The honorary Scrooge of this year's Christmas is probably Wal-Mart:
U.S. companies, forbidden to give money directly to political action committees, are taking advantage of controversial federal rules allowing them to ask employees to do it for them in exchange for matching charitable donations.
It’s legal and gives businesses from Wal-Mart Stores Inc. to Coca-Cola (KO) Co. to Hewlett-Packard Co. a way to fund their PACs, which direct money to political candidates. The matching contributions provide an incentive for employees, most of them managers, to contribute to the PAC.
Got it? So Wal-Mart management-level employees give money to pro-business political candidates (of both major parties) while Wal-Mart reimburses them by giving to charities on their behalf. But wait! There's more:
Employees receive no tax deduction for the donations, as they do by giving to a charity directly. When soliciting employee contributions to PACs in exchange for charitable donations, companies typically say they want to increase voluntary participation in the political process and support pro-business candidates. Many companies offer a one-for-one match and donate the money to a charity of the employee’s choosing. Coca-Cola and HP both do this.
Wal-Mart goes further. It offers a two-for-one match, and the contribution must go to the Associates in Critical Need Trust, or ACNT, a charity the company started in 2001 to help its own store workers facing financial distress. Wal-Mart gave the ACNT about $3.6 million in double-matching funds in the year that ended January 31, according to an audit of the charity’s financial filings.
“It’s rare for a corporate PAC’s charitable match program to be restricted to a charity that the corporation wholly controls and finances,” Laurence E. Gold, an attorney at Trister, Ross, Schadler & Gold, a Washington law firm that handles campaign-finance issues, said in an e-mail.
Bolds are mine.
All that sounds stinky to me. The problem? Employees are persuaded to both support certain candidates which might be better for Wal-Mart than for a particular employee and then they are persuaded to make up the shortfall in the wages Wal-Mart pays its floor-level workers. A win-win for Wal-Mart.