What do companies get in return? Researchers have found that companies with high lobbying expenses outperform both benchmark companies and companies that spend nothing on lobbying. As for contributing to politicians’ campaigns, in studying 25 years’ worth of corporate political contributions, academic researchers recently found that the average company reaped $156.6 million more in annual compounded returns per year compared with noncontributing companies with similar risk characteristics. But it’s not all good news: according to a study from a professor at the University of Minnesota, increased campaign contributions correlate to increased litigation risk. From 1996 to 2005, 13.4 percent (222) of public companies that donated to political campaigns were sued by the Securities and Exchange Commission for alleged accounting and auditing violations, or in class-actions. That compares with 8.4 percent of the total 11,825 public companies sued for the same reasons over the same period.
A survey of 255 directors of Russell 2000 companies conducted by Mason-Dixon Polling & Research found that corporate boards have mixed feelings about political contributions. Two out of three directors said that political advocacy and spending don’t give their companies or industries “favorable legislative, regulatory, or tax treatment.” Yet 63 percent agreed that “effective and active political advocacy by our industry, including fund-raising and spending, is essential to our industry’s competitiveness and bottom line.”
So how much corporate money is being raised by the current Presidential candidates? According to the Center for Responsive Politics, as of early September, Obama had received $90.3 million from companies in10 business sectors, compared with $61.2 million for McCain. As for contributions from finance chiefs, in an analysis of data from Congressional Quarterly’s Money Line, CFO found that 144 donors who listed their occupation as “CFO” or “Chief Financial Officer” contributed a total of $242,865 to McCain in the 2007–08 election cycle (as of July 31). Over the same period, CFO found that Obama had collected $446,826 from 316 such donors. — Kate Plourd