LEVERAGED BUYOUTS AND CORPORATE POLITICAL-ACTION

Leveraged buyouts (LBOs) of publicly traded companies provide an oppor tunity to examine the impact of a re-fusion of ownership and managemen t on corporate political action. Focusing on the ten largest LBOs duri ng the 1986-88 period, the authors find that, compared to a similar se t of companies and to cross sections of large companies, giving by LBO company political action committees dropped in the aftermath of the b uyout (though later rebounded), and shifted toward Democratic candidat es. Company charitable giving declined in the wake of a leveraged buyo ut, and case study suggests greater focus on education programs. LBO c ompanies also reduced the size of their boards and selected directors who held fewer directorships with other companies.