The Truth About Money

NAMIC’s PAC is on the Move

By Christina L. Kendall
Political Director

The inexorable increase in the cost of running for federal government has put more pressure on candidates to spend their time raising money.

Every week, the television show The Apprentice blasts the theme song by the O’Jays: “Money money money money, MONEY! Some people got to have it; some people really need it…”

And on Capitol Hill, those who “really need it” are candidates running for office, because money is exactly what it takes to run for political office. For the first time in history, in 2004, it took, on average, more than $1 million to win a seat in the House of Representatives. This represents an increase of 18 percent over 2002, according to the Campaign Finance Institute. Even more dramatic was the increase in Senate campaign expenditures. The average cost of a winning Senate campaign was $6.5 million, a 47 percent increase over 2002, and 57 percent more than what was spent on these same Senate seats a mere six years ago.

The inexorable increase in the cost of running for federal office has put more pressure on candidates to spend their time raising money. Not surprisingly, candidates have become more dependent upon corporations, trade associations and labor unions to meet fundraising goals. Consequently, PAC fundraising has increased 27 percent over the last election cycle. For example, during the last two-year election cycles, Sam Graves, R-Mo. took in $759,241 from individual contributors and $868,150 from political action and other committees. When you do the math, this means that he had to raise about $2,230 every day for two years.

Political Action Committees (PACs) have existed for some time, but are now becoming a more significant factor on the American political scene. PACs provide a legal means by which corporations, trade associations and unions can make donations to candidates for federal office – something that they cannot do directly.

PACs raise money from people employed by corporations or trade associations like NAMIC. Corporate PACs are financed with limited donations from company employees, who can each give up to $5,000 per year. In turn, per cycle, the PACs can donate up to $5,000 for a primary and another $5,000 for the general election to each federal candidate they support. It is only through PACs that corporations and trade associations can legally donate to congressional or presidential candidates.

Leveling the Playing Field

In a very important recent development, federal election officials have moved to make it easier for trade associations to raise money for political action committees. The Federal Election Commission (FEC) voted in January to propose a new rule that will allow associations to collect contributions by electronic payroll deduction from employees of member companies. The proposed regulation will allow executives to contribute to their industry political action committees through voluntary payroll deductions. Before this FEC-proposed rule, corporate managers were prohibited from doing so, but were permitted to contribute to their own companies’ PACs through payroll deduction. Employees will now also be able to earmark cash automatically to an association’s political action committee, or PAC, under the FEC proposal. For years, individual corporations and labor unions have been able to raise money this way, but associations have not.

Several trade groups and one congressman joined the campaign, writing letters in support to the FEC. Rep. John Doolittle, R-Calif., wrote to the FEC, “With the increased importance of PACs to the political process, I feel that it is essential to make it as simple as possible for individuals to contribute to PACs.” He said the electronic deductions would make contributing to a PAC “more affordable” for contributors because it allows them to “spread their contributions across a number of pay periods.”

Join the Club!

In 2004, the NAMIC PAC was completely revitalized in order to promote NAMIC member contributions, and thereby substantially enhance NAMIC’s presence on Capitol Hill. NAMIC has devised a new and updated giving program to recognize NAMIC member contributors. As NAMIC members increase their contributions, they will be recognized as members of one of several prestigious clubs and will receive a pin that symbolizes their active involvement. The pins will be worn during all NAMIC events.

It requires a significant PAC for NAMIC’s legislative message to be heard on Capitol Hill. NAMIC’s goal is to increase the size of its PAC significantly this year. NAMIC members are already responding and contributing in unprecedented numbers. NAMIC PAC is on the move!

Christy Kendall has directed the NAMIC Political Action Committee (PAC) for nearly three years. Christy came to NAMIC from Democracy Data & Communications (DDC), a political technology – consulting firm, where she trained employees of Fortune 500 companies and leading trade associations to implement successful advocacy programs. Before her stint at DDC, Christy served as the manager of political operations for the Business-Industry Political Action Committee (BIPAC) where she initiated a groundbreaking grassroots program entitled Prosperity Project.

NAMIC PAC Clubs

Benjamin Franklin Society = $1000 or more
Diplomats’ Club = $500 -$999
Ambassadors’ Club = $250 - $499
Century Club = $100 - $249

Posted: Friday, April 01, 2005 12:00:00 AM. Modified: Thursday, April 14, 2005 1:16:59 PM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.