Corporations make first political donations — and it’s not through checks

Corporations have made some of their first significant political donations since a 2010 court ruling permitted them — and surprisingly, they’re not monetary.

Some companies have discovered a more cost-effective way to support a favored candidate while ensuring their money is used wisely: giving hundreds of thousands of dollars of free goods or services, known as “in-kind” contributions.

Documents filed Monday with the Federal Election Commission (FEC) showed the activity propping up what has become a major super PAC supporting the presidential campaign of Rep. Ron Paul, Texas Republican. The technique has allowed small businesses to take a stand by doing what they do best.

As such, the first forays into political speech by corporations, especially those in the media, marketing, technology and communications fields, have been closer to actual speech than the massive check writing that critics of relaxed campaign finance laws feared.

Texas-based Smiley Media, an advertising and marketing firm, donated $421,000 worth of services at the behest of its CEO, Stephen Oskoui, to Endorse Liberty, a super PAC run by Paul supporters, providing online advertising for the group.

On the same day last month, Gunter Marksteiner, the CEO of WHDT World Television in Florida, donated $165,000 of airtime to Endorse Liberty and a similar amount to another Paul super PAC.

The concept makes sense: When a business donates services, political groups can get the most return for the least sacrifice from supporters because they are not paying the markup that comes with purchasing goods from a for-profit company. Business leaders give up only the actual cost of the goods or services provided.

It also allows executives to tap into spare resources, such as excess employee time or a warehouse of unneeded materials — or even create jobs and expand their company’s reach.

Control over investment

Any major donor wants assurance that his money will be spent wisely, Mr. Marksteiner said, and having the PAC spend the money at his firm meant he could ensure that by helping shape the advertisement.

“I said if you’re going to run TV ads, you’re definitely going to want long form, … and let’s make sure it’s something that can be reused.”

Unlike a bumper-sticker company that can give away its products for less than retail, the price for television political ads is fixed by federal broadcasting rules at a station’s lowest commercial ad rate, Mr. Marksteiner said, so anytime a network runs a political ad — whether purchased or donated — it essentially is giving away airtime at cost.

Partly because the CEO couldn’t give away airtime more cheaply than an outsider could get it, he made the donation individually.

“It became clear they hadn’t done this before and it was more expensive than they thought,” Mr. Marksteiner said of the PAC. “And I called them up and said, ‘Don’t worry about it. I’ll cover it.’ “

Then, putting on the hat of corporate officer, he did the group a favor by pulling some logistical strings, he said.

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