Dangerous Liaisons

Make No Mistake

To keep your enthusiasm in check, caution is the key. Here are some things to consider:

  • Don't coerce your employees to volunteer or make contributions. Consider what happened when a Chicago telecommunications company pressured employees to buy tickets to a political fund-raiser. A supervisor circulated a memo urging them to buy tickets and informing them that the company would keep track of who did. The memo included thinly veiled threats about the employees' future employment if they failed to attend. The company raised $113,125--but had to pay a $150,000 penalty for violating election laws.

Your company can legally urge stockholders and management-level employees to support a given candidate or ballot issue if you think a particular election result is in the interest of the business. "The federal government doesn't want to restrict companies from advising stockholders on matters in the interest of the company," says Steven Baron, a litigation attorney with D'Ancona & Pflaum in Chicago. "It's the nonstockholder employees you have to worry about."

If you want to give your rank-and-file employees a chance to sign a petition, follow the example of an Omaha, Nebraska, company that set up a table in the company cafeteria to allow employees to sign a petition on a tax issue that would benefit the company. The company circulated a memo stating the company's strong support for the amendment and describing the opportunity to sign the petition. The people collecting signatures weren't company employees, so everyone could feel comfortable supporting or not supporting the initiative. It's also important not to give anything of value in exchange for a signature, including perceived rewards.

  • Be sure to report the value of in-kind contributions. If you host a fund-raiser on your business's premises, the value of food or drink counts toward the campaign limit (unless it's incidental as defined by the FEC). It should also be reported to the FEC by the candidate's campaign. If you're in the food or beverage industry, you can provide your goods to a federal candidate at a discount as long as the total doesn't exceed $1,000 per campaign. The campaign should also pay at least a nominal fee for using the facility. (Federal law does allow the free use of a place of business for a campaign event under certain narrow circumstances.)
  • Establish a separate fund for whatever political contributions your state allows. Don't mix your business and political records. If you want to invest in a campaign, it's perfectly legal to spend an unlimited amount of money to benefit a candidate--and even run print ads or TV commercials--as long as you don't consult the candidate or campaign committee about your actions, Slabach says. Keep it completely independent, and use a fund separate from your business's.

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This article was originally published in the October 1998 print edition of Entrepreneur with the headline: Dangerous Liaisons.

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