Pacs Pack Congress With Business Backers

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Those interested in seeing small business supporters elected to Congress have two national avenues to channel their political contributions -- the National Small Business Political Fund and the National Federation of Independent Business Political Action Committee. Both political action committees (PACs) exist solely to elect and reelect small business advocates to Capitol Hill.

The two small business PACs share the same goal and, to varying degrees, both can boast of success. But striking differences exist in their methods and even philosophies. The NFIB PAC, relying on direct mail, is well established and fat; the Small Business Political Fund, using personal appeals by small business activists, is new and lean.

In the 1980 House elections, the Small Business Political Fund contributed to 10 races in as many states. It was the PAC's first foray into politics and its contributions reflected that newness. Each candidate received just $100 -- Little League amounts in Big League politics where PACs are permitted to contribute up to $5,000 to any candidate in an election year. But only 2 of their 10 candidates failed to win election. So to an extraordinary degree the fund backed winners.

The NFIB PAC supported the same 10. But the smallest NFIB contribution equaled the entire Small Business Political Fund campaign treasury. Indeed, NFIB support started at $1,000 and rose to $3,500 per candidate in House races, and up to $5,000 in Senate contests.

And the NFIB PAC didn't stop at 10. It gave to 223 House candidates in all but two states -- and to candidates in 22 Senate races. It spent a total of $217,000 in 245 federal campaigns, backing winners in 187 House and 16 Senate contests. (But even the NFIB's contributions seem paltry in comparison with those of large corporations: Federal Election Commission records show that in 1980 corporate PACs poured nearly $13 million into House contests.)

Perhaps the starkest difference between the NFIB PAC and the Small Business Fund is in how they select candidates for support. In congressional elections, the NFIB PAC uses a "70-40" rule to make preliminary decisions. The NFIB monitors congressional voting and issues an annual rating on each member's performance. Any incumbent who scores higher than 70% on the NFIB rating is automatically eligible for NFIB backing. Any incumbent whose rating is below 40% is automatically eligible to have NFIB's financial support go to his or her challenger. In most cases, the NFIB PAC does not get involved if the rating is between 40% and 70%.

The "70-40" rule, however, does not answer all questions. The NFIB advisory committee still must choose among candidates who qualify and then determine the extent of support. In 1980, the NFIB PAC did not give or withdraw support to every incumbent exclusively using "70-40." These types of judgment calls are made by the NFIB PAC committee, who parcel out PAC funds using a second rule: Contribute to those who need it.

What about challengers? Does "70-40" rule out support to candidates without established voting records? The answer is no. NFIB feels it has a "responsibility" to support challengers of low-rated incumbents, according to Dick Fisher, the PAC's executive director in San Mateo, Calif. The major factor in deciding whom to support is the ability of a challenger to wage a credible campaign, the probability of success, and his stand on small business issues. As an example, Fisher boasts about John Hiler, a young Indiana businessman active in NFIB affairs who toppled veteran John Brademas, a House Democratic Whip with a record the NFIB deemed terrible.

Decision-making at the Small Business Political Fund is not so structured. The PAC is not Washington-based, has no Washington staff, and issues no annual ratings to determine who's good for small business and who is not. Indeed, Utah Rep. Dan Marriott, who founded the fund two years ago, personally determined whom to support in 1980. In future years, an "advisory board," made up of small business owners and advocates, will make campaign decisions. Glenn Lewis, who directs the fund from Salt Lake City, explains the board will look at incumbents' records on small business issues. Challengers will be sent questionnaires and interviewed.

The two small business PACs also raise money differently. The NFIB relies on direct mail to its 500,000 members.

The fund, on the other hand, is only now moving toward direct-mail appeals. Before, it relied on what Lewis describes as "activists," who raised money through personal appeals to small business fat cats.

Do the PACs compete? It is a fair question, considering the circumstances that surround the fund's creation. Two years ago, Marriott, a conservative Republican who is not shy about issuing warnings against "creeping socialism," expressed dissatisfaction with the paucity of free enterprise advocates in Congress. And he stated so publicly. But his remarks were widely interpreted as criticism of the NFIB PAC -- then only a year old. Although Marriott's associates now insist their boss was interested only in joining the crusade, others perceived he wanted to run the whole show.

Marriott, stung by the criticism, is no longer directly running the fund, although he's been offered the title of honorary chairman. Lewis says this is an "accruate analysis" of the episode, but insists he is "unaware" of any competition that might linger between the two PACs.