Harvard Law professor John Coates earlier this month took the U.S. Chamber of Commerce to task for a comment that the corporate lobby group made on the Securities and Exchange Commission’s (SEC) website.
In its comment to the SEC, the U.S. Chamber sought to discredit the research of Professor Coates and other academics whose work shows a correlation between corporate political spending and lowered shareholder value.
Professor Coates submitted his rebuttal to the Chamber as a comment to the SEC as well. Coates’ critique – rooted primarily in the Chamber’s dependence on flawed analysis by the Manhattan Institute – is well worth reading, both for its passion and its scholarly rigor.
Here’s how Coates opens his argument:
The Chamber’s comment relies primarily on ‒ and indeed, largely tracks ‒ a non-peer-reviewed, privately published white paper from the Manhattan Institute (the MI-lobbyist paper) written by a lobbyist who concludes, perhaps not surprisingly, that lobbying is worth paying for. However, neither the MI-lobbyist paper nor the Chamber’s comment present any new evidence, nor does either advance any new thinking relevant to corporate political activity, nor could either be fairly described as a “comprehensive study of the economic literature in this area” (as they describe their work). Instead the MI-lobbyist paper selectively reviewed other’s research on the topic, and misreported the tenor of prior research. None of that prior research demonstrated, and little even supported, the claim that corporate political activity benefits shareholders. Rather, the vast bulk of that research occasionally supported the much weaker claim that corporate political activity can sometimes generate favorable political results. But this conclusion is not the important one for the SEC’s purposes. The SEC should want to know whether corporate political activity is benefiting shareholders, not whether it’s producing results that benefit others, or producing benefits that are below the cost of that activity.
And, while you’re fired up about fighting for disclosure of corporate political spending, you can use this Public Citizen page to submit your own comment to the SEC.
Rick Claypool is Online Director for Public Citizen’s Congress Watch division. Follow him on Twitter at @RickClaypool.