Study: Regulated industries’ spending on political donations, lobbying pays off

Jun 13, 2012

The following article was published in The Florida Current on June 13, 2012: 

Study:  Corporate Spending on Political Donations, Lobbying, Doesn’t Always Pay Off

Researchers from Rice University and the University of Long Island on Tuesday announced the results of a study they found suprising, which found that for many businesses, spending on lobbying and federal campaign donations does not yield a great return on investment.

The study, which will be published this fall, tracked the market performance and political activity of 943 corporations from 1998 to 2008 and found that those that gave more money to candidates and hired more lobbyists often fared worse.

They note a key exception, however: Political spending often can yield a return on investment in heavily regulated industries.

“If you’re regulated and for many years you keep repeatedly investing in (political activity), then you’ll realize some return on your investments. Then and only then it makes financial sense,” said Michael Hadani, study co-author and assistant professor of management at Long Island University, according to Reuters.

“We believe this may reflect the critical role that government can play in controlling resources and limiting behaviors through its rulemaking and enforcement processes, necessitating some level of political activities by the regulated firms,” study co-author Doug Schuler, an associate professor of business and public policy at Rice’s Jones Graduate School of Business, said in a press release.

“In regulated industries, firms are better able to target specific agencies and get to know their staff, which is more likely to result in more stable interactions,” he added.

Meanwhile, another new study indicates that it takes more than money and powerful lobbyists to gain access to members of Congress and their staff.

The study, released Wednesday by George Washington University, is based on a survey of nearly 3,000 congressional staff and Washington lobbyists. It found that providing reliable information was the most important factor in determining a lobbyist’s access. It also measured which information sources staff and lobbyists rely upon most — Congressional Research Service for the former and on-site visits for the latter.

“It appears that both money and a powerful lobbying ‘brand’ name matter less to members of Congress and their staff than providing reliable, consistent information,” GWU professor David Rehr, the lead researcher, said a news release.

The survey also points out that 95 percent of congressional staff thinks that media bias influences decisions in Congress, with 75 of GOP staff thinking there’s “a lot” of bias, compared with 53 percent of Democratic staff.

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