It's Sunshine Week 2014! For those unfamiliar, Sunshine Week aims to raise awareness and bring about more disclosure to the U.S. government. Given that this is an investing site, our focus is on publicly traded companies and the money they spend lobbying Washington. All of the data in this article comes from and the Senate Lobbying Disclosure Act database.

Today, we're looking at AT&T (NYSE:T). The telecommunications giant was one of the top five lobbying spenders out of all publicly traded companies in 2013. Of the $3.21 billion spent on lobbying last year, $15.9 million of it came from AT&T.

Certainly, $15.9 million is a huge amount of money to spend on advocacy, but how does it compare to the AT&T's lobbying record over time? If it's a one-time occurrence, maybe we can dismiss the 2013 figure as an aberration.


Interestingly enough, despite being in the top five for lobby spending in 2013, AT&T has cut back on this expenditure significantly compared to years past. That said, spending hasn't fallen below $14 million in the last decade. Obviously, the company sees value in lobbying Washington, but could this sort of spending simply be a hallmark of the telecom industry?

To test that theory, we can look at the spending of other telecom giants like Verizon (NYSE:VZ), Sprint, and T-Mobile USA. If we pooled the lobbying expenditures for these four companies, here is how it would break down on a percentage basis:


In the context of the industry leaders, maybe $15.9 million is simply not that much to spend on lobbying. Verizon spent $13.7 million last year, so maybe this is merely due vigilance in the telecom world. But what exactly are these companies trying to achieve by spending all this cash currying favor in our nation's capital?

Here's a look at the AT&T's lobbying record broken out by the number of reports filed by specific issue code:


Not surprisingly, telecommunications and taxes made up most of the company's focus. Homeland security and radio and TV broadcasting are interesting categories, though. A closer look reveals key sub-issues regarding spectrum, broadband, universal devices, cybersecurity, and cyberintelligence sharing. If you are just getting to know AT&T from a shareholder's perspective, this information is invaluable for getting a true sense of what the company is and where its business is heading.

Why all of this matters to you
Now that we've flushed out AT&T's lobbying profile, it's fair to ask what it all means. Does lobbying really matter to investors? Does it impact shareholder returns?

As it turns out, it does.

Academic studies and theoretical indexes both point to the superior performance of companies that lobby compared to companies that don't and compared to the performance of the S&P 500 index as a whole. Last summer, researchers at the University of Mississippi published a paper that concludes there is a direct link between lobbying activity and shareholder wealth, with the authors writing, "Our results suggest that stocks of lobbying firms significantly outperform non-lobbying firms."

Further evidence of the success that lobbying brings comes from the investment research firm Strategas, which created an index that tracks the 50 companies that spend the most money on lobbying each year. It claims its index has beaten the S&P 500 for the last 15 straight years, implying the market is not properly valuing lobbying expenditures.

Lobbying is not necessarily viewed as an investment opportunity in the minds of most shareholders, but maybe it should be. In the spirit of Sunshine Week, it's time to celebrate disclosure and shine a little light on the lobbying activities of your stock holdings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.