The Corner

Should ‘Government Motors’ Be Making Campaign Contributions?

General Motors has given more than $90,000 to political campaigns this year, according to data released by the Federal Election Commission last week. These are the company’s first political contributions since the 2008 election and, unsurprisingly, most of these contributions were to Midwestern congressmen and senators from states in which GM has a large presence. The contributions were evenly divided between the two parties, according to the Center for Responsive Politics, which provides the details.

But GM declared bankruptcy less than a year and a half ago, and was bailed out by $65 billion in taxpayer dollars; the U.S. Treasury currently owns 61 percent of the company. Should GM be making campaign contributions, given taxpayers’ sizable involvement as shareholders?

Robert Reich, secretary of labor under President Clinton, says no. In a blog post for the Christian Science Monitor last weekend, Reich illustrates how questionable GM’s political contributions are:

Last time I looked, you and I and every other U.S. taxpayers owned a majority of GM… [W]e taxpayers are paying some people (GM executives) to tell us how we should vote for another group of people (House and Senate candidates) who will decide how our taxes will be used in the future.

His description shows how far removed Americans really are from the GM-government relationship; despite owning a majority share in GM, taxpayers are little more than spectators to GM’s funding of politicians who would craft policy favorable to the automaker. As Reich points out, the law does not “allow taxpayer-supported entities to use taxpayer dollars to influence elections. And yet this is exactly what GM is doing.”

Reich is absolutely right about campaign contributions from GM. Because the government bailout of GM made taxpayers the majority shareholder in the automaker, the company should have refrained from making campaign contributions this cycle. Openly disregarding campaign-finance laws and common sense is no way to win back the hearts of American consumers, many of whom were opposed to the GM bailout in the first place.

— Jennifer Marsico is a Jacobs Associate at the American Enterprise Institute.


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