Disguised Contributions to Political Campaigns: the Long Shadow of Corporate-linked Spending

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 around US elections greatly exceeds that disclosed formally as campaign contributions to the Federal Election Commission. Firms constrained by existing statutory contribution ceilings spend an additional $549,000 on lobbying per election cycle, an amount more than 100 times the prevailing limit. Moreover, constrained firms' chief executives personally contribute more to the same candidates and associated corporate foundations make larger targeted outlays on the margin. These legally permitted alternative forms of political expenditures--which are hidden in plain sight--may be interpreted by the public as disguised contributions the Supreme Court warned may corrupt politics in its landmark Buckley v. Valeo decision affirming limits and the importance of transparency.