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Auto dealers get what they pay for

Originally posted October 24, 2014; updated October 29

Note: This story has been updated to include data from campaign finance reports for the 7/21/2014-10/20/2014 period. There are a few other changes, too, identified in red.

Governor Snyder is catching flak for signing a bill tightening restrictions on who can sell cars in Michigan. And he should catch flak - Republicans are supposed to be defending free markets, not erecting barriers to innovation and free commerce. The law effectively prohibits Tesla from selling its electric cars directly to Michigan customers. A 2000 study said that direct distribution of automobiles could save $2,225 per vehicle. (Detroit Free Press, 10/23/2014)

 

The law shows lawmakers' gratitude to Michigan's auto dealers, who since 2010 have contributed $1,426,520 to Michigan politicians. From campaign finance reports downloaded from the Secretary of State's website, I count 1729 individual contributions to politicians since 2010. Here is a list of contributions made in the last 12 months.

 

None of the contributions went to the Rick Snyder campaign.

 

The money is handed out to politicians by the Auto Dealers of Michigan PAC (campaign committee ID 510354), which in the period 1/1/2013-10/20/2014 was the 24th highest spending PAC in Michigan, 11th among special interest PACs:

1   UAW

2,900,000

 
2  

Blue Cross/Blue Shield of Michigan

1,100,000

 
3  

Michigan Association of Justice

935,000

 
4  

Michigan Education Association

885,000

 
5  

Michigan Association of Realtors

786,000

 
6  

Michigan Beer and Wine Wholesalers Association

766,000

 
7  

Michigan Health and Hospital Association

712,000

 
8  

Michigan Regional Council of Carpenters

672,000

 
9  

DTE Energy

628,000

 
10  

Comerica Bank

560,000

 
11  

Auto Dealers of Michigan

531,000

 
12  

Michigan Chamber of Commerce

497,000

 

However, the Auto Dealers of Michigan PAC doesn't collect the money directly from the auto dealers. Payments from Detroit area auto dealers are collected by the Detroit Auto Dealers PAC (campaign committee ID 674).  Payments from outstate dealers are collected by the Michigan Auto Dealers PAC (campaign committee ID 634). Here are the contributions to these two groups by auto dealers in the last 12 months:

 

Detroit Auto Dealers PAC

Michigan Auto Dealers PAC

 

The only contributors to the Detroit Auto Dealers PAC are auto dealers; not so for the Michigan Auto Dealers PAC. In addition to dealers, there are insurance agents, bankers, and others who apparently have some connection to the industry. Here is a list. After the Detroit Auto Dealers PAC and the Michigan Auto Dealers PAC collect from the dealers (and the other interested parties), they pass the money on to the Auto Dealers of Michigan PAC.

 

As a reader pointed out to me when this story was first posted (October 24), the restrictions in the new auto dealer law are not going to keep Michiganders from buying Teslas. Anyone who can afford a Tesla can afford to go out of state to get it. And the auto dealers have been making big contributions to politicians long before Tesla came along, so there must be other advantages they are getting from Michigan legislators - at the expense of the rest of us. What might they be? The same question can be asked about the other special interest PACs on the above list. What do they want? Or what do they not want to lose? It would be nice to know.

 

Several years ago, I did analyses of the contributions and expenditures of two of the PACs on the above list: Blue Cross Blue Shield and the Beer and Wine Wholesalers Association.

 

Send comments to stevenrharry@gmail.com. Also let me know if you'd like copies of the campaign finance data (as Excel files) used to write this article. My phone number is 517-505-2696.

 

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