Straw Contributors and Corporate Contributions

by - January 17, 2013

Corporations can engage in political activity.  But they must be careful how they do so; corporations still face restrictions, such as the prohibition on making contributions to federal candidates.  As we have seen, following a line of cases culminating in Citizens United, corporations may give unlimited sums to Super PACs.  They may also contribute to 501(c)(4) social welfare organizations.  However, even when corporations are permitted to contribute, how they contribute matters.

One of the more common mistakes made by politically active businesses is to reimburse employees for political contributions. Making a federal political contribution with someone else’s money is known as a conduit contribution and it is a federal criminal offense, though in practice the severity of the crime is highly dependent upon the amount involved and the nature of the conduct.  Many prosecutions of conduit contribution violations also involve other crimes, such as prohibited contributions from corporations or contributions in excess of individual contribution limits.

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