Disguised Contributions in the Channels of Corporate Political Spending

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.