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Analysis: Foreign Firms Gain Influence with US Campaign Gifts

Foreign firms can make donations to American election campaigns if they have subsidiaries in the US. At least 17 German firms have contributed to the presidential race -- on both sides of the political fence.

Democratic and Republican Party emblems against a dollar background

Foreign donors cover both parties to ensure access to the future winner

The law is clear. Direct or indirect donations from foreigners in connection with elections at a national, state or local level are not permitted. Anyone who knowingly violates the law faces heavy fines or even jail time, according to the Federal Election Campaign Act (FECA).

It seems like that's all there is to say on the topic of campaign donations from non-Americans. But it's not. In the United States, there's no law without an exception.

What is forbidden for foreign residents without a Green Card is allowed for foreign companies. The requirement is that they have an American subsidiary that sets up a Political Action Committee (PAC) to collect donations. The PAC then makes monetary contributions to national, state and local candidates.

That's exactly what numerous international companies are doing during the 2008 presidential race. According to the independent Center for Responsive Politics, which discloses all donation activity on its Web site, www.opensecrets.org, some $11.4 million (9 million euros) have flowed through PACS founded by American subsidiaries of international firms.

Democrats and Republicans have benefitted nearly equally from PAC contributions associated with the subsidiaries of foreign companies.

Most foreign donors based in Europe

The lion's share of worldwide party donations comes from Europe-based companies, which contributed some $10.5 million to the US race. Firms based in North America (Canada and Mexico) donated $635,000 and Asian companies put 369,000 toward election campaigns.

Of the European companies, Britain takes first place with $3.7 million in election contributions. Switzerland and Germany follow with contributions of $2.5 million and $1.4 million, respectively.

The largest individual international donors are the US subsidiary of the Dutch consulting company KPMG, the American branch of Swiss bank UBS and the British pharmaceutical giant GlaxoSmithKline's US division.

T-Mobile Logo

T-Mobile USA is a generous subsidiary of Deutsche Telekom

The largest single German donor is T-Mobile USA, Deutsche Telekom's US subsidiary, with $347,000. A total of 17 German firms, including numerous DAX-listed companies including SAP, Siemens, Bayer, Deutsche Post and BASF, have contributed to election campaigns this year via their subsidiaries.

As is the case with other donors, German firms divided their funds relatively equally between Democrats and Republicans. That's the best way to reach their ultimate goal of influencing the future political decision-makers, regardless of which party they belong to.

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