A new study from UT researcher Timothy Werner brings to light theories of why law-abiding firms often attempt to conceal their corporate political activity from the general public.
Business professor Werner said although companies within the United States are legally required to disclose their corporate political activity, the ability of these companies to mask this information has increased significantly since 2010. He said the problem that comes with this circumstance is that it is hard to observe what people actively try to conceal. This led him and his colleagues, Nan Jia, a researcher from the University of Southern California, and Stanislav Markus, a researcher from the University of South Carolina, to try to develop a theory of concealment.
“Thinking about attributes in particular political issues, attributes of the politicians themselves and attributes of the firms trying to engage to come up with predictions about when firms are more likely to do this,” Werner said. “Our goal in doing that is to help researchers who are interested in these questions, essentially be investigative reporters, and dig around and see if these predictions that we’re making are true.”
The study, which the team began working on in late 2017, outlines a number of strategies that corporations trying to conceal their political activities use, such as creating citizen coalitions to promote their positions and giving to groups that do not legally have to disclose where they receive money from lobbying people who are not obviously involved in politics.
As for when companies use these strategies, the study found the less popular a lawmaker is, the more likely it is that a company tries to conceal spending for that lawmaker, and the lower the cost of concealment, the more likely a company will attempt it.
Werner said this particular study focuses on how certain companies choose to engage with politics and does not go too far into specifics of any particular one. He said this does have effects on the average citizen though, as these companies actively try to shape public policy.
“It also affects average people with their shareholders in these companies because as shareholders they should probably have some sense of what the company is up to,” Werner said. “But if the laws don’t require disclosure, either to the public or to shareholders, it’s hard for the ‘owners’ of the company to hold managers accountable for their decisions.”
