Two recent investigative news reports, one in North Carolina and another in District of Columbia, provide useful examples of how major campaign contributors often end up receiving substantial subsidies or special tax treatment.
The News & Observer
in North Carolina published a series of articles called “
Missing Money
” that examined the state’s tax subsides. One of the
articles
looked at ties between lawmakers and subsidy recipients. For example, two large hog and poultry processors each contributed $100,000 to a state senator who introduced a bill making the materials they purchased to build their animal housing exempt from sales taxes. Although the contributions were far in excess of legal limits, the processors were not prosecuted.
WAMU, an NPR affiliate in the District of Columbia, has begun a series of reports called “
Deals for Developers
.” The “Day 1” part exposes connections between political campaign contributions and subsidies.
The investigation shows that one-third of the $1.7 billion in public money paid out over the last decade has gone to the ten developers who contributed the most to local political campaigns. In total, those who received subsidies contributed more than $2.5 million and received subsidies worth some $641 million.
To avoid the city’s limits on campaign donations, the radio station found that developers contributed money through multiple shell companies as well as their employees and family members. Sadly, only a small fraction of the subsidies, about five percent, went to the neediest neighborhoods in the city. (Make sure to check out the station’s
table
of campaign contributions and subsidies and an
infographic
examining the connections.)
These two investigations were possible because of the growing transparency of economic development subsidies. North Carolina has done well on Good Jobs First transparency
reports
and Washington, DC not too long ago started
disclosing
its subsides. We hope to see similar investigative reports coming from other parts of the country, but for now we congratulate
The News & Observer
and WAMU on their exceptional work.