March/April 2011
ISRI’s political action committee is an essential part of its federal lobbying efforts, but strict federal election rules restrict the PAC’s ability to communicate with and raise money from ReMA members.
By Diana Mota
Meetings, letters, phone calls, e-mail messages, tweets … today it’s easier than ever to communicate with an elected official. This same proliferation of communications, however, makes it much more difficult to stand out from the crowd. At the federal level, one important avenue for reaching a member of Congress—to get heard and to make an impression—is the political fundraiser. Whether it’s a breakfast, lunch, cocktail party, or dinner, these events typically bring the candidate and a small group of supporters together in a relaxed setting away from Capitol Hill. The ReMA political action committee makes attending such events possible, giving the recycling industry a voice on Capitol Hill, and giving the association and its members access to legislators who play an important role in issues crucial to the industry.
ISRI PAC is the mechanism ReMA uses to solicit political contributions from eligible ReMA members and make contributions to candidates for the U.S. Senate and House of Representatives. Away from Capitol Hill, however, there’s little understanding of why PACs exist, what they do, and why they’re so important. And laws and regulations place tight restrictions on trade associations’ ability to solicit PAC support or even communicate with their members about their PACs. Scrap spoke with Billy Johnson, ISRI’s director of political and public affairs (who manages ReMA PAC), members of the ReMA PAC Leadership Council, and others with PAC expertise to give readers the PAC facts.
What are PACs, and why do they exist?
At the federal level, political action committees are private groups that raise funds and make contributions for the purpose of influencing the outcome of an election, a piece of legislation, or other political issues. PACs are a product of 1970s campaign finance reforms, says Geoff Ziebart, executive director of the National Association of Business Political Action Committees (Washington, D.C.), of which ReMA is a member. Congress created them to provide more transparency and disclosure in the federal campaign finance system. Their operations are tightly regulated, with narrow restrictions on how they solicit and distribute funds. They are “the one fully disclosed, highly regulated reform from the 1970s that has stood the test of time,” Ziebart says. “You’re operating at a sophisticated level, managing people’s money carefully, and subjected to federal regulations.”
Law firms, corporations, partnerships, unions, and associations (including ISRI) establish PACs because it’s the only way they can give money directly to federal candidates or political parties. As Ziebart puts it, organizations such as ReMA advance their philosophies by using their PACs to financially support or oppose candidates or elected officials based on their positions on issues important to them.
Why does ReMA need to give money to politicians?
ISRI PAC gives ISRI’s members and lobbyists better access to U.S. senators and representatives. For the most part, it makes contributions in two ways: It hosts fundraising events for elected officials, or it attends fundraising events that other groups or the lawmakers themselves are holding. The smaller and more intimate the event, the more time each attendee has to interact with the official and make his or her case, but smaller events can cost more. When ReMA PAC hosts an event, every attendee is there to persuade the lawmaker of the importance of recycling and how he or she can further the industry’s interests.
“The PAC is hugely important because it gives access to individuals in federal government with legislative agendas,” says Jerry Simms of Atlas Metal Sales (Denver), ISRI’s chair-elect and a member of the ReMA PAC Leadership Council. That access can make the lawmakers aware of how their agendas will affect the scrap recycling industry. As Johnson puts it, the PAC makes recyclers the industry’s storytellers—not those who are on the other side of a given issue. ISRI’s members should be the ones to say why export controls are a bad idea for all parties involved (not just scrap recyclers), or why the 1099 provision in the new health care reform law will increase business costs, making them less competitive. With ReMA PAC giving them access to lawmakers, they can do that.
The price of admission to a fundraiser is a contribution to the candidate for his or her re-election campaign. For an industry like scrap recycling, where a congressional district might have only a few ReMA members, that contribution can give ReMA an equal or greater voice than groups that are bigger, have more visibility or greater clout, and so on. “The PAC is really the lifeline for our industry,” says Jim Lawrence of Specialty Steel Products (Braddock, Pa.), chair of the ReMA PAC Leadership Council. Though he’d prefer a playing field that’s tilted toward the scrap industry’s interests, the PAC at least creates a level playing field, he says. “It’s absolutely critical.” Simms agrees. “The PAC is one of the most important benefits ReMA provides its members,” he says. “We need to support those legislators who have shown their willingness to support ISRI’s legislative agenda or who are in a position to do so.”
Some people incorrectly equate PACs with buying and selling votes, Johnson says, but lawmakers are “not going to jeopardize their political career for us. They’re not going to do that for anybody.” Ziebart concurs. “It’s not even realistic to talk in those terms. The PAC merely provides an opportunity to speak with a member of Congress in an undisturbed setting.” Lawmakers “know you’re a real player if you have a PAC,” Johnson says. “That’s what it really comes down to.”
What about meetings, letters, phone calls, and e-mails? Do those make a difference?
Yes, those are all important lobbying tools. But members of Congress and their staffs have heavier workloads than ever, which increasingly remove them from the realities that businesses face, Ziebart says. They attend multiple committee meetings, manage heavy travel schedules, and deal with a high volume of e-mail, making it harder for them to reply to every letter they receive. This means that businesses trying to petition for or against an issue find it harder to schedule a meeting with them. In addition, open-government laws have made it much more difficult for constituents to interact with members of Congress and their staffs, Johnson says. “In the old days, you could take them to lunch,” and during the lunch “you could discuss your issues and encourage them to come out to your facility—on your dime—and show them what you do. We can’t do that anymore,” he says—paying for meals or trips is no longer allowed, for the most part. That’s where the PAC plays a role. “A PAC provides an opportunity—generally around a meal—for a member of Congress to sit down for a focused discussion to hear how your industry is interwoven with the American economy, how it directly affects jobs in [his or her] district, how overreach by Congress could adversely affect [your] industry, and what that means for jobs, infrastructure, and the economy,” Ziebart says.
“If you don’t have a PAC, and you don’t go to these fundraisers, it is possible to do this work, but it’s much more difficult, and you likely don’t get the same attention,” Johnson says. Every association, company, and interest group wants time with legislators. “You try and work your way up through the congressional office” by convincing a succession of legislative staffers that your group or issue is important enough that the lawmaker should meet with you. “You can start at the very bottom with an intern, a legislative correspondent, or, if you’re lucky, at the legislative assistant level; move up to a legislative director, then to the chief of staff, and finally to the congressman,” Johnson says. “The more important the member of Congress is, the harder it is to do this.”
Hosting or attending a fundraiser reverses the order, he says. At the event, “you tell the candidate who you are and what some of your issues are,” Johnson says, “then they typically invite you back for further discussion with them and their staff.” That invitation gives you priority status, so to speak. The official indicates his or her interest to the chief of staff, and at that point, the education process begins with the legislative assistant and the legislative director. The difference, however, is that “they know their boss wants to know about this issue, so you get quality time,” Johnson says.
As a former political fundraiser, Ziebart can attest to the importance of these meetings. “I used to solicit PACs for contributions. I saw how an effective PAC—regardless of its size—could have a measurable impact on a candidate,” he says. Lawmakers would “enter a meeting thinking they knew everything about a topic and then leave saying, ‘I had no idea it was that bad,’ or ‘What we’re doing isn’t on the right track.’”
How does ReMA PAC fit in with ISRI’s other lobbying efforts?
Though it’s an essential lobbying activity, attending a fundraiser doesn’t guarantee that you get an official’s ear. “There could be five people there, or there could be 50 people,” Johnson says. “Just giving money doesn’t get their attention. Our single contribution doesn’t get them re-elected. They have to do lots of things for lots of different people.” That fundraiser is just one point of contact among many, he says. “You build a relationship with them in many ways.”
ISRI prefers to combine PAC and grassroots activity in its relationship-building efforts. At a fundraising event in Washington, Johnson says he will give the elected official a list of ReMA members who are his or her constituents, but even better is to bring one or more of those constituents to the event. “When I do that, I own the event,” he says. “I have a constituent, a business owner, an employer”—and a potential voter—who can present ISRI’s case. “Then the lawmakers pay attention to you,” Johnson says. “They ask, ‘How can I help you?’” The PAC provides access; the grassroots contact gives them a reason to care. “You need both,” he says.
And you need to continue building the relationship over time. “We have members who go to their elected officials’ fundraisers to bring up issues continually and let them know we appreciate what they do for us.”
Without that grassroots contact, “if we went in there, gave a member of Congress money, and told them who we are and what we do, but we didn’t have members in their district whom they cared about, they’d be polite to us, they’d listen, and that might be it,” Johnson says. “You want to raise your voice high enough to make them interested in you.” And it’s a two-way street, he says. “When ReMA members come in for the congressional fly-in, members of Congress are going to be there to meet with you because you helped them out.”
Which officials, candidates, and parties does ReMA PAC support?
Johnson says he receives 25 to 100 fundraising requests a day, depending on the election cycle. “We have to put on the blinders; we only have so much money. We use it very, very carefully and in a very, very targeted way.” Typically, ReMA PAC contributes to incumbent elected officials, not challengers or political parties. “We’re risk-averse,” Johnson says. “Most challengers don’t win.” Occasionally, however, ReMA PAC has supported candidates who have shown the potential to win their election and who have made the case that they strongly support recycling.
Beyond that, the PAC follows a simple strategy, Johnson says. It monitors certain congressional committees and subcommittees based on where the recycling issues fall and targets the chairs and ranking minority members of those groups, attending just a few events each month. Though many PACs are partisan in their contribution patterns, ReMA PAC is notably nonpartisan. It decides whom to support solely on the individual’s past support of the industry or potential to affect the industry in the future. “We know those legislators who support our fight,” Simms says.
ISRI members can make suggestions about whom the PAC should support. When they do, Johnson suggests they give a personal contribution as well. “There’s more power when you couple the PAC contribution with a member contribution.” The amount ReMA PAC gives each year varies widely, he says. “Last year, it was $45,000; other years it was more than $100,000.” The price to attend a fundraiser also varies widely—from $500 to $5,000, with most between $1,000 and $2,500. “The more you know the recipient, the more it’s negotiable,” Johnson says.
How can I or my company contribute to ReMA PAC?
The regulations governing corporate trade association PACs such as ReMA PAC are different from those that apply to corporate or other PACs, Ziebart says. ReMA can solicit contributions only from executives and administrative employees affiliated with ReMA member companies that are PAC-authorized. Individuals who choose to contribute to the PAC can give any amount up to $5,000 a year. “It has to be a personal contribution, not corporate money,” Johnson says. “Corporations can pay for [the PAC’s] administrative expenses, but none of the money can go into the fundraising system as a contribution” to a candidate or official. The PAC can accept unsolicited contributions from an hourly employee or from someone who works for a company that’s not PAC authorized, Johnson adds.
How does my company become PAC authorized?
To become PAC authorized, a company director or officer must fill out and sign a form (available at www.isri.org/isripac) that gives ReMA PAC permission to solicit the company’s executives and administrative employees. (By law, the PAC cannot solicit contributions from hourly workers or people who oversee union workers.) The company can give that permission for one or multiple years, but “a company can only [authorize] one trade association PAC” at a time, Johnson says. The PAC authorization form is not a pledge form—signing it does not obligate anyone to contribute to the PAC.
Getting ReMA member companies to sign PAC authorization forms has been an uphill battle, say Johnson and the volunteer leaders. Though Lawrence would like 100 percent
of ISRI’s membership to be PAC authorized, the PAC Leadership Council’s goal is to have at least 50 percent authorized by this year’s ReMA convention, April 5-9. “We’re nowhere near that,” Lawrence says. Once a company becomes PAC authorized, a PAC representative will call and solicit donations from those eligible to make them. The best fundraising approach is “peer-to-peer contact from people who contribute themselves,” such as ReMA PAC Leadership Council members, Johnson says.
What’s the relationship among ISRI, the PAC Leadership Council, and ReMA PAC?
By law, ReMA PAC is a separate legal entity that ReMA controls. Its funds, which are used only for political contributions, are kept separate from ISRI’s funds. ISRI—through Johnson—directs ReMA PAC on a day-to-day basis with the assistance of the PAC Leadership Council. ISRI’s chair, John Sacco of Sierra Recycling & Demolition (Bakersfield, Calif.), restructured the council, which now consists of ReMA chapter presidents, executive officers, and other interested ReMA members who volunteer to serve. Though council members must work for PAC-authorized companies, they do not need to donate to the PAC themselves. Members serve for a minimum of two years. The council’s primary role is to convince companies to become PAC authorized and solicit money for the PAC. ReMA has developed general contribution guidelines for the PAC, which the council approved.
Can ReMA PAC solicit contributions at ReMA events?
The same regulations that govern who can ask for or make contributions also spell out how, what, and when ReMA can communicate about the PAC. At chapter or association meetings—unless everyone at the meeting works for a PAC-authorized company—ISRI can ask only for PAC authorizations, not contributions. “We can tell our members about what a PAC is and what [ISRI PAC] has accomplished, but that’s about it,” Johnson says. In terms of accomplishments, for example, he points to the PAC’s role in getting Congress to authorize accelerated depreciation for the purchase of recycling equipment. From 2005 to 2008, the PAC identified political leaders who dealt with tax issues such as Sens. Max Baucus (D-Mont.), Tom Carper (D-Del.), and Chuck Grassley (R-Iowa), and Rep. Bill Thomas (R-Calif.). By attending fundraisers in their honor, ReMA members and staffers had important conversations on the issue that Johnson believes helped get the legislation passed.
What’s ReMA PAC’s fundraising goal?
The more funds the PAC has to work with, the greater its reach. ISRI’s goal is to maintain a balance of at least $100,000 in the fund, Johnson says. “PAC bank balances are public information, and all legislators know which PACs have big balances,” Lawrence says. “This has a huge impact as well.” He’s concerned that ReMA members don’t appreciate the importance of lobbying at the federal level. “Our members don’t always recognize that what happens in Washington could have a profound impact on their businesses,” Johnson says. Thus, some members contribute on the local level—even to federally elected officials—but not to the PAC. “This is a very common problem with D.C.-based associations that represent small and family-owned businesses,” he says.
ISRI members must understand how federal legislation could harm their businesses and the recycling industry, Simms says. “If we don’t have access to Congress, it could be detrimental.” ReMA PAC contributors are “donating for the survival of our industry,” Lawrence says. “If we don’t help [federal lawmakers], we’ll be legislated out of business.”
Diana Mota is associate editor of Scrap.
ISRI’s political action committee is an essential part of its federal lobbying efforts, but strict federal election rules restrict the PAC’s ability to communicate with and raise money from ReMA members.