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Here's a stunner:

It pays for corporations to contribute to Congressional political campaigns. And what's more, it pays for investors to buy the stocks of companies that make a habit of doing so.

Hmmm...who would have thought THAT was possible, here in the Land of Milk & Honey (i.e. GREED).

Those are the implications of a new study, ''Corporate Political Contributions and Stock Returns,'' which began circulating last month as an academic working paper:

We examine whether firms are rewarded in terms of increases in shareholder wealth for their involvement in the U.S. political system. We develop a new and comprehensive database of firm-level contributions to U.S. political campaigns from 1979 to 2004. We construct variables that measure the extent of firm support for candidates. Strikingly, we find that these measures are positively and significantly correlated with the cross-section of future returns. The effect is strongest for firms that support a greater number of candidates which hold office in the same state that the firm is based. In addition, there are stronger effects for firms whose contributions are slanted toward Democratic candidates and House candidates.

The researchers examined all contributions to Congressional candidates from 1979 to 2004 from corporate political action committees, as listed in the database maintained by the Federal Election Commission.

The NY Times article goes on to say:

For each year from 1984 to 2004, the professors ranked companies according to the total number of Congressional candidates to whom they had contributed over the trailing five-year period. They then calculated how the stocks in each yearly ranking performed over the subsequent 12 months. The correlation between the number of candidates to which a company has contributed and the subsequent performance of its stock was ''so systematic over time for so many firms,'' Professor Cooper said, that he and his co-authors are ''confident that the pattern is not just a random fluke of the data.''

Based on the last data included in the study, which reflected contributions made through October 2004, the companies that donated to the greatest number of Congressional candidates were United Parcel Service, AT&T and Verizon.

The article concludes:

How did the politicians receiving contributions help the donor corporations? The professors don't know, because they didn't study it. They have their own suspicions, however. They imagine that the list includes ''favorable tax treatment and or credits, the awarding of government contracts, the imposing of tariffs or other penalties on competitors, and implementing favorable regulatory requirements.'' In short, the professors conclude that the political system in the United States falls far short of the goal of providing ''equal and fair political access'' for all citizens.

So there you have it...only in America can you invest in companies that rig the system in their favor, and thereby participate in a little political trickle-down income...

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