News Column

Power PACs

March 2005, HISPANIC BUSINESS Magazine

Joel Russell

Republican Mel Martínez’s run against Betty Castor in Florida carried a final price tag of more than $23.1 million.
Republican Mel Martínez’s run against Betty Castor in Florida carried a final price tag of more than $23.1 million.

Hispanic political action committees (PACs) contributed over $1.8 million to candidates in the 2003-04 election cycle (see table, "Hispanic PAC Spending"), nearly triple the total from the 2000 presidential election, according to data from the Federal Election Commission (FEC). Still, Hispanic PAC activity represents only a trickle of money in comparison to the Hispanic voting population.

"Those [Hispanics] who have wealth have made the correlation between supporting candidates and economic development," says Massey Villarreal, chairman of the Republican National Hispanic Assembly (RNHA). "But when you look at a list of the big PACs, we don't have Latinos in that range yet."

Adam Segal, director of the Hispanic Voter Project at Johns Hopkins University, says the Hispanic-focused PACs with the most clout today are those affiliated with major political parties. "The ideology behind these partisan PACs is grounded in the interest of ensuring a line of qualified Hispanic candidates within the broader agenda of advancing the Hispanic community," he says. "These aren't citizens' PACs or upstart grass-roots PACs. That's sorely needed in the community – a membership-based PAC that has the strength of broad support."

Data from the FEC and the nonprofit Center for Responsive Politics confirm the partisan slant of large Hispanic PACs. Latino Alliance, the most active Hispanic PAC in 2004, gave 100 percent of its money to Republicans, while second-place Hispanic Democratic Organization and fourth-place Committee for Hispanic Causes BOLD gave all their money to Democrats.

Not all PACs report their contributions by party support, but an analysis of available data shows that in 2004, Republicans received 49.8 percent of Hispanic PAC money; Democrats received 48.7 percent. The final 1.5 percent was indeterminable with available information.

Besides parties, politicians themselves create PACs. For example, Governor Bill Richardson of New Mexico has Moving America Forward, a nonpartisan PAC for registering Hispanic and Native American voters. MAF spent $74,805 in the 2003-04 election cycle.

"We need more [PACs], and more will come to the table," says Larry Gonzalez, director of the Washington, D.C., office for the National Association of Latino Elected and Appointed Officials (NALEO). As Hispanic politicians learn to widen their appeal beyond bilingual education and immigration, other Hispanic PACs and individuals will provide more funding, Mr. Gonzalez believes.

"The reason there aren't more Hispanic PACs around is that it's not easy to start one," says Ray Durazo, chairman of the Latin Business Association in Los Angeles and a former registered lobbyist. The LBA used to have a PAC but it fell into disuse because of the complexity of electoral reports, tax filings, and similar administrative issues.

"The inherent problem with an organization like the LBA is we have a diverse membership," Mr. Durazo says, explaining a situation common to many Hispanic nonprofits. "We have traditional liberal Democrats to middle-of-the-roads to conservative Republicans. Who are you going to support while representing a broad cross-section of your membership? As a leader you have to make the call. Of course, everyone who puts money into it feels they should have some say in how the money is distributed."

Mr. Gonzalez cautions political donors against the illusion that they can show up at a dinner, give $500, and suddenly have access to Capitol Hill. Mr. Durazo advises people seeking that kind of contact to give directly to politicians' campaigns rather than through PACs. "Making individual donations increases your visibility and access. On the downside, it will cost you more money. Also, once you give money to a political candidate you'll be surprised to find your name in a lot of databases," he says.

Ed Romero, former ambassador to Spain, says donors should give to politicians based on issues without expecting a quid pro quo. "They might return your phone call," he says. "If you expect more, you're expecting too much."

Individual contributions are more difficult to track than PAC money, and no figures currently exist for 2004. But a preliminary search of the FEC database shows 20 prominent Hispanics giving nearly $730,000 in the 2003-04 period. Major donors include Florida's Fanjul family, former ambassador to Belgium Paul Cejas, Codina Group CEO Armando Codina, the Benavides family of Texas, MasTec chairman Jorge Mas, former Cabinet members Henry Cisneros and Federico Peña, and Alvarado Construction CEO Linda Alvarado.

The Center for Responsive Politics estimates that between 1989 and 2000, Hispanic individuals gave $47 million to candidates, parties, or PACs. About 57 percent of the money went to Democrats, while 41 percent supported Republicans.

For Hispanics looking to play a role in the political process, the 2004 election set the stage for a promising future. "There is a need for more Latino entrepreneurs to understand the value of giving," says NALEO's Mr. Gonzalez. "If your agenda is business and access to capital, then you need to get involved with that candidate or politician [who shares that agenda]."


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