Wednesday, February 11, 2009

How Much Do You Pay To Lobby The Government?

Government lobbying influences lawmakers into making decisions that positively impact a special interest group. Like it or not, it is a normal part of a corporation's activities. In 1995, the US government signed into law a bill that requires companies to disclose the amounts they have spent for the purpose of lobbying. Investors can find out what their companies have paid for the purpose of lobbying with the following instructions:
  1. Go to the US Government's "Lobby Disclosure Search" website (the site moves, so Google it)
  2. Change the "Search Field" drop-down to "Registrant Name"
  3. Enter a company name under "Criteria" e.g. "Pfizer"
  4. Click "Search"
You will see either the quarterly of half-year documents your company was required to submit. A quick look at Pfizer's Q4 2008 disclosure document reveals it spent $3.25 million lobbying last quarter! You will also see the various government groups it has lobbied (e.g. Health Departments, US Patent Office, State Department, etc) as well as the subject matter on which it has lobbied (e.g. an intellectual property act, some WTO issues etc).

Should lobbying be allowed? That discussion is outside the scope of this article. On the one hand, lobbyists may alert otherwise ignorant government officials as to the impact of various legislation on their constituents. On the other hand, it gives a legislative advantage to those who have the means to directly influence government officials.

If shareholders believe managers are being wasteful by slapping needless lobbying expenses, they are free to sell their shares. Thanks to the "Lobbying Disclosure Act" of 1995, shareholders have much of the info they need to make that decision.

3 comments:

Anonymous said...

Have you seen the article showing that companies that lobby the most have performed better than those that don't? I don't have a link, but thought it was interesting

Saj Karsan said...

I have not. But that's interesting; I'll look into it, thanks!

Anonymous said...

http://seekingalpha.com/article/115394-companies-that-lobby-heavily-do-better-than-those-who-don-t

Here it is.

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