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Ethics Study: More Employees Report Seeing Illegal Donations

The number of employees of major companies who claim to have witnessed illegal contributions to public officials is four times higher than it was two years ago, according to a new study from a business ethics watchdog group.

Four percent of 4,600 private-sector employees surveyed this fall by the Ethics Resource Center said they witnessed improper contributions to campaigns and parties. By comparison, only 1 percent of respondents reported these transgressions in the group’s previous study, completed in 2009.

“If these numbers are quadrupling, it is eye-popping,” said Kenneth Gross, a lawyer with Skadden, Arps, Slate, Meagher & Flom’s political law practice who advises corporate clients on government affairs compliance. “Possibly the relaxed laws on giving have pervaded … the workplace, giving people the impression that things aren’t as strict as they were.”

Although it is not clear what led to the spike, there is no question that the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which opened the door to unlimited political spending by unions and corporations, has dramatically changed the landscape of political giving in the business world, heightening pressure on fundraisers to rake in big sums from new sources.

Manager-level employees at publicly traded companies were most likely to report observing an illegal contribution, according to data the organization prepared exclusively for Roll Call. Seven percent of senior managers reported observing illegal contributions.

“They feel increasing pressure from the politicians to hand over money or else their business or their interests are going to be hurt,” said Meredith McGehee, policy director at the Campaign Legal Center. “It’s even more true now post-Citizens United because there is no limit on the amount that someone can be expected to hand over.”

At the same time, companies have ramped up efforts to educate employees on the laws governing their interactions with public officials, a trend that campaign finance experts said could make respondents increasingly sensitive to potential improprieties.

“It is certainly the case that more employees are aware of the regulations. … Companies are doing more training programs than they ever have in the past,” said Patricia Harned, the president of the Ethics Resource Center. “What is so striking about this number is that when you look across [the study], the trend in general misconduct went down.”

Nonetheless, only 65 percent of workers who observed improper political contributions reported the violation to management. The center compiled its study from responses collected via telephone and online surveys.

Four percent of employees said they witnessed bribes and improper gifts or payments to public officials, which could include efforts to receive favorable treatment like winning a contract. This is the first year the study has specifically asked about bribes to public officials.

At the very least, election law experts said, the report suggests a spike in confusion about what the regulations actually mean.

The report also found that 42 percent of workers said government regulation makes their industry more ethical while 13 percent said regulation has the opposite effect.

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