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Shivaram Rajgopal New research shows that the annual payoff to a dollar of political influence seeking is at least 20x. Only 15% of companies were forced to report whether they created the jobs promised by them to receive state subsides K Street… Today’s Dealbook column in the New York Times highlights increased investor scrutiny of companies’ political donations. Gary Gensler, the new SEC chief has suggested that the SEC should consider corporate political spending disclosures. There are strong evidence-based reasons for why he’s right.
As of now, there is no requirement that companies publicly disclose (i) contributions made to political parties, candidates, committees; (ii) money given to 527 groups (the IRS designation for political action committees (PACs)) to influence the election of political candidates and sway votes from elected officials; (iii) funds paid to trade associations and section 501(c)(4) social welfare organizations that the recipient can use for political purposes; and (iv) payments made to influence ballot measures.
If such data is missing, how does anyone assess the payoffs on political rent seeking? As it turns out, tracing both a company’s investments in political influence seeking and the associated payoffs is really difficult. Focusing on just investments first, my co-authors, John […]