Corporations reducing campaign spending but other trends suggest intensification
A new study has found that corporations have instituted a number of policies to reduce campaign finance spending while the number of corporate boards overseeing spending has increased, suggesting more corporations with an interest in political spending are intensifying their efforts.
A press release for the report explained the shift. “While many people assume that strong disclosure and governance practices will reduce corporate political spending, the data show that’s far from a foregone conclusion,” said Lukomnik, executive director of the IRRC Institute, one of two institutes that conducted the study. “Indeed, on a revenue-adjusted basis, companies with greater board involvement in the process actually spend more.” The study found that companies with board oversight of political expenditures spent about 30 percent more in 2010 than those without such explicit policies.
The two trends seem to be going hand-in-hand as attention to company spending has swelled and as companies have found themselves with unlimited donation-limits to 501 (c) issue groups at their disposal.
“It stands to reason that the boards of highly regulated companies would both be more concerned with such spending, and could view such spending as a necessary cost of business,” added Lukomnik.
The report, conducted by the Investor Responsibility Research Center (IRRC) Institute and the Sustainable Investments Institute (Si2), is the most comprehensive study of corporate political spending to date, putting in perspective some of the effects of last year’s infamous and still controversial Citizens United Supreme Court ruling. It provides one of the first comparative benchmarks for the governance and political expenditures of the S&P 500.
Some key findings from the report:
65% of the S&P now identify who at the company is responsible for making political expenditure decisions, up from 58% last year.
There is a trend towards more oversight and more “no spending” policies: 77 companies now say they will not use independent expenditures, up from 58 in 2010.
In addition, the study uncovered inconsistencies between companies’ stated political expenditure policies and what is actually spent.Fifty-seven of S&P 500 companies state they will not make political contributions, up from just 40 in 2010. But an in-depth search of federal and state records shows that only 23 of these companies actually refrained from giving to candidates, parties, political committees and ballot measures in 2010.
Only 14% of S&P 500 companies actually give a numerical report on how much of their trade association dues are spent for political purpose.
The analysis also tallies what S&P 500 companies spent — some $1.1 billion from corporate treasuries in 2010. Broken-down, that figure included $979 million for lobbying at the federal level.