According to recent Financial Times report, tech giant Google (GOOG) is spending big on this year’s midterm election campaigns, even out-pacing investment banker Goldman Sachs in political contributions. The technology sector, as a whole, is pouring money into races for seats in the Senate and House of Representatives, aware that the future success of their industry is largely dependent upon key legislation that could be framed by the next Congress.
Goldman Sachs has a reputation for political contributions. Historically, the firm donates more to Democrats but has also boosted Republican coffers. The big players in the technology sector – Microsoft, Google, Intel and other companies – have also become known as big political donors and have, traditionally, donated more heavily to Democrats. In the last election cycle, Goldman Sachs outspent Google three to one, in terms of political contributions but, this time around, the latter has surpassed the banking giant. Whilst the investment bank has forked over $1.4 million in contributions this year, Google has pumped 1.43 million into campaign coffers.
As with many large corporations, campaign donation from Google, Facebook, Amazon and other prominent technology firms come from two sources; individual employees, as well as executives, make personal contributions but these companies also form their own political action committees (PACs) that funnel larger donations to select candidates. Most of this money has, in the past, gone to Democrats but that trend has shifted – at least for the time being – as the big names in Silicon Valley and elsewhere see the growing possibility that the Republican Party will hold onto its majority in the House of Representatives, where federal legislation originates. Moreover, the long-standing stagnation in Washington – as the Democrat-controlled Senate continues to hold up numerous House bills – may come to an end if Republicans gain a majority in the upper house, which has become a definite prospect, even as Democrats running for office or re-election struggle to distance themselves from an increasingly unpopular President.
Google established its own PAC, called NetPAC, in August of last year. NetPAC is spending big on this year’s election campaigns, as are several other technology industry PACs. The common perception among observers is that employees in the technology sector heavily favor the left and this has been true in recent years. Contributions from the companies themselves have been split between the two main parties, although Democrats have been favored in the past. In 2010, Democrats took a 55 percent share of the cash flowing from the tech industry. Facebook, Amazon, Google, Microsoft and other prominent companies shaping today’s technology have their eyes on the issues which will impact the sector, such as government oversight, taxes and visas for skilled foreign employees. Perhaps sensing a shift in the political winds, these companies are now favoring Republicans when deciding how best to spend their political dollars. Whilst Democrats have taken a 48 percent share of the money flowing from tech PACs this year, Republicans have seen their cut increase to 52 percent. The Financial Times article cites figures from the Center for Responsive Politics, a research group that tracks the trends and influences of money in politics.
This is, by no means, an ideological shift; executives at Google and other industry leaders see the prospect of the balance of power shifting to the party that most favors lower taxes and less regulation. As political consultant Reed Galen points out, “The executives of those companies may not always agree with Republicans on social issues, but for a lot of them – at the end of the day – business is business.”
Which candidates benefit from NetPAC is decided by a bipartisan team of executives, according to Google. The money is targeted strategically, taking into account which members of Congress are likely to play influential roles on House or Senate committees. The company states that it favors legislators who demonstrate a “commitment to an open internet.” Google understands that spending big on campaigns in an election that will determine which party drives legislation for the final two years of Barack Obama’s Presidency enables the company to protect its interest and foster a favorable business environment. Other tech giants are following this same strategy.
Graham J Noble