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Firms that Disclose Campaign Donations Are Richer, Says New Report

Firms that Disclose Campaign Donations Are Richer, Says New Report

 

Last year, when the Supreme Court infamously ruled that corporations could freely (and secretly) invest in “electioneering campaigns,” Justice Kennedy wrote that the only way that this could be good for democracy is if companies were required to disclose to whom they were giving. Though politicians may not be willing to force disclosure anytime soon, it looks like plain old dollars and cents might. According to a new report jointly released by Public Citizen and Harvard Law School, companies that disclose where they put their money politically are simply worth more.

In the report, called “Fulfilling Kennedy’s Promise,” the researchers compared the profits of S&P 500 companies that disclose where they give versus those that keep it secret. They found “that companies with pro-disclosure policies are generally more valuable” compared to those that have anti-disclosure policies. In a Washington Post op-ed, the authors of the study suggest that this is likely because disclosure makes the company more responsive to shareholders, who in turn make sure that the company is spending the money wisely.

Though the report only makes a correlative claim (and not a causative one), the authors rightly think that this is enough to push for SEC regulation forcing disclosure. Since companies that are disclosing what they are doing are making more money, it’s hard to argue that regulation would hurt business. On the contrary, this kind of policy could not only improve the function of American democratic institutions, but also align with the interests of business owners. It’s a rare win-win.

With unprecedented sums of money gushing into campaign coffers, the least that regulators could do is let ordinary voters know where that money is coming from. If the SEC takes up the charge put forth in this report, it will also let ordinary shareholders know what CEO’s are doing with their money politically. Indeed, this would force the powerful to be accountable to those who support them – both politically and monetarily. And heck, since reform would also help corporations, it actually has a shot at happening.

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Photo credit: wadem's Flickr stream.

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18 comments

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12:48AM PDT on Sep 11, 2011

It is an outrage that corporations do not have to disclose their political donations. I am hating on the Supreme Court Justices that ruled in favor of that and would like to see them thrown off the bench!

7:53PM PDT on Sep 9, 2011

Thank Citizens United and the American Legislative Council Exchange. Capitalist democracy is a contradiction of terms...capitalism relies on the potential for exploitation. Nobody votes to be exploited. Welcome to America...owned and operated by the richest 2%. http://www.alec.org/AM/Template.cfm?Section=Home

11:53AM PDT on Sep 9, 2011

!00% of voters on this subject think disclosure is the best policy. WOW!

9:25AM PDT on Sep 9, 2011

Money should not be used to buy our votes...it should be illegal

9:07AM PDT on Sep 9, 2011

Seems it may not be companies we should fear. It's the individuals that inherited the money we should fear. Right Koch brothers?

3:56PM PDT on Sep 8, 2011

Get the money back out of politics. TV and newspapers should be donating air time. That way we wouldn't be seeing year and a half long campaigning. You HAVE to be a Millionaire or be owned by one to get elected. All we serfs get to do is vote from amongst the people the rich picked out for us.

3:54PM PDT on Sep 8, 2011

Oh For chrissakes Jeffery. The poor have no voice on the media The rich OWN the media…..they control the voice.

3:26PM PDT on Sep 8, 2011

The Koch brothers have wealth 2nd only to Bill Gates..Estimated to be 44 Billion...
At the Kochs secret conference in july. Vale, CO...A Koch brother said, This will be the war of all wars!....motherjones/kochbrothers audio if you want to hear the rest of this villains speech,,,,

2:26PM PDT on Sep 8, 2011

ah enlightenment at last!

2:08PM PDT on Sep 8, 2011

Free speech only for the poor!

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