Nelnet contributed funds to congressional campaigns

Published: Sunday, January 28, 2007

Updated: Sunday, July 13, 2008 18:07

Nelnet officials defended their contributions to the political campaigns of two Nebraska congressmen who voted last week against a bill that could cut interest rates on student loans.

The legislation, approved by the House last week and awaiting Senate approval, could affect the profits of large private lenders, including the Lincoln-based National Education Loan Network, Nelnet.

Political Action Committee (PAC) - A term for a political committee organized for the purpose of raising and spending money to elect and defeat candidates.

* PACs can give $5,000 to a candidate committee per election (primary, general or special). * PACs can also give up to $15,000 annually to any national party committee and $5,000 annually to any other PAC. * PACs may receive up to $5,000 from any one individual, PAC or party committee per calendar year.

SOURCE: The Center for Responsive Politics

Nebraska Reps. Jeff Fortenberry and Adrian Smith, who both voted against the House legislation, received thousands of dollars in contributions for their 2006 campaigns from Nelnet.

Representatives from Nebraska's congressional delegation have strenuously objected to allegations that the votes of any of Nebraska's House representatives are influenced by campaign contributions.

Fortenberry has not been available for comment since Tuesday.

Nelnet officials said Congress plans to pay for the interest-rate cut by "squeezing the lender incentives that could otherwise be passed on to students." In other words, they worry the cut in interest rates could end up costing students more.

The officials also stressed their contributions to political candidates from both parties are essential to their participation in civic activities.

"We often give to those campaigns that share an interest in the public policy goals of Nelnet's industry," said Eric Solomon, spokesman for Nelnet's corporate office.

But the private student loan industry can have a stake in decisions made by elected representatives, said Luke Swarthout, a higher education lobbyist for the pro-consumer U.S. Public Interest Research Groups, because student loan program regulations can generate huge sums of money for a lender.

A say in the political process becomes even more necessary when a lender's profit margins might be directly influenced by congressional moves, Swarthout said.

"These tremendous (financial aid) subsidies are directly affected by congressional policy," he said.

"Campaign contributions and lobbying payments are seen as and treated as greater investments in greater return and greater revenue."

Like many companies in the U.S., Nelnet has what's called a "political action committee" or PAC, which is essentially a group designed to raise and spend money to support or oppose political candidates and issues.

Through the end of November 2006, Nelnet's PAC had received $241,578 worth of individual contributions.

Federal Election Commission reports show that approximately $26,000 of Nelnet-affiliated funds made it to the campaign chest of Fortenberry for his 2006 congressional campaign.

The Nelnet PAC contributed $10,000 directly to Fortenberry's campaign. Company employees, individuals with direct ties to Nelnet and other PACs receiving Nelnet funds contributed an additional $16,000.

Smith received $5,000 from Nelnet's PAC for his 2006 campaign.

Solomon said the company donated primarily to Republicans because they represent a majority of Nebraskans, adding that Nelnet does make donations to Democratic candidates.

But Swarthout said the Republican trend was strategically motivated because the party held a commanding majority in Congress until the last election.

"You prioritize your contributions to the people that have the most say," he said.

The following is a tally of the U.S. senators and representatives who have received money from Nelnet's political action committee. Members of the House are organized based on how they voted on HR5, the College Student Relief Act. If a congressional representative did not receive a donation from Nelnet's PAC in 2006, the most recent contribution is included. The Senate has not voted on the act yet. HOUSE

YES:

* Rep. Robert Andrews (D-N.J.); $4,500 in 2006 * Rep. Michael Arcuri (D-N.Y.); $3,000 in 2006 * Rep. Charles Boustany Jr. (R-La.); $1,000 in 2006 * Rep. Virginia Brown-Waite (R-Fla.); $1,000 in 2005 * Rep. James Clyburn (D-S.C.); $5,000 in 2006 * Rep. Thelma Drake (R-Va.); $9,000 in 2006 * Rep. Bart Gordon (D-Tenn.); $1,000 in 2006 * Rep. Rush Holt (D-N.J.); $1,000 in 2006 * Rep. Bob Inglis (R-S.C.); $1,000 in 2006 * Rep. Ric Keller (R-Fla.); $5,000 in 2006 * Rep. Dale Kildee (D-Mich.); $2,000 in 2006 * Rep. Randy Kuhl (R-N.Y.); $1,000 in 2006 * Rep. Tim Mahoney (D-Fla.); $2,000 in 2006 * Rep. Betty McCollum (D-Minn.); $1,000 in 2004 * Rep. Cathy Ann McMorris (R-Wash.); $3,000 in 2006 * Rep. George Miller (D-Calif.); $1,000 in 2005 * Rep. Steve Pearce (R-N.M.); $1,000 in 2004 * Rep. Edwin Perlmutter (D-Colo.); $1,000 in 2006 * Rep. Earl Pomeroy (R-N.D.); $3,000 in 2006 * Rep. Jon Porter (R-Nev.); $11,000 in 2006 * Rep. Thomas Edmunds Price (D-N.C.); $3,000 in 2006 * Rep. Timothy Ryan (D-Ohio); $1,000 in 2006 * Rep. John Tony Salazar (D-Colo.); $1,000 in 2006 * Rep. Michael Simpson (R-Idaho); $1,000 in 2004 * Rep. Betty Sutton (D-Ohio); $2,000 in 2006 * Rep. Patrick Tiberi (R-Ohio); $5,000 in 2006 * Rep. Greg Walden (R-Oregon); $1,000 in 2004 * Rep. C.W. Bill Young (R-Fla.); $1,000 in 2004 * Rep. David Wu (D-Ore.); $1,500 in 2006 NO: