The AFL-CIO, cheered last week’s U.S. Supreme Court ruling in Citizens United v. Federal Election Commission — a landmark decision seemingly allowing unlimited campaign advertising by any corporation, trade association, or labor union. But the nation’s largest labor umbrella organization could find itself the biggest loser in the new political world order it helped create.
Unions have traditionally ranked among the nation’s largest political players. Corporate PACs already outspent labor union PACs by a four-to-one margin in the 2008 elections, according to Common Cause, but previous PAC rules at least allowed unions to be competitive. Now that could change. A Center for Public Integrity examination of recent financial reports reveals that unions may find themselves completely overmatched by the exponentially larger treasuries of the corporations they so often match up against.
In recent days, two of the largest AFL-CIO members have distanced themselves from their umbrella organization on this issue. Larry Cohen, president of the Communications Workers of America argued the ruling “will allow corporations to dominate the political process, just like they are able to dominate the workplace, undermining laws that are supposed to protect worker bargaining and organizing rights.”
According to their 2007 annual filings with the IRS, the AFL-CIO’s entire operating budget for the year was $156,576,611. The largest individual labor union, the National Education Association, spent $336,665,226 that year. And the United Auto Workers, who joined Cohen in their criticism of Citizens United, spent $245,779,230. The top ten largest unions by membership (according to The World Almanac 2010) spent just over $1.6 billion all totaled for that reporting period and their political action committees spent more than $103 million to aid pro-labor candidates in the 2007-2008 election cycle.
These figures seem large — indeed the Center for Responsive Politics lists labor unions as six of its top 10 most generous “Heavy Hitters” based on PAC donations since 1989. But not when compared to the financial muscle that corporations might unleash, under the court’s recent decision. Since corporations will no longer be required to collect PAC contributions in chunks of $5,000 or less per person in order to run ads in support or opposition to candidates, they can now spend as much of their corporate treasury as they wish. Fortune’s top ten corporations in the same 2007 period posted annual revenues ranging from about $168 billion to more than $351 billion.
In fact Wal-Mart, tops on the list, reported an annual profit for the period of over $11 billion. Exxon Mobil, a close second that year, took in $357 billion with nearly $40 billion in profit. Their political action committee spending in the 2007-2008 cycle totaled just over $3 million and about $811,000 respectively. The top ten corporations combined to take in $2.4 trillion and spent less than $8 million in PAC contributions. Their total profits for the year exceed $160 billion.
So what does this mean? It means that if a company like Exxon Mobil decided to invest just five percent of its profit in political ads, that nearly $2 billion sum would exceed the entire $1.6 billion annual operating budgets for the top ten labor unions combined.
With this kind of imbalance, labor unions could find themselves demoted to the electioneering minor leagues.
UPDATE 1/29/10: After publication, the AFL-CIO contacted us and requested we link to a letter they had written and had published on the website of The Nation. The letter outlines concerns they had about how their position on the Citizens United case had been characterized in a Nation story. The AFL-CIO shares some of the same concerns with this report from the Center. Their letter can be found here.
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