New Report Alerts Companies to New Level of Risk from Political Spending

In today’s climate of heightened polarization, intensifying public scrutiny, and shifting political dynamics, companies that engage in political spending face significantly greater risks than in the past. To help companies navigate these growing risks, the Center for Political Accountability recently released Corporate Political Spending: What Are the Real Risks?, a report that lays out the escalating financial, legal, and reputational threats companies now face.

The reports examines both immediate risks and emerging risks. Companies that lack a strong framework to guide their political contributions risk triggering public backlash, boycotts, regulatory retaliation, corruption, and employee dissatisfaction.

The report  details high-profile cases — from Tesla’s stock volatility to Disney’s feud with Florida’s governor and the fallout from FirstEnergy’s billion-dollar bribery scandal — to show how poorly governed political spending can damage a company’s bottom line and credibility.

Key risks identified in the report include:

Bottom Line Repercussions

Companies have a duty to protect shareholders from a range of risks — especially those that threaten revenue and competitiveness in a global economy. As corporate political spending grows more complex, so do the financial and reputational risks it poses.

With consumers increasingly willing to shift their spending based on corporate values, companies must approach political giving responsibly. Misaligned contributions—supporting candidates whose views contradict company values—can result in significant bottom-line and brand harm.

Below is a selection of examples illustrating these risks and potential harms.

Reputational hits and consumer boycotts.

A recent report identified political donations as the leading factor driving consumers to stop supporting a company financially. The threat of boycotts has motivated prominent companies to adopt robust political disclosure and accountability policies. To protect the company’s bottom line, executives at a large US food manufacturer did just that. They approached CPA out of concern that a controversial contribution could lead consumers to shift to a competitor’s products. These executives put policies in place that made theirs a top company in the CPA-Zicklin Index of Corporate Political Disclosure and Accountability.

The risks from boycotts are significant. Target, which previously faced consumer backlash for donating $100,000 to a group supporting gubernatorial candidate Tom Emmer—an opponent of gay marriage—despite Target’s public support for LGBTQ rights, is once again encountering significant financial risks from ongoing boycotts.

In response to pressure from the Trump administration, Target is among a group of US companies that have publicly rolled back their DEI commitments, prompting consumer boycotts from civil rights groups. Target recently saw a decline in foot traffic and stock value, while DEI-supporting Costco experienced an increase. The boycott is predicted to continue.

A recent Lending Tree survey underscores the consumer blowback companies must contend with:. among more than 2,000 people, nearly a third reported boycotting a business, while about a quarter supported a company that was the target of boycott.

Consequences of misaligned spending.

In 2017, consumer backlash to North Carolina’s HB2 bill—which restricted public facility access based to transgender people—led to nearly $4 billion in lost investment over the following years. Notably, some companies that publicly denounced the bill had previously contributed to national political groups that helped elect the lawmakers who passed it.

Similar criticisms arose when companies offering to support employees seeking abortion care continued to contribute to political groups that supported North Carolina legislators who enacted an abortion ban in North Carolina.

Loss of credibility.

Companies that fund political groups whose actions conflict with their public commitments can face significant reputational and financial risks. For example, several companies with climate commitments donated to the Republican Attorneys General Association, which backed California v. Bernhardt—a 2018 case opposing federal methane regulations. Even if intended to build relationships, such contributions can appear hypocritical, fueling public backlash and undermining credibility.

The costs of corruption.

In 2023, Florida State Senator Frank Artiles was convicted for running a “ghost candidate” scheme funded by a political group linked to lobbyists at Florida Power & Light (FP&L). After media exposure, FP&L CEO Eric Silagy resigned, and FP&L, along with its parent company, NextEra, were pulled into the scandal.

Similarly, FirstEnergy’s recent rate hikes were overshadowed by ongoing media focus on its $1 billion bribery scandal. This was one of the largest cases of corporate political spending corruption. It led to the replacement of top executives and the board of directors and depressed the company’s stock price.

Consumer backlash.

Elon Musk’s high-profile political spending during the 2024 election cycle has created business risks for Tesla by generating partisan scrutiny for the company. Donations to PACs and candidates—some of whom oppose environmental regulations or electric vehicle incentives—have raised concerns about misalignment with Tesla’s sustainability mission. This spending risks alienating customers and investors, which has eroded both brand loyalty and investor confidence. Such controversies caused a sharp drop in Tesla’s share price and market value. Tesla’s stock price declined further in June 2025 following a high-profile fallout between Elon Musk and the second Trump administration.

Companies are looking at growing risks from political pressure and retribution at both the federal and state levels. In some cases, companies have faced retaliation from the same political leaders that they helped to elect via their direct and third-party political spending.

Recent events reflect a broader trend of using government authority to punish perceived opponents. This tactic is increasingly echoed by state-level leaders who have sought to penalize businesses over policy disagreements or public stances.

Below are some recent examples of companies suffering from the consequences of political pressure and retribution.

Retribution and legal consequences.

Donald Trump sued CBS News for $20 billion, claiming a “60 Minutes” interview with Kamala Harris was edited to unfairly boost her image before the 2024 election.

CBS denied wrongdoing, saying edits were standard. Meanwhile, the FCC — led by a Trump ally — has been investigating CBS for alleged news distortion, drawing criticism for potential First Amendment violations. In May 2025, three US senators warned executives at Paramount, CBS’s parent company, that any settlement of the lawsuit involving a payout to President Trump could be perceived as a bribe and expose the company to shareholder litigation. Strong public reaction to the $16 million settlement Paramount reached with President Trump backs up the warning.

AT&T faced similar tension with the first Trump administration over its Time Warner merger, with Trump publicly opposing the deal, possibly due to CNN’s critical coverage. Despite donating to both of Trump’s inaugural funds, effectively funding its own intimidator, AT&T pursued the merger, leading to a high-profile antitrust lawsuit. The company won the case in 2018, but the situation exposed the risks of a company funding an administration that sought to block its business interests.

Political interference and federal contracts.

In 2019, Amazon accused President Trump of improperly influencing the Pentagon’s decision to award a $10 billion cloud computing contract (JEDI) to Microsoft instead of Amazon Web Services.

The company argued that Trump’s hostility toward Amazon CEO Jeff Bezos—who owns The Washington Post, a frequent target of Trump’s criticism—led to political interference in the contracting process.

Disney and DeSantis.

In 2023, a dispute escalated between Florida Governor Ron DeSantis and The Walt Disney Company following Disney’s public opposition to Florida’s Parental Rights in Education Act, known as the “Don’t Say Gay” law. In retaliation, DeSantis appointed a new board to oversee Disney World’s governing district, effectively stripping the company of its self-governing privileges.

While Disney paused direct contributions to Florida state politicians, it has continued to give to national third-party political groups that spend heavily in Florida races, effectively funding the politicians that threatened the company and undermining the company’s commitments to LGBTQ employees.

Companies rely on the rule of law, predictability, and stability as essential foundations for successful and sustainable operations. When companies fail to consider the broader impacts of their political contributions, including a commitment to act ethically, they risk undermining the very environment required for them to operate, compete, and succeed.

As the examples below illustrate, such oversights can expose companies to significant organizational/internal, reputational, legal, and strategic risks.

While Foreign Corrupt Practices Act (FCPA) enforcement is paused, risks only grow.

Companies require a clear and consistent regulatory framework that applies uniformly across the board, with accountability measures in place for non-compliance.

The recent pause in FCPA enforcement creates uncertainty and risk for companies. While it may ease compliance temporarily, it raises concerns about future policy shifts and possible retroactive actions. This unpredictability complicates operations and weakens the consistency of the legal framework businesses rely on for managing global risk.

Corporations unknowingly funded Jan. 6, 2021, rally.

On January 6, 2021, the Republican Attorneys General Association, via its affiliate, the Rule of Law Defense Fund, helped promote the rally that preceded the Capitol insurrection, including sending robocalls urging attendance. Major donors to RAGA and the RLDF during this time included Anthem, $336,025; Altria, $334,154; Comcast, $315,000; Walmart, $270,100; AT&T, $250,000; CVS, $213,407; Home Depot, $205,579; and Pfizer, $161,050.

This involvement exposed corporate donors to reputational and stakeholder trust risks. It also intensified scrutiny of political spending and alignment with democratic values.

Criminalizing profitable diversity practices.

Recent federal and state actions against corporate diversity policies threaten inclusive cultures that fuel innovation and profit. Diverse teams improve decisions and performance—companies with diverse leadership see 19% more innovation revenue and are 36% more profitable. Diversity is both ethical and strategic.

However, many companies continue to make substantial contributions to politicians and political groups that seek to criminalize diversity policies. This creates both financial and reputational risk for companies and can damage companies’ relationships with key stakeholders.

Controversy and recruitment.

Concerned that misaligned political spending could hinder recruitment of recent science graduates, a senior executive told CPA the company adopted stronger disclosure, accountability, and oversight to ensure alignment with its values and goals. This aligns with broader trends, as recent studies indicate that many workers prefer employers whose values reflect their own.

A Call for Transformative Change

Real Risks provides a road map for action. It calls on companies to adopt governance and risk management practices grounded in ethical principles, risk mitigation, and long-term value. It urges corporate leaders to look seriously at committing to follow the CPA-Zicklin Framework for Corporate Political Spending and proactively and broadly assess the impacts of their political engagement – a vital component of due diligence and a reflection of their stake in maintaining an ethically grounded and healthy business environment.

The report equips corporate executives and directors to navigate the increasingly turbulent intersection of business and politics. It offers a clear warning about the emerging risks of corporate political spending — and an opportunity to lead with integrity and a pragmatic ethical compass.