Firms face tension between association and detachment risks in their relationships with controversial politicians. Particularly under a sudden adverse incident in the political market which is outside the firm’s control but can seriously damage the firm’s reputation, firms may lose public approval if they maintain their relationships but could jeopardize future political favors if they do not maintain these relationships. In this dilemma, many firms publicly pledged to pause problematic donations, to avoid losing public approval. However, at the same time, visible political connections may be temporarily replaced with an opaque channel—firm lobbyists’ personal donations—to maintain their ties to controversial politicians which we refer it to strategic obfuscation. We find that this strategic obfuscation allows firms to maintain their vow to withhold problematic contributions at the firm-level for a longer period, at least on the surface. We also find that those firms with revolver lobbyists who have ties to controversial politicians through former employment, and a greater proportion of contributions made by external lobbyists are even more likely to do so. With these findings, we show that when certain political connections are suddenly condemned, intentional strategic obfuscation can help firms to stay away from problematic donations for longer to maintain public legitimacy, while at the same time continuing their relationships with problematic politicians.
