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Bailed Out Firms Spend Millions on Political Causes, Federal Lobbying

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FILE: An American flag flies in front of the General Motors Global Headquarters in Detroit, Mich. (AP)

Several companies that escaped financial failure two years ago through massive taxpayer-funded bailouts are spending millions of dollars to make donations to political causes and even some candidates' campaigns.

General Motors, Chrysler and Citigroup are just three of the biggest bailout recipients who have continued to remain politically active, through their political action committees, federal lobbying or direct donations to the pet projects of lawmakers.

The potential public relations disaster for firms spending big dollars on political causes and federal lobbying after being extended a taxpayer lifeline has led some, such as AIG, Fannie Mae and Freddie Mac, to suspend their political activities until they pay the government back in full.

Other companies, however, defend their political engagement by saying their political action committees are voluntary groups that employees use to support political causes, that their federal lobbying is necessary to keep Congress informed of their mission, and that donations to pet projects are going to a good cause.

But critics say they doubt the logic.

"There are different types of contributions but they're all under the same umbrella to influence the political process," said Dave Leventhal, a spokesman for the Center for Responsive Politics, an advocate of transparent government. "What GM is trying to do is largely the same with all of them: gain access to politicians, trying to build relationships. It goes back to the idea these are all avenues of political influence."

Leventhal said making donations to charitable foundations is "just one of many different ways a company or top employees can attempt to influence the political process."

General Motors has spent $4.2 million on federal lobbying efforts, which puts it on pace to match its tally of $8.4 million in 2009.

GM also gave $41,000 to groups associated with lawmakers this year, a spokesman told FoxNews.com. Most of that money, $36,000, went to the Congressional Black Caucus Foundation, spokesman Greg Martin said, citing a disclosure form the company released last week.

"We're running the business the best way we see fit," Martin told FoxNews.com., adding that the GM should remain engaged with lobbying to keep up with the competition. "We're making real progress." Martin noted that sales were up in the first quarter and they're expected to be up for the last quarter too.

"That's the quickest way to repay the taxpayers and that's what we're doing," he said.

Martin added that the company has "historically given" to the Congressional Black Caucus and suspended its giving to its charitable foundation when it was "right in the heart and thick of bankruptcy proceedings."

Taxpayers own 61 percent of GM as part of an arrangement in which the federal government gave the company about $50 billion in aid during its bankruptcy proceedings last year. GM has repaid $6.7 billion of the money, and the balance was converted to the ownership stake in the automaker.

GM isn't the only company to take bailout cash and then contribute to political campaigns.

Chrysler, the other Detroit automaker to get bailed out, spent $1.2 million on lobbying this year, nearly half of the $3.12 million it spent last year. Chrysler has given back $2 billion of the $11 billion it has received from the government.

"Chrysler continues to devote company resources to educate policymakers about the company and the future of the automotive industry," the company said in a written statement. "There continues to be significant demand for education and information regarding Chrysler from legislators and government officials.

"These include responding to requests for plant visits, explaining significant company decisions and preparing for various congressional hearings. All of this is lobbying under the law."

Chrysler and GM no longer have active political action committees. And Chrysler said it has stopped making political donations outside of the PAC.

"For right now, that's our operating procedure," Chrysler spokeswoman Linda Becker told FoxNews.com, who said the company was "erring on the side of being cautious."

Before Chrysler deactivated its committee, it last year spent $3,000 directly on federal congressional campaigns -- $2,000 to Sen. Arlen Specter, D-Pa., and $1,000 to Sen. Robert Bennett, R-Utah.

Leventhal said he's not impressed.

"We've seen this before," he said. "There are plenty of companies that have received government subsidies of one form or another who perhaps slowed their political giving for whatever reason but are now in the game again."

He added that while it is "extremely difficult to track, dollar for dollar, the taxpayer money being used to influence the political system," it's clear that these companies are "quite active in the political influential arena."

Citigroup, which has returned $31 billion of the $45 billion it received from the government, spent $3.03 million on federal lobbying this year. Last year, the financial institution spent $5.56 million.

"Citigroup employs hundreds of thousands of people and they, along with our customers and shareholders, deserve to have financial experts advocating on their behalf," Citigroup spokeswoman Molly Meiners said in a written statement.

"Our government relations department serves as a link between the business and government, providing industry expertise and advocating policies that shape the operating environment," she added. "Not a single cent of TARP capital has been used to support our government affairs activities."

The banking giant also spent more than $500,000 through its political action committee this election cycle. More than $300,000 went to federal candidates, including $7,000 for House Minority Whip Eric Cantor; $5,000 each to House Majority Leader Steny Hoyer, House Majority Whip James Clyburn, House Minority Leader John Boehner and Sen. Charles Schumer, D-N.Y.; $2,500 for Senate Minority Leader Mitch McConnell and $1,000 for Rep. Michele Bachmann.

"Citigroup's PAC is voluntarily funded by our employees with contributions from their personal money," Meiners said.

Some companies though have retired from the political arena. Fannie Mae and Freddie Mac have not spent money on federal lobbying since 2008. The U.S. spent $84 billion on saving Fannie Mae and $61 billion on Freddie Mac. AIG, which has received $48 billion of the $70 billion that the U.S. has committed, has not lobbied since 2009, when it spent $2.27 million. It also no longer has a political action committee.