Employers United: An Empirical Analysis of Corporate Political Speech in the Wake of the Affordable Care Act

38 Journal of Corporation Law 217, 2013

UGA Legal Studies Research Paper No. 2015-27

51 Pages Posted: 31 Aug 2012 Last revised: 2 Oct 2015

Elizabeth Weeks Leonard

University of Georgia School of Law

Susan Scholz

University of Kansas - Accounting and Information Systems Area

Raquel Meyer Alexander

Washington and Lee University

Date Written: August 30, 2012

Abstract

Is the Patient Protection and Affordable Care Act (ACA) bad for business? Did the countries' most prominent companies game the Securities and Exchange Commission (SEC) disclosure process to make negative political statements about ObamaCare? Immediately following the ACA's enactment on March 23, 2010, a number of companies drew scrutiny for issuing SEC filings writing off millions – and in AT&T's case, one billion dollars – against expected earnings for 2010 alone, based on a single, discrete tax-law change in the ACA. Congressional and Administration officials accused the firms of being "irresponsible" and using "big numbers to exaggerate the health reform's burden on employers." To further test the suggestion that these disclosures were politically motivated, we searched all publicly filed SEC real-time and scheduled filings for the quarter following the ACA's enactment. We identified 147 firms that issued SEC disclosures relevant to the tax-law change, writing off a total of five billion dollars. Our deeper analysis of these data amplifies the congressional committee's conclusion that the firms' disclosures were consistent with SEC requirements and financial accounting standards. A handful of firms account for the bulk write-offs, but the only evidence of political speech was by politicians. The episode has significant implications for government regulation of corporate speech and the integrity of the securities disclosure system, particularly as the remaining portions of the ACA are implemented.

Suggested Citation

Leonard, Elizabeth Weeks and Scholz, Susan and Alexander, Raquel Meyer, Employers United: An Empirical Analysis of Corporate Political Speech in the Wake of the Affordable Care Act (August 30, 2012). 38 Journal of Corporation Law 217, 2013; UGA Legal Studies Research Paper No. 2015-27. Available at SSRN: https://ssrn.com/abstract=2138828 or http://dx.doi.org/10.2139/ssrn.2138828

Elizabeth Weeks Leonard (Contact Author)

University of Georgia School of Law ( email )

225 Herty Drive
Athens, GA 30602
United States

Susan Scholz

University of Kansas - Accounting and Information Systems Area ( email )

1300 Sunnyside Ave
Lawrence, KS 66045
United States
785-864-7554 (Phone)
785-864-5328 (Fax)

Raquel Meyer Alexander

Washington and Lee University ( email )

204 W Washington St
Lexington, VA 24450
United States

Paper statistics

Downloads
78
Rank
257,708
Abstract Views
703