send letters to employees to report on the progress of contract negotiations, to keep them informed of the business outlook, and for other reasons. Letters offer many opportunities for presenting facts and statistics that will increase the employee's awareness and understanding of basic economic issues. Letters can also be used to present the company's viewpoint on specific issues. The president of the Steel Improvement & Forge Company, Cleveland, Ohio, for instance, wrote a letter to employees discussing an operating tax levy which the City of Cleveland was presenting to the voters to raise money for essential community services. The voters were being asked by the city to approve an additional tax levy of 1.5 mills, which would increase the tax on the average Cleveland home $8.30 a year. The company's president pointed out in the letter that if the levy did not pass, the City Council would have to impose an income tax of 1%, which would come to $52.00 annually for each worker who earned $100.00 a week-much more than the proposed tax levy. Moreover, the employee would not have a chance to vote on the income tax. The employees and their families were urged to vote, and to vote for the levy. "Remember the levy is cheaper," the letter concluded. The levy passed. EMPLOYEE CARD Ford Motor Company assisted political parties in obtaining volunteer workers by sending them the letter linked above and the employee card. Employees who wished to work for a party could fill in the cards, which were forwarded to headquarters of the indicated party. Employee Publications When Fred Foy, Chairman and President of Koppers Company, Inc., checked the contents of seven leading union publications during the first three months of 1957 to see what kind of coverage was given such subjects as the wage-price spiral, right-to-work laws, corporate profits, proposed revisions in the Taft-Hartley law, and extension of the minimum wage law, he found that 103 articles on the five subjects had been printed. In contrast, when he wrote to 50 of the largest companies in the country asking what their employee publications had printed on the same subjects, he found that only three of the 37 who responded had carried any material on them. Mr. Foy's conclusion was understandable: "I'm just baffled," he said. "A management publication reaches exactly the same people as the union publication. And reliable opinion surveys show union members are thinking for themselves. I don't understand why we of management don't see that our publications give employees the other side of the story." Koppers Company does discuss issues in its employee publications. For example, during the controversy over construction of a federal dam at Hells Canyon, a Kopper's publication explained the issue of public versus private power, in terms each employee could understand. Among other things, the article pointed out the cost of the federal project would take $9.00 out of each employee's pocket and the pockets of every other taxpayer in the country. It also reminded the reader of increased government spending: "Well, $9.00 isn't all the money in the world, but all of us look at deductions from our pay envelopes on payday and notice with alarm just how much the Federal Government has made our Company deduct from our regular wages to pay for the cost of government. There are a lot of $9.00 bites and these bites get bigger and more frequent. "When are they going to stop?" The possibilities for utilizing employee publications in developing wider understanding of basic economic issues are virtually urdimited-and as yet, apparently, little appreciated by management. For example, during political campaigns, factual information can be presented on the duties and responsibilities of those who will be elected, the qualifications of candidates, the secrecy of the ballot and the procedures to be followed in registering and voting. When campaigns are not in progress, the publications can present feature and news stories on the accomplishments of capable congressmen, senators, state legislators, and other officials. Economic Discussion Groups Courses on basic economics are being held by an increasing number of companies. Hundreds of firms have organized Economic Discussion Groups, using the materials in the National Chamber's course called "The American Competitive Enterprise Economy."* This course includes 17 pamphlets, tape recordings and questionnaires and covers key economic principles with emphasis on analysis and problem solving. Because political and economic issues are inextricably tied together, a clearer understanding of our economic system will open the door to more effective political action. Letters to Legislators In addition to encouraging political participation and carrying on economic and political education programs, there is a third important activity a business firm can encourage its employees to take part in-infonning legislators of the effects of pending legislation on them, their families, companies and communities. * Information about the organization and operation of an Economic Discussion Group is available from the Chamber of Commerce of the United States, Washington, D. C. Society has become so complex that the legislator who can master all phases of all the diverse kinds of legislation coming before the state legislatures and the Congress is rare, indeed. Most legislators usually depend on lobbyists, the press and letters from home to get a balanced picture of the effects of a given piece of legislation. Of these sources, letters from home are likely to be read most carefully, particularly if the writer appears to be well informed and presents his case convincingly. An increasing number of business firms, associations and chambers of commerce are encouraging businessmen to study local, state and national issues carefully and write their congressman and senators. Many business firms have found that while their Washington and state capital representatives can effectively present management's views and can relay up-to-date information on legislation to the company, letters from businessmen in the legislator's district also carry great weight. Circulating information to all departments and branch plants of a company on how pending legislation may affect business and urging employees to evaluate it and write their legislators can be very helpful in keeping legislators informed on the various aspects of the many bills they must consider. What Local Chambers Can Do Local chambers of commerce are nonpartisan organizations. The fact that they do not endorse political candidates, however, does not mean that they cannot make a real contribution to political understanding and political activity in their communities. Local chambers are in direct contact with more business and professional leaders than any other community organization. Consequently, they can perform a major service by stimulating businessmen to become active in politics, and by providing them with information that will make their individual efforts more effective. For example, local chambers can sponsor "Action Courses in Practical Politics" and other suitable political participation programs, and can develop and disseminate information on candidates and election issues. They can organize committees that study legislative issues and encourage expressions of informed views on them to office holders. As the principal organization of businessmen in the community, the local chamber can conduct registration and voting drives; promote honest and clean elections. A local chamber can assist businessmen in becoming active and effective in politics in a variety of ways: A chamber can encourage its member firms to conduct an "Action Course in Practical Politics" for key employees. If small companies feel they are unable to sponsor the course, the chamber can aid them by organizing a course which can be attended by representatives from several companies. Chamber meetings can be held at which members who are active in politics can pass on ideas and information to others who are interested in becoming active. Regular chamber media of communication can be used to encourage businessmen to participate in politics. Letters, bulletins, speeches, public statements and articles in regular publications can emphasize the importance of participation in politics, and cite specific opprtunities for participation. For example: One local chamber issued a bulletin on "How to Get into Politics." Others have distributed a checklist on "What You can Do to Get Out the Vote" that was especially prepared for businessmen by the National Chamber. Some chambers have distributed material on registration and voting procedures, and on the importance of political contributions. Get-Out-the-Vote Drives Local chambers can be helpful in providing leadership, inspiration, guidance, materials and research in get-out-the-vote drives. When voting machines are first installed, the local chamber can be of service by conducting an educational campaign to explain how to use them properly. Emphasis can be placed on how voter may "split" his vote among candidates from different parties, since many voters are afraid to split their vote for fear of making a mistake when they first use a voting machine. One local chamber developed an inexpensive film that explained how to use a voting machine and showed it to meetings of service organizations and clubs in the community. Models of voting machines, obtained from the manufacturers, can also be exhibited in bank lobbies; railroad, airline and bus terminals, and other places frequented by the public. Research Activities As a service to its members, local chambers might make and publish a study, by wards and precincts, of preceding elections -the number of eligible voters, the number who voted, and the margin of victory. Such a study would not only tell "what happened," but would provide meaningful information to business leaders who would be active in the next election. Such a project would indicate the wards and precincts where next year's efforts to increase registration and voting would be most productive. (Political parties usually do a similar research job for their own guidance.) The Danville, Illinois, Chamber, for example, tabulated and distributed information, from the official records, on the number of members, and their wives, in various organizations who voted in the previous primary and for the election of members of the Danville School Board. Three bulletins were mailed to the home addresses of the 3,019 persons surveyed. Of some 20 organizations surveyed, in only one-the Bar Association-did more than half of the membership vote, and then only by a margin of two. Groups surveyed, besides the Bar Association, included Junior Service Club, Junior Chamber of Commerce, Exchange Club, Chamber of Commerce, Medical Society, Lions Club, Business & Professional Women's Club, Rotary Club, League of Women Voters, Dental Society, pastors of Danville Churches. For each organization, the Chamber published a box score something like this: THIS IS YOUR CLUB'S RECORD Members who voted in this election Members who did not vote Members' wives who voted Members' wives who did not vote The action of the Danville Chamber emphasizes an important principle. While chambers of commerce-as business organizations should not neglect opportunities to encourage all persons to vote, their primary responsibility is to encourage business and community leaders to exercise their citizenship duties. Information About Candidates Providing information on candidates and the offices they seek to fill can be a useful chamber service. One local chamber sent all candidates a questionnaire asking for biographical information. This biographical information was then published, along with an outline of the requirements of the public office each was seeking to fill and the salary the position paid. The information was made available to chamber members for distribution among their employees, in the belief that a comparison of the candidate's background and qualifications with the duties he would have to perform and the salary he would get would make the voter a better judge as to whether a candidate's election would serve the public interest. Chamber sponsorship of "Know Your Candidates" luncheons or dinners can be extremely useful in enabling businessmen to evaluate candidates for public office. Sometimes both Republican and Democratic candidates are invited to attend the same luncheon or dinner; sometimes a separate meeting is planned for each candidate or party. In either case, however, it is important that the meeting be so planned that those in attendance will gain as much information as possible about the candidate's qualifications and political philosophy. A question-and-answer period is not only useful in drawing out the candidate's views on issues that are important to businessmen, but it can add some spice to the meeting and sometimes make headline news. A few chambers have publicized voting records of legislators on issues of interest to business as part of their "Know Your Candidates" program. For example, during the 1958 Congressional campaign, the Sumter, South Carolina, Chamber published a pocket-size folder showing how the state's two senators and six congressmen had voted on 15 issues "affecting the future of business." Business leaders were urged to study the votes on such subjects as reciprocal trade, farm legislation, public housing and TVA expansion-and then to express their views on these votes to the senator and congressman who were candidates for re-election. Early in an election year, perhaps in January or February, a local chamber can be helpful to its members by publishing information on the offices that are to be filled in the Fall election, as well as information about the primaries or nominating conventions that may precede the general elections. Businessmen can use this information in planning discussions of issues, or in considering outstanding personalities who ought to become candidates. Some businessmen might even consider running for office themselves. Information on Issues Chambers provide a highly important service to their members by keeping them informed on local, state and national issues that affect business stability and job-creating growth. Such information helps businessmen evaluate the views and votes of officeholders, and the campaign comments of candidates. Of equal or greater importance from the standpoint of political activity, information on issues aids businessmen in interpreting to others the comments of officeholders or office seekers on important legislative proposals. Many campaign comments on such proposals completely conceal the basic issues involved in them with flowery phrases and emotional appeals. Information that helps businessmen cut through such superficial comments, and point out basic, underlying issues, is a valuable asset in political activity. Many local chambers use their regular bulletins to keep their members informed on important issues, and to interpret the significance of them. Some chambers prepare special bulletins on legislative issues that are sent to all members, or to selected mailing lists. Chambers frequently schedule membership meetings at which guest speakers interpret issues that are of special political significance. Press and radio coverage of such meetings extends their influence to many others in the community. Through cooperation with local radio and TV stations, chambers are often able to help develop a better understanding of important issues. Chambers can frequently suggest both subjects and participants for discussion of issues on local programs. Communications with Members of Congress Chambers in more than 1,000 communities have set up Congressional Action Committees to help present grass-roots business viewpoints on major issues to members of Congress. The principal purpose of such committees is to encourage and equip committee members to express personal, persuasive views on import- ant issues to members of Congressional committees who are responsible for developing legislation on the issues, and to their own Congressman and Senators. What State Chambers Can Do State chambers of commerce have a vital interest in federal legislation and the quality of their congressional delegations, in addition to their primary interest in the state government. State groups are among hundreds of other organizations, local, state and national-working for good government. State chambers and associations encourage citizens to register and vote and to elect good candidates to public office; they provide information on proposed legislation; coordinate and service the activities of their business and organization members, particularly during sessions of the state legislature; and engage in similar activities designed to develop an economic and political climate that will serve the best interests of everyone. Ohio Chamber's Program For a number of years business firms and organizations in Ohio have been encouraged by the Ohio Chamber to stimulate voter registration and voter interest in supporting qualified candidates. In 1958, numerous communications were sent to business firm members emphasizing the urgent need for personal political activity by executives, professional and administrative persons, and their families. Following a pattern established in 1950-called "The Ohio Plan" intensive efforts were made to obtain concerted activity by business executives in political education. On a nonpartisan basis, business leaders were urged to help raise the level of political understanding and activity of persons engaged in business, industry, and the professions, and also to recruit people for active participation in the political process. A feature of the plan was a program directed toward key business executives. They were urged to send letters that emphasized the importance of voting, participation in politics and an understanding of issues to selected employees at their homes. Hundreds of Ohio business executives cooperated in the plan, always exercising the privilege of adjusting the program and activity to the needs of their own organization or locality. Voters Information Program A number of Ohio business and professional organizations (including the Ohio Chamber) cooperated in promoting a non-partisan, nonprofit educational program called Voters Information Program (VTP). Program materials included: 1. An Ohio map showing counties where registration is required. 2. A "blue print" (so named because it was on blue paper) explaining how members could make sure their supervisory personnel and families were registered. 3. A list of voting eligibility requirements. The "blue print" recommended these four steps: 1. Each member company assigns a specific officer to obtain a list of supervisory personnel and all adult members of their households. 2. A special "Registration Committee" ascertains from the local board of election which persons on the lists were registered. 3. A registration campaign to get all eligible persons registered before the deadline. 4. A campaign to insure full turnout at the polls. As part of the program, a series of advertisements on voting was prepared and offered to local business and professional men for sponsorship in newspapers and other media. The ads dealt with the secrecy of the ballot, the importance of "your one vote," and the fact that "you, the voter, hold the key." Indiana Citizenship Participation Program The Indiana State Chamber furnishes an example of a long-range Citizenship Participation Program. The program is really four programs-each revolving around a specific event-the primary election, the general election, the post-election period, and the sessions of the legislature. Primary Election Program. Monthly meetings are held with representatives of other business organizations to determine issues that need emphasis. General citizenship participation meetings are held in cooperation with local chambers in about 20 areas of the state. Information is distributed before the primaries on the rules and regulations governing primary elections, for example, information on absentee voting rules. General Election Program. Important legislative issues are researched and election rules distributed during the summer. During September and October, re-legislative clinics are conducted and publicized in areas all over the state. Legislators and local officials are invited. Publications like "Let's Talk Politics" and "Get Out the Vote" are distributed. Post Election Program. Research studies on specific legislative issues are distributed. At a statewide pre-legislative conference, organizaton executives, committee chairmen, government officials and legislators examine vital issues coming up in the General Assembly. During Sessions of the Legislature. Daily and weekly legislative reports show the status of legislation that is introduced, and carry comments on legislation important to the Indiana Chamber's membership. Weekly legislative breakfasts are attended by local chamber executives, members of the legislature, and other local and state government officials. Strategy, issues, and tactics on pending legislation are discussed at staff conferences. Reports are made by staff members on the probable effect of proposed legislation. The business viewpoint is taken to the public via radio and TV, through the newspapers, and through speeches to clubs, civic groups and other gatherings. Memoranda from chamber committee chairmen help keep the legislators and state officials informed on how businessmen feel about issues. Missouri State Chamber Program In 1955, the Missouri State Chamber became alarmed over the apparent bias of the legislature, as the result of years of complacency and political inactivity by Missouri businessmen. Representatives of the Missouri Chamber, armed with voting records and other information on how legislators performed on crucial issues, traveled the state to explain the situation to business and community leaders, county by county, town by town. In a year's time, prior to the 1956 elections, chamber staff personnel traveled 40,000 miles to 104 of the state's 114 counties. They made personal contacts with editors, business and professional men and other community leaders. They stressed the importance of electing good men to the legislature, regardless of party; and of knowing where candidates stood on issues affecting business and the economy. The 1956 election results showed the effects of this educational campaign-there were 52 new faces in the legislature. The campaign was also reflected in the more objective analysis of issues by some reelected legislators. The plan was broadened after the 1957 legislative session. "Report to Business" meetings held throughout the state supplemented the personal and individual contact phase. These were not routine "speech" meetings. Rather, small groups of selected businessmen met in a workshop atmosphere. Discussion was largely informal, as businessmen were shown the role they could play in the state legislative program. This grass-roots program was received with such enthusiasm by the Missouri Chamber's membership that a similar program at the congressional level was started. Getting Good Candidates A number of state chambers have urged their members to help improve the quality of candidates for public office as a step toward getting better government. The representatives of the Missouri State Chamber urged such action while they were touring the state. Another method for achieving this goal is illustrated by the Delaware Chamber, which wrote letters to members that called attention to the state's fiscal situation and the need for better government, and then pointed out: "The Chamber believes that the candidates for all offices by both parties should be of the highest caliber obtainable, pledged only for good government without regard to political implications or the clamoring of minority groups. "Believing this the Chamber urges you as a member and a taxpayer to interest yourself in recommending to the respective political parties, candidates whom you regard as qualified for public office. This applies particularly to the various offices which will be filled at the forthcoming November election. "You can do two things to assist in this program of better government. They are: 1. Make known to the committees of both parties (a list is attached) the names of persons whom you feel are qualified to be candidates for office. 2. Permit members of your organization to run for office without penalty for performing a public service." The Delaware Chamber in 1958 organized "The Nonpartisan Committee for Good Government, Inc." The aim of this Committee was to bring about better government for Delaware and its political subdivisions by working with and through the two major political parties to obtain enactment of sound legislation. A well-known registered Republican was elected president of the Committee, and equally well-known Democrats were selected to fill the offices of vice president and treasurer. The Committee was active in the nomination and election of candidates in 1958, published a code of "Twelve Objectives for Better Government," and completed a study of the post-war fiscal problems of the State of Delaware. Party Platforms Some State Chambers make party platform recommendations to state political parties. Members of the Empire State Chamber of Commerce in New York, for example, appeared before the State Republican and Democratic Platform Committees prior to the state conventions and were successful in obtaining "Business Climate" planks in the platforms of both parties. Such recommendations were only one phase of the Chamber's broad program called "Business Political Action." The program includes get-out-the-vote campaigns, educating businessmen on issues and candidates, weekly legislative breakfasts for businessmen in Albany during legislative sessions, and other techniques for improving political participation and understanding. During one campaign the Chamber distributed a list of 16 "Questions to Ask Candidates" to assist in the evaluation of candidates. The questions covered the candidates' views on such subjects as government spending, taxation, and control of labor racketeering. What Associations Can Do Since trade and professional associations have many of the same problems-and the same opportunities-that face local and state chambers of commerce in encouraging political activity, much of the preceding review is applicable to them. Like local and state chambers, associations are nonpartisan. As a result, they concentrate their efforts on encouraging political participation among their membership and in stimulating discussion and understanding of basic political and legislative issues. A survey of more than 600 associations made by the Chamber of Commerce of the United States in 1955 revealed that more than 90 per cent of them were engaged in "government relations," and more than half considered government relations to be a "major activity." A 1958 survey of 180 associations revealed that 150 had organized legislative committees-88 of them concerned with national legislation, 62 with state legislation. The 1958 mid-year report of the Legislative Committee of the Associated General Contractors illustrates typical activities of an association in the legislative field. The report showed that: At the invitation of Congressional Committees, eight representatives of the AGC testified before these committees on legislation that directly affected construction. Four statements were filed with Congressional Committees stating the policies of the AGC on specific bills. The construction industry was kept informed on legislative developments through articles in the Association's magazine; through more than 20 legislative bulletins from the national office which were sent to all the chapters and members of the Governing and Advisory Boards; through a regular national Newsletter, which was sent to 7,200 members, and through the many bulletins and periodicals of 125 local chapters and branches. Practical Politics Programs The degree to which associations have emphasized political activity among their membership has varied greatly. Some associations have ignored politics entirely. Others have participated in "get-out-the-vote campaigns" or have urged their members to contribute to the party of their choice. Others have gone further. The American Farm Bureau Federation, for example, has published voting records of members of Congress on farm issues. It is only in recent years, however, that associations generally have shown increasing awareness that they can broaden their governmental action programs to include efforts to encourage their members to become more active in practical politics. Some of the ways in which associations are stimulating political participation include: o Urging political participation in speeches by association executives, and in association letters and publications. o Adopting policies in favor of practical political participation by businessmen. o Issuing bulletins or other material devoted to practical politics. o Helping their members set up programs for educating their employees in politics. o Discussing issues and arranging meetings for their members with legislators and other officials. o Devoting part of their annual meeting program to a discussion of businessmen in politics. Syracuse Seminars on Practical Politics. One of the first courses in practical politics sponsored by an association was that conducted by the Manufacturers Association of Syracuse, N. Y. This program revolved around a five-phase action pattern: The first phase consisted of gathering information and printing a Political Primer for Management, covering government and politics, with special emphasis on local government. The second phase was a "tell-and-sell" dinner for top management, using sales promotion techniques to explain and get top management approval of the entire program. The third phase consisted of a concentrated two-day Practical Politics Seminar for selected middle-management employes from many companies. At the end of the training seminar each participant was given manuals and materials that would enable him to conduct seminars in his own plant. The fourth phase consisted of in-plant seminars held for 11 weeks, two hours each week. This phase included assignments in grass-roots politics, which exposed the participant on a face-to-face basis with government and the practicing politicians in the Syracuse area. The fifth phase included follow-up activities to refine and improve the program to increase its effectiveness. Non-members, as well as members of the association, were invited to participate. Some 600 businessmen and management employees from 30 firms took part in the 33 seminars conducted in the Spring and Fall of 1958. Sample Program The following steps, based on current practices, outlines procedures that can be used by an association in developing a program to encourage political participation among its members. 1. A small group of business leaders who belong to a particular association discuss informally the possibility of instituting such a program. 2. An industry spokesman discusses the role of businessmen in politics at an association meeting. He emphasizes the serious consequences of failure to participate effectively in politics. 3. As a follow-up to this meeting, the association staff reviews the possibilities for action with a small group of industry executives who, in their own companies, have responsibilities in the public affairs and legislative areas. 4. The problems confronting businessmen in politics are outlined at an Executive Committee meeting or a meeting of the Board of Directors. The need for action is stressed and specific approaches discussed. 5. As a result of this meeting a decision is made to develop a program. Generally such a program recognizes that the association is primarily a service organization and not a political body. Accordingly, emphasis is placed on motivating management in the industry to political action through the dissemination of pertinent information, and by arranging meetings at the local or regional level. The responsibilities of the association's Public Affairs or Legislative Committee (concerned with legislative issues and the establishment of industry policy on legislative matters) is broadened to include the political participation program. Such a committee usually has the assistance of a staff member of the association who: o Gathers pertinent political information, including examples of formally adopted company policies in the area of political action. o Distributes this information to member companies. o Works with a political task force of industry executives in arranging regional political education seminars. The thousands of trade and professional associations can be a real and vital force in practical politics as they intensify their efforts to keep their millions of members informed on basic political and legislative issues, and at the same time encourage active political participation. What follows next is mainly historic and should NOT be used for present the year 2012 and forward guidance. Legal and Tax Considerations Fear of violating the law probably keeps many companies from participating to a larger extent-or participating at all-in practical politics. Except for banning outright financial contributions and other spending by corporations in support of particular candidates, on which the laws seem clear, there is no sharp line drawn on just how far corporation programs can go short of those restrictions. Companies, in fact, know far less about how far they can go than unions know about how far unions can go-although both are subject to the same federal law and some state laws. The reason for this is that companies, chambers of commerce, associations and other business organizations only recently began charting a course for participating in politics. Consequently there have been no important rulings or court tests on management activities to serve as a guide. There have been, however, several court decisions-two by the United States Supreme Court-involving labor union activities from which companies and others have been trying to draw some guidance. The federal law on the subject is the Federal Corrupt Practices Act and is the same one that management is subject to. The need then is to translate, in relation to management activities, the principles which the courts have spelled out in approving certain union activities. Actually, if one is to judge by how the courts have viewed labor's political activities, there are many things management can do short of making an illegal political contribution or expenditure. Some of them are reviewed in the first section of this pamphlet. As individuals, of course, business executives and other management personnel are no more limited than other individuals. Along with other legal restrictions, there are important tax questions that have to be considered in relation to political expenditures, particularly by chambers of commerce, associations and other tax-exempt organizations. They involve the tax-exempt status of the organizations as well as the tax deductibility of members' dues as a business expense. Political contributions by individuals, associations and others privileged to make them are not deductible from income for federal tax purposes. The following pages briefly review the major laws, court decisions and tax rulings pertaining to political activities and how they relate to management. The Laws In addition to the Federal Corrupt Practices Act, there are also some 35 state laws that attempt to control the political expenditures of corporations. In those states, it is important to be familiar with the state as well as the federal statute, even though in most instances they will be pretty much alike. (Only five states restrict union political spending, to varying degrees. They are Wisconsin, New Hampshire, Texas, Indiana and Pennsylvania, which states are also among the 35 that restrict corporate expenditures.) History The Corrupt Practices Act was passed in 1925, and amended in 1947 by the Taft-Hartley labor law, but it was preceded by an earlier law on the subject in 1907. Congress took action against corporate political contributions at that time in response to charges that "the great aggregations of wealth" were making vast political expenditures. One of the pleaders for legislation was Samuel Gompers, president of the American Federation of Labor. He said elections should "be free from the power of money." President Theodore Roosevelt told Congress that "directors should not be permitted to use stockholders' money for (political) purposes." In the 1907 statute, Congress made it unlawful for a corporation... to make a money contribution in connection with any election at which Presidential and Vice-Presidential electors or a Representative in Congress is to be voted for or any election by any State Legislature of a United States Senator. In 1925, the Corrupt Practices Act was passed, incorporating the 1907 law and tightening the restriction. The term "money contribution" was changed to "contribution," and the term "contribution" was given a broad definition. Among other things, the definition included not only money, but any "gift, subscription, loan, advance or deposit of money or anything of value." The new law made it unlawful for a corporation "to make a contribution in connection with any (federal) election." It did not, at that time, apply to labor unions; nor did it cover political "expenditures." Unions came under political spending restrictions in World War II, when Congress passed the Smith-Connally Act in 1943 to curb wartime strikes. This temporary law contained a provision amending the Corrupt Practices Act so that it became unlawful for a corporation "or any labor organization" to make a contribution in connection with any (federal) election. It became apparent, after the 1944 elections-the first in which the CIO Political Action Committee functioned that the restrictions on political "contributions" did not curb union spending. Senate and House committee investigations in 1945 revealed millions of dollars spent by the CIO and its affiliates in the 1944 campaign. There were complaints that the CIO distributed 200,000 copies of a political pamphlet in an effort to defeat Sen. Robert A. Taft, who was seeking re-election in Ohio. Taft-Hartley Provisions With the Smith-Connally Act expiring, it was decided in 1947, in passing Taft-Hartley, to make the restriction on union political contributions permanent, and to try to "plug the loophole" by including "expenditures" as well as "contributions" in the ban. The ban was broadened, moreover, to include primary elections and political conventions and caucuses as well as general elections. The Taft-Hartley provision is the law today on this matter. It is Section 304 and amends Section 313 of the Corrupt Practices Act. It is also identified as Section 610 of title 18, U. S. Code. It reads as follows: It is unlawful for any national bank, or any corporation organized by authority of any law of Congress, to make a contribution or expenditure in connection with any selection to any political office, or in connection with any primary election or political convention or caucus held to select candidates for any political office, or for any corporation whatever, or any labor organization to make a contribution or expenditures in connection with any election at which Presidential and Vice Presidential electors or a Senator or Representative in, or a Delegate or Resident Commissioner to Congress are to be voted for, or in connection with any primary election or political convention or caucus held to select candidates for any of the foregoing offices, or for any candidate, political committee, or other person to accept or receive any contribution prohibited by this section. Penalties for violation are up to $5,000 fine for any corporation or union in violation; up to $1,000 fine or one year imprisonment, or both, for every officer or director of a corporation and officer of a union who consents to an illegal contribution or expenditure, and the same for any person who receives a contribution. Willful violators may be fined up to $10,000 or imprisoned up to two years, or both. There has been considerable study, debate and litigation over the application of restrictions, particularly with respect to "expenditure in connection with any election." Most persons concerned seem to understand the ban on "contributions" as applying, generally, to direct financial assistance to candidates and political parties or committees. What seems not to be very well understood is the ban on "expenditures." Is it an unlawful corporate expenditure, for instance, to endorse a candidate or support a political party in a company employee publication? Is it unlawful to pay an employee for part of his working time spent in political activity? Is it unlawful to pay for newspaper advertisements and radio broadcasts urging the election or defeat of candidates for convention delegate who are pledged to vote for a particular presidential candidate? Organized labor attacked the 1947 ban on expenditures as unconstitutional, and was quick to seek a court test. In the 1948 elections, the CIO News published a statement by CIO President Philip Murray endorsing the election of a candidate for Congress in Baltimore. Extra copies were printed and shipped to Baltimore for distribution among union members. The CIO and Mr. Murray were charged with violating the Corrupt Practices Act. The Federal District Court dismissed the indictments on the ground that the statute abridged the rights of free speech and freedom of the press under the First Amendment. The Government appealed directly to the Supreme Court.* By a majority of 5-4 it decided that the offense did not come within the scope of the law-that there was no violation-and there was no need, then, to decide whether the Act was unconstitutional. The four justices in the minority felt that the law conflicted with First Amendment and therefore was unconstitutional. The majority said: If (Section 610) were construed to prohibit the publication, by corporations and unions in the regular course of conducting their affairs, of periodicals advising their members, stockholders or customers of danger or advantage to their interests from the adoption of measures or the election to office of men, espousing such measure, the gravest doubt would arise in our minds as to its constitutionality. The Court added, however, "We express no opinion as to the scope of this section where different circumstances exist." The other union political expenditure case that went to the Supreme Court involved the United Automobile Workers. The indictment charged the union with sponsoring and paying for television broadcasts which urged the election of certain candidates for Congress during the 1954 election campaign. The District Court dismissed the indictment, holding that what it charged the union with doing did not violate the law, therefore * United States vs. C.I.O., 335 U.S. 106 (1948) there was no cause of action. The Government again appealed directly to the Supreme Court. It disagreed with the lower court's view and sent the case back to Detroit for trial. A jury found the union not guilty, ending the case. In sending the UAW case back for trial, the Supreme Court indicated that a constitutional question would arise if the union were found guilty. The Court suggested that there might be a difference between the UAW and CIO cases because the television broadcasts were beamed to the public, whereas the CIO News went only to CIO members and other subscribers. The Court minority could not see it. While indicating in the UAW case that Congress intended to outlaw the type of TV endorsement involved, the court emphasized that if rights under the First Amendment are abridged, the Corrupt Practices Act must give way or be construed to avoid restraints on freedom of speech, press and assembly. If the Court follows the latter course, as some in management believe it will, unions and corporations will have to develop their own guide posts until there is further clarification through other cases or the constitutional issue is resolved. Two other cases that did not get to the Supreme Court offer some additional guidance as to what companies might do-at least until other courts indicate otherwise. One involves the question of paying staff personnel who devote part of their time to partisan politics; the other the matter of paid newspaper advertising and radio commercials. Use of Staff Personnel This case is United States v. Construction and General Laborer's Local 264,* a St. Louis local. In acquitting the local and its officers of making illegal expenditures in violation of the Corrupt Practices Act, the Federal District Court considered the degree of political activity involved and took the view that Congress did not intend such a narrow construction of "expenditure" as to outlaw it. The situation involved three employes of the local union who devoted "a considerable portion" of their time to political activity. * 101 F. Supp. 869 (1951) Some of the activity, such as getting voters registered and taking them to the polls, the court pointed out, was for the general benefit of all candidates, and some was devoted exclusively to the political interests of one candidate for Congress, who was the local union's president. The court said: It seems difficult for me to believe that the Congress intended that its definition of "expenditure" should be construed by the court so narrowly as to apply in a case of this type. . . If that is to be the construction placed upon this statute, then any political activity of any person on the payroll of a labor organization, from its president to its janitor, would render that union and its principal officers liable, if such persons devoted an appreciable time in support of, or in opposition to any candidate for President, Vice President, Senator or Representative in Congress. . . . The same would be true of any corporation which permitted one of its employees while on its payroll to spend a few hours hauling voters to a place of registering, to vote, or to engage in any other type of political activity. . . . It is difficult for me to believe that the Congress, with its vast knowledge of the practical application of its acts, intended such a restriction as is sought to be placed upon labor unions as here. In this court's opinion, at least, political activity incidental to an individual's job, even though partisan, does not place the employing corporation in violation of the law. Paid Advertising This case is United States v. Painters Local Union No. 481,* in Hartford, Connecticut. The local union, in January, 1948, contracted and paid for a political advertisement in the Hartford daily newspaper and a political radio broadcast over a nearby radio station. The messages urged defeat of Senator Taft, of Ohio, who was seeking the Republican nomination for President, and rejection of six Connecticut congressmen as candidates for reelection on the Republican ticket and their defeat in November if nominated. * 172 F. 2d 854 (1949) attempted to influence delegates to the State Republican Convention, the National Republican Convention and the elections in November. The District Court sustained the constitutionality of the Corrupt Practices Act as it applied to union political expenditures and found the union and its officers guilty. The court said: "The Congressional history of the Act makes it abundantly plain that the expenditures upon which this prosecution is based were of that very kind which Congress intended to forbid." The Circuit Court of Appeals, however, reversed the decision. It relied on the Supreme Court decision in the CIO News case. The court said: "It seems impossible, on principle, to differentiate the scope of that decision from the case we have before us. It is hard to imagine that a greater number of people would be affected by the advertisement and broadcasting in the present case than by publication in the union periodical dealt with in the CIO litigation." To substantiate the point that the two situations were similar, the court pointed out that (1) the Painters' Local Union did not own a newspaper; (2) placing the newspaper advertisement and radio commercial "was as natural a way of communicating its views to its members as by a newspaper of its own"; and, (3) the expenditures were authorized by a vote of the union members at a meeting. What Corporations May Lawfully Do Corporations are free with seeming reasonable safety to do such things as: 1. Encourage people to take an interest in politics. 2. Promote the study of politics. 3. Urge people to vote. 4. Discuss issues with the various candidates. 5. Distribute voting records of members of Congress. Samuel H. Still, attorney in the Library of Congress' Legislative Reference Service, said this in summarizing for a member of Congress the legal restraints on political activities of corporations: "It might be said that there are no privileges lawfully available to a national bank or corporation organized by authority of a law of Congress permitting the making of a political contribution. "However, this does not mean that such a bank or corporation cannot, in the regular course of conducting their affairs, make certain expenditures to advise their stockholders or customers of the danger or advantage to their interests from the adoption of measures, or the election to office of men espousing such methods. "For instance, space in a periodical published by such a bank or corporation and regularly distributed to stockholders or customers could be used to advocate election of certain candidates. Such space costs money, but it is an expenditure in the operation of the periodical and not an expenditure within the meaning of Section 610. "Each type of expenditure made by a bank or corporation would have to be examined separately to determine whether it was an expenditure within the meaning of Section 610. However, it can be pointed out that the Federal government has had little or no success in making indictments stick against labor unions prosecuted under Section 610 (expenditures of labor unions for political purposes also being inhibited)." Mr. Still then cites the four court cases in which labor organizations have been absolved of any legal violation in connection with their political activities. Other Federal Laws There are other federal laws which this review does not cover. The Hatch Act, for instance, restricts political contributions by corporations doing business with the Federal Government. The Powers Act of 1944 provides rules for identifying the association or corporation on any political literature it publishes or distributes. State Laws While the Federal Corrupt Practices Act applies to any corporation, whether organized under federal of state charter, it does not attempt to restrict corporate (or union) activities in state and local politics. This is left to the states. Thirty-five of them, either through constitutional or legislative provisions, have some restrictions on corporate contributions or expenditures in connection with state or local elections. But the laws vary by states, and should be studied carefully in each state. Some states restrict only certain corporations or specific kinds of contributions or expenditures. Illinois, for instance, prohibits only contributions by licensees under the Liquor Control Act, including manufacturers, distributors and retailers of alcoholic beverages. The New Jersey and Oregon laws cover insurance corporations, banks and public utilities. Some restrict expenditures in regard to political issues which are submitted to referendum, such as a right-to-work law, as well as the election of candidates to office. These 35 states had laws in 1958 intended to restrict at least some corporate political contributions and expenditures: Alabama Massachusetts Ohio Arizona Michigan Oklahoma Connecticut Minnesota Oregon Florida Mississippi Pennsylvania Georgia Missouri South Dakota Illinois Montana Tennessee Indiana Nebraska Texas Iowa New Hampshire Utah Kansas New Jersey West Virginia Kentucky New York Wisconsin Louisiana North Carolina Wyoming Maryland North Dakota Many states have other laws, besides those relating to contributions and expenditures, which are designed to handle the problem of undue influence on elections and are aimed at corporations or employers. They cover such things as: -Putting political material in pay envelopes. -Threatening to shut down or reduce pay if a particular candidate is or is not elected. -Denying leave to vote. It is important, and necessary, to be familiar with the law in your state. Tax Considerations Political contributions by individuals, or by companies where permissible, are not deductible for income tax purposes. However, most employer associations qualify for income tax exemption under the Internal Revenue Code as a "business league," and dues paid by members are deductible as an ordinary business expense. Two questions that arise in connection with political activity by associations are (1) whether the use of association funds for political activity would disqualify the association from tax exemption, and (2) whether it would affect the deductibility by companies of membership dues. There is one view that an association will not lose its exempt status as a "business league" if it engages in political activities which are not prohibited by the Corrupt Practices Act and they remain an incidental part of an association's over-all program. It might lose the exempt status if the political activity was so extensive as to make the association a "political committee." Actually, the kind of political activities permitted by the Corrupt Practices Act are entirely consistent with the general purpose of most business associations. As to membership dues, they should remain deductible by the member company as long as the association retains its exempt status. There is this possible exception: Any association funds spent for activities which are prohibited by the Corrupt Practices Act might be construed by the Internal Revenue Service as political expenditures by the corporation member and the portion of dues payments allocated to such expenditures declared nondeductible, even though the association does not lose its exempt status. Note: Inasmuch as both laws and interpretations of laws change, it is always advisable to consult legal counsel for clarification of specific questions about business activity in politics.