A research note--Democratic campaign contributions of Ceos: Jewish or industry interests?

Journal of Political and Military Sociology, Summer 2000 by Broyles, Philip A, Tomer, Lior

A RESEARCH NOTE - DEMOCRATIC CAMPAIGN CONTRIBUTIONS OF CEOS: JEWISH OR INDUSTRY INTERESTS?*

This research examines the 1972 and 1992 presidential campaign contributions of CEOs to determine whether business support of the Democratic Party reflected industry-based interests or the Jewish and southern backgrounds of business leaders. In both years, we find that industry sector has little or no effect on contributions to the Democratic Party when we control for Jewish background. However, region also had no effect on business support for the Democratic Party in these years.

BUSINESS SUPPORT OF THE DEMOCRATIC PARTY

Research by Ferguson (1986) and Domhoff (1990) has rekindled debate over which business leaders supported the Democratic Party in the 1970s and 80s. In their book Right Turn, Ferguson and Rogers argue that, until the mid 1970s, the Democratic Party was financially supported by the international sector of the business community (1986). This industry-based investor block, consisting primarily of capital-intensive manufacturers, investment banks, and real estate developers, emerged during the 1930s in response to conflict over international trade. Because capital-intensive manufacturers, financiers, and real estate developers were relatively insulated from labor costs, they joined labor unions in a Democratic New Deal coalition against less international and more labor-intensive firms that supported the Republicans. The coalition remained intact until the mid1970s when increasingglobal competition, energy costs, and federal spending slowed capital expansion and put capital-intensive manufacturers at odds with labor unions. Consequently, business support of the Democratic Party declined in the early 1980s as the New Deal coalition fell apart. A new industry-based block of Democratic-leaning businesses, composed of firms with "some direct, crucial tie ... to the American State," emerged by the early 1990s (Ferguson, 1995:299).

Ferguson's thesis rests largely on studies of the 1984 and 1992 presidential elections. In an examination of the 1984 election, Ferguson found that real estate developers and investment bankers supported the Democrats. However, the largest 30 multinational manufacturers, most of which were capital-intensive, did not. Ferguson suggests that capital-intensive manufacturers of the New Deal coalition had left the Democratic Party by 1984, whereas investment bankers and developers had not fully disengaged. In his later study of the 1992 election, Ferguson (1995) found that the Democrats were supported by a block of businesses consisting of firms dependent on the federal government in one way or another--federal contracts, regulation and so forth. This new industry-based block included tobacco, aircraft, oil and gas, transportation, computers, capital-intensive exporters, and investment banks (Ferguson, 1995).

Domhoff (1990) disputes Ferguson and Rogers' 1984 findings, arguing that it was the religious background of CEOs that accounted for their support of Democrats in 1984. In a reexamination of the 1984 data, he found that Jewish real estate developers and investment bankers were more likely to support the Democrats in 1984, not realtors and investment bankers in general. Domhoff (1972, 1990) argues that Jewish and southern business leaders have financed the Democratic Party since the early 19`* century. Jewish and southern businessmen were drawn to the Democratic Party for a variety of different reasons. The social values of Democrats have been more compatible with those of the Jewish community, and the courting of the Christian Right by Republicans has raised fear of anti-Semitism among many Jews. Southerners, though ideologically closer to Republicans than Democrats on many political issues, have supported the Democrats largely because Republicans opposed southern interests during and after the Civil War. Despite their differences in ideology, Southerners and Jews shared a common interest in challenging the hegemony of the Protestant dominated northern establishment, supported by the Republican Party. This fragile coalition was drawn apart gradually in the 1970s and the 1980s by civil rights, environmental, and labor issues, which put conservative, anti-labor southern businessmen in contention with Jews, labor leaders, and other liberal Democrats. Consequently, the southern faction of this coalition defected to the Republican camp, leaving Jews as the primary benefactors of the Democratic Party in the 1990s.

At the center of this controversy are two related issues. First, has recent business support of the Democratic Party primarily reflected the Jewish and southern background of CEOs or industry-based interests? Secondly, has business support of the Democratic Party changed since its decline in the 19$0s? To address these issues, we examined the presidential campaign contributions of corporate CEOs to the Democratic Party in 1972, and twenty years later in 1992. We chose the 1972 election because it provided a good reference point for corporate support of the Democratic Party prior to the party's major decline later in the decade. Moreover, the 1972 election was the first year there was complete disclosure of all major contributions to presidential campaigns and it was the last year that individuals were allowed to contribute unlimited funds to a federal campaign. Therefore, it is the only year in which unfettered business participation in campaign finance can be measured during the seventies.