GSK will halt political gifts

Corporate donations will stop. Lobbying and other efforts to sway politics will go on

GlaxoSmithKline announced Monday that it will stop making political contributions as a corporation, a move designed to reduce appearances that the drug maker buys influence.

Although the step drew some praise from advocates who support reform of political financing, the effect will be limited.

GSK gave $585,425 to candidates this year, mostly in about 20 states where direct contributions are legal. Such giving is illegal in North Carolina, and federal law also prohibits corporations from donating directly to candidates.

"If this is the company's way of saying they're not interested in getting special access and trying to influence [lawmakers'] thinking through money, that's worth applauding," said Massie Ritsch, communications director for the Center for Responsive Politics in Washington. "But on a practical basis, this won't make a whole lot of difference."

For starters, GSK will continue other efforts it uses to influence politicians, including lobbying. The company spent $8.2 million on lobbying last year, according to the Center for Responsive Politics.

And GSK will still support a Political Action Committee run by its U.S. workers. GSK employs more than 5,000 at its U.S. headquarters in Research Triangle Park and other sites in the Triangle.

That PAC gave more than $1.5 million during the 2007-2008 election cycle, according to data from the Federal Election Commission. In North Carolina, the PAC gave about $40,000 to state candidates and political campaigns, according to filings with the State Board of Elections.

Also, GSK executives and employees can continue to contribute as individuals at the state and federal levels. Robert Ingram, GSK's vice chairman of pharmaceuticals, for example, is a prolific political donor. He recently contributed money to Republican U.S. Senate candidate Elizabeth Dole, the National Republican Senatorial Committee, the campaign of state Sen. Marc Basnight, a Democrat from Manteo, and others.

GSK's plan to stop tapping its own treasury for politics comes as the company is cutting other costs, and jobs. GSK eliminated 160 jobs at its Zebulon manufacturing plant this year and announced plans to cut 350 researchers in RTP and Philadelphia. The company is under pressure as generic versions hurt sales of its medicines and the slumping economy erodes health-care spending.

The decision also comes as health-care reform is likely to take center stage in Washington next year -- under a new Congress and president.

By ending its corporate contributions, GSK wants "to ensure that there is no implication whatsoever that corporate political contributions provide us with any special privileges," CEO Andrew Witty said in a prepared statement.

"As part of our overall drive to improve transparency in terms of our interactions with governments, political leaders and candidates for public office, we believe that stopping corporate political contributions is the right thing to do," he added.

Other drug companies, including GSK's larger rival Pfizer, have begun disclosing political contributions and, in some cases, requiring such giving to have oversight by the company's board of directors, said Bruce Freed, founder and executive director of the Center for Political Accountability in Washington.

One bigger issue is that GSK is likely to continue making political contributions through trade associations such as the Pharmaceutical Research and Manufacturers of America, a powerful industry group.

"A great deal of political activity is carried out by trade groups," Freed said. "That's a backdoor way for the company to continue influencing politicians."

Other companies also avoid contributing directly to candidates and campaigns, said Bob Hall, executive director of Democracy North Carolina. First Citizens BancShares of Raleigh, for example, has a PAC for its workers; but the corporation itself, which has bank branches in 17 states, does not make donations.

Even without direct donations, GSK "will still be a significant political player," Hall added.

GSK officials "obviously believe it's important to be engaged," said company spokeswoman Sarah Alspach.

The company won't stop its employees' PAC because it is independent and the workers decide how that money is distributed, Alspach said.

"We believe that a PAC is a right for employees to take part in the political process," she said. "We don't want to deprive them of that right."