Election Law for Corporations

Excerpted from Election Law Primer for Corporations, Fifth Edition

By Jan Witold Baran

Under the Federal Election Campaign Act, all corporations, including incorporated trade associations and not-for-profit membership corporations, are barred from making contributions to and expenditures on behalf of candidates for federal office. This broad prohibition applies to the use of corporate funds in connection with conventions and primary, special and general elections at which candidates for senator, U.S. representative or president are either nominated or elected. The Federal Election Commission construes the law as barring the use of corporate funds and resources for the direct or indirect benefit of any federal candidate or any political organization that supports federal candidates.

Contribution is something of value used in connection with a federal election. The use of corporate facilities and personnel for campaign purposes, for example, the reimbursement of corporate personnel for political contributions, or the payment of continued health and retirement benefits for an employee who takes unearned leave to campaign on behalf of a candidate generally constitute illegal corporate contributions. A corporate loan of funds to or for the use of political parties or candidates is illegal (unless made by certain lending institutions).

Other corporate resources including aircraft, automobiles, offices, equipment, phones, credit cards administrative services and trade marks are "something of value" and may not be given to candidates, political parties or political committees unless paid for at fair market value. Reimbursing employees for political contributions is illegal in general and particularly illegal when corporate money is used.

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ABA Section of Business Law