Why Big Companies Spend So Much Money On Washington: It Works Even Better Than You Think

That money talks in Washington is conventional wisdom for a reason. Corporations, industries, and a handful of extraordinarily wealthy individuals spend big bucks on campaigns and on lobbying not for fun, but because they expect to get something back in return. And while adding up all those expenditures is comparatively straightforward, finding out who gets how much back has been harder… until now. A new study finds that billions of dollars might go into D.C., but trillions are coming back out.

The Sunlight Foundation, a nonpartisan nonprofit, released a study this month they call Fixed Fortunes. In their research, the Foundation looked at six years of campaign and lobbying spending by the nation’s 200 largest corporate spenders (“the Fixed Fortune 200”), and compared it to the favorable returns those companies get.

The numbers are as depressing as they are large. In total, the 200 organizations spent a combined $5.8 billion on federal lobbying and campaign contributions. Corporations (or the people who run them) might be avaricious, but they’re not stupid: nobody spends that much without getting a solid return from their investment. And so they do: together, over the same six-year span, those corporations received $4.4 trillion in federal business and support.

In a rough sense, for every dollar they spend on Washington, the biggest companies in the U.S. are getting more than $750 back. With outcomes that good, it’s no wonder spending on politics keeps going up.

The returns from the feds take all kinds of forms. Sometimes lobbying results in policies and industries more favorable to a company’s long-term interests, but sometimes it also means actual cash in hand in the form of loans, grants, or lucrative contracts:

For example, the federal government issued contracts to purchase goods and services that totaled a little more that $3 trillion during the period; companies among the top 200 corporate political givers won $1 trillion of that, a third of the total. The Treasury Department managed $410 billion in loans and other assistance issued under the Troubled Asset Relief Program, created by Congress to cope with the 2008 financial crisis; of that amount, $298 million, about 73 percent, went to 16 firms among the Fixed Fortune 200. When the Federal Reserve took extraordinary measures in the wake of the 2008 financial crisis, it funneled nearly $2.8 trillion through 29 Fixed Fortune firms. The companies that participated the most in politics got huge returns.

The companies come from all sectors, the Foundation reports. Finance takes about a quarter of the slots, with 48 businesses far and away making the largest number of campaign donations time and time again. Of the other three-quarters, 28 fall into communications and electronics, 21 in healthcare, 13 in defense and aerospace, 13 in agribusiness, 11 in “energy and natural resources” (mining, oil, etc), and 7 in transportation.

The “Fixed Fortune 200” gave to roughly a quarter of all Congressional incumbents (approx. 144 members) in each election cycle, the Foundation found. The same group also accounted for roughly 1% of all lobbying clients (there are over 20,000), but for more than a quarter, 26%, of all lobbying spending.

The Foundation looked at a six-year span — 2007 through 2012 — specifically because they wanted to include spending both before and after the Supreme Court’s 2010 Citizens United ruling. In that case, and again in 2014’s similar McCutcheon ruling, the Court held that when it comes to politics, money is protected speech and therefore spending can’t be limited. The ability to buy your way into a favorable political outcome, therefore, is protected.

The Court, in an opinion by Chief Justice John Roberts, also found that influence is only tantamount to corruption if it reaches cartoon-villain levels of obviousness. Since nobody is handing over giant burlap sacks with dollar signs printed on the side in exchange for mysterious briefcases, it’s all above-board and legal.

Spending, meanwhile, continues to increase. Candidates, their campaigns, the parties, and donors spent about $1.5 billion (with a B) on the 2014 midterms. That’s on top of the $3.24 billion spent on formal lobbying last year, and the $2.4 billion and counting spent this year.

In the six-year span covered by the Sunlight Foundation study, General Electric was the biggest overall spender, to the tune of over $151 million. GE, in turn, received $23.5 billion in federal business and $19.6 billion in federal support during that same time period.

However, GE was nowhere near the biggest recipient of federal business, which the Foundation defines as including government contracts and some other transactions. That honor goes to massive defense contractor Lockheed Martin, unsurprisingly, with $204.2 billion of business from the feds. Fellow defense and aerospace contractors Boeing ($187.9 billion) and Northrop Grumman ($88.6 billion) were right behind.

The biggest recipients of government support (“including loans, loan guarantees, grants, and money advanced to companies in the aftermath of the financial crisis”) were, again unsurprisingly, all banks. Citigroup received $503.4 billion of support, followed by JPMorgan Chase with $485.6 billion and Bank of America at $457.1 billion.

You can browse the full table, or download the data set to do your own analyses, by clicking here.

Fixed Fortunes: Biggest corporate political interests spend billions, get trillions [Sunlight Foundation]

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