USA - Nationwide: A Political Law Overview

Corporate Political Activity: Compliance with Campaign Finance, Lobbying Disclosure, and Government Ethics Laws in a Period of Change

The legal and regulatory environment surrounding corporate political activity is undergoing significant change. Recent election cycles, evolving federal enforcement priorities under the second Trump administration, changes in shareholder engagement, shifting environmental, social, and governance (ESG) expectations, the solicitation of contributions for governmental and ceremonial purposes, and heightened scrutiny of corporate engagement with government have collectively reshaped the compliance landscape for the regulated community.

Political engagement remains essential. But in an era marked by political polarization, regulatory uncertainty, aggressive state-level enforcement, and increasing public scrutiny, the risks associated with corporate political activity have become more complex and consequential.

As regulated companies, non-profits and others interacting with the government enter the 2026 and 2028 election cycles, maintaining rigorous compliance with campaign finance, lobbying disclosure, government ethics, and foreign influence laws remains critical.

A shifting environment

Federal, state and local regulatory priorities affecting corporate political activity continue to evolve rapidly. While some areas of enforcement have slowed or narrowed in scope, others have intensified, particularly where national security, foreign influence, or perceived abuses of executive authority are implicated. In the context of shifting priorities and political leadership, CEOs and senior executives have been called on to interact with government agencies at the federal, state and local levels more than ever before.

Companies with interests before the government have been asked to make sizable donations for various purposes, from government buildings to presidential projects. These payments may require disclosure and even when they do not, invite scrutiny.

At the federal level, the SEC’s retreat from expansive ESG rulemaking has altered the shareholder proposal and disclosure landscape. At the same time, voluntary corporate disclosures regarding political spending, lobbying, sustainability, and governance continue to create potential litigation, enforcement, and reputational exposure where statements are inconsistent, incomplete, or unsupported by adequate controls.

The SEC’s renewed emphasis on company-specific materiality standards for shareholder proposals has provided companies with additional grounds to challenge proposals related to political activity and ESG matters. As a result, the volume of shareholder proposals has declined, although proposals concerning political spending transparency and lobbying alignment remain highly visible, particularly among institutional investors and public pension funds.

At the Department of Justice (DOJ), enforcement priorities have significantly shifted. While the administration has signaled a narrower approach to certain white-collar enforcement initiatives, scrutiny surrounding foreign influence, foreign government activity, and national security concerns remains prominent. Companies with international operations, foreign ownership, or substantial government engagement should continue to assess risks under the Foreign Agents Registration Act (FARA), the Foreign Corrupt Practices Act (FCPA), and related federal statutes.

These developments have led state governments, particularly Attorneys General, to step into areas previously considered federal concerns, including healthcare funding, antitrust review, and FARA enforcement, with a coalition of 19 Republican Attorneys General calling on the DOJ to investigate dozens of US-based non-profits for potential violations of FARA.

Federal cutbacks have also led to a boom in private-sector hiring of former government officials, triggering conflict of interest and revolving door issues.

Political law compliance remains foundational

Despite changes in federal priorities and rapidly changing conditions, the fundamental legal framework governing corporate political activity remains unchanged. Three primary categories of law continue to define the rules governing private-sector interaction with government:

• campaign finance and pay-to-play laws;
• lobbying disclosure laws; and
• government ethics laws.

These laws exist at the federal, state and local level, often with inconsistent definitions, reporting thresholds, restrictions, registration triggers, and disclosure obligations. Increasingly, state and local regulators are filling perceived gaps in federal enforcement, creating a patchwork of compliance obligations, often along partisan lines.

Political law compliance is no longer solely a government affairs function. It has become an enterprise-wide governance issue involving boards of directors, legal and ethics departments, communications, human resources, investor relations, and senior leadership.

Heightened scrutiny of corporate political activity

Corporate political engagement continues to face scrutiny from shareholders, regulators, watchdog organizations, employees, the media, and elected officials across the political spectrum. Areas receiving sustained attention include:

• corporate PAC activity;
• executive political engagement;
• lobbying expenditures and disclosures;
• payments to trade associations and tax-exempt organizations;
• independent expenditures and support for super PACs;
• alignment between public statements and lobbying positions;
• board oversight of political activity; and
• gifts, entertainment, and interactions with public officials.

Third-party organizations and private-ordering initiatives continue to influence corporate behavior even in the absence of federal mandates. Transparency frameworks, voluntary disclosure standards, and governance scorecards remain important reference points for investors and stakeholders assessing corporate political engagement.

At the same time, increased direct engagement between senior corporate executives and federal policymakers has created renewed focus on lobbying registration obligations, gift restrictions, and informal influence activities that may trigger disclosure requirements under federal or state law.

A central lesson emerging from recent election cycles is that political law compliance programs must be durable, apolitical, and capable of withstanding changes in political leadership and enforcement priorities.

Effective compliance programs typically include:

• centralized review of political spending and lobbying activity;
• robust approval and escalation procedures;
• written policies governing political engagement;
• training for executives, government affairs personnel, and PAC stakeholders;
• due diligence surrounding third-party intermediaries and trade associations;
• board or senior leadership oversight mechanisms; and
• co-ordinated messaging across legal, compliance, communications, and government affairs functions.

In particular, companies should ensure that public-facing positions are reasonably aligned with political and lobbying activity. Misalignment between stated corporate values and advocacy positions can create reputational exposure, shareholder pressure, and internal governance concerns—or a political backlash—even where no legal violation exists.

Board oversight and tone at the top

Finally, boards of directors and senior leadership are increasingly expected to oversee corporate political activity as part of broader enterprise risk management. A strong “tone at the top” remains essential. Senior leadership should reinforce that political activity is subject to the same compliance expectations, documentation standards, and internal controls applicable to other regulated business functions. Political activity policies must be updated to address the reality of the current political climate, including employee involvement in political activity in the workplace.

Looking ahead

The coming election cycles will likely produce continued volatility. At the same time, corporations are expected to remain active participants in the policymaking process. The challenge for companies is therefore not whether to engage politically, but how to do so responsibly, transparently, and in compliance with a complex and potentially conflicting legal framework.

For the regulated community, maintaining sophisticated political law compliance programs is no longer simply a defensive exercise, but a core governance function essential to managing legal, operational, and reputational risk in a period of sustained political and regulatory change.