The recent whopping increase in corporate cash for lobbying and political campaigns raises the question: does it pay off? If so, for whom? A study by John C. Coates, a Harvard Law professor, examined the effects of Citizens United and corporate giving to political causes by the S&P 500 companies.
Coates looked at the S&P 500 companies from 2000 into 2011 and found that for highly regulated and government-dependent companies, e.g., banking and defense, investing in politics did add value for shareholders. But for the vast majority of companies, added political giving lowered the relative stock price. Who gained? CEOs personally. Corporate largess correlates with CEOs’ using corporate jets and snagging plum political posts after retiring, for instance.
Does corporate political money contribute to the environment and society generally? That’s another study, but we think we know the answer.Tags: Lobbying, Spring 2012