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Disguised Contributions in the Channels of Corporate Political Spending

42 Pages Posted: 13 Jan 2016  

Adam Fremeth

University of Western Ontario - Richard Ivey School of Business

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business

Brandon Schaufele

University of Western Ontario - Richard Ivey School of Business

Date Written: January 11, 2016

Abstract

Widespread dissatisfaction with corporate participation in elections persists despite strict regulations. Exploiting within firm-cycle cross-candidate variation and across firm-cycle variation, we demonstrate that corporate spending on US elections exceeds disclosed campaign contributions. Firms constrained by existing campaign contribution limits spend an additional $549,000 on lobbying per election cycle, an amount more than 100 times the contribution limit. Constrained firms also have chief executives that contribute more to politicians and firm foundations that make larger philanthropic donations. While legally permitted, these expenditures may be interpreted by the public as corrupt disguised contributions according to the Supreme Court’s landmark Buckley v. Valeo decision.

Keywords: Campaign finance, corporate political activity, election law, US Supreme Court

JEL Classification: D72, D73, K39

Suggested Citation

Fremeth, Adam and Richter, Brian Kelleher and Schaufele, Brandon, Disguised Contributions in the Channels of Corporate Political Spending (January 11, 2016). Available at SSRN: https://ssrn.com/abstract=2713969 or http://dx.doi.org/10.2139/ssrn.2713969

Adam Fremeth

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

Brian Kelleher Richter

University of Texas at Austin - Red McCombs School of Business ( email )

2100 Speedway
B6500, CBA 5.250
Austin, TX 78712
United States
512-232-6751 (Phone)

HOME PAGE: http://briankrichter.com/

Brandon Schaufele (Contact Author)

University of Western Ontario - Richard Ivey School of Business ( email )

1151 Richmond Street North
London, Ontario N6A 3K7
Canada

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