The best example of the link between lobbying and fraudulent companies was Enron. In its day, Enron had Enron had gained favours by lobbying Congress, federal and state governments, and various regulatory agencies on 49 occasions. These included the removal of price controls on natural gas, allowing certain types of debt off the book, and blocking government regulations on its derivatives trading.

At the same time, these fraudulent firms pay big bucks. About $3 billion of influence was peddled in Washington last year, reports The Blotter blog.

But it's worse than that. Fraudulent firms that lobby stay fraudulent a lot longer than those who don't. They allowed to get away with it.

A new paper by Frank Yu of Barclays Global Investors and Xiaoyun Yu from the Kelley School of Business at Indiana University, Corporate lobbying and fraud detection, has found that fraudulent firms that lobby evade fraud detection 117 days longer than their non-lobbying counterparts. For firms that do not lobby, the average is 594 days. For firms that do lobby, the average is 711 days. And with friends in high places, they are 38 per cent less likely to be detected by regulators.

The study also found that firms spend more on lobbyists peddling influence when they are actually engaged in hoodwinking investors. On average, a fraudulent firm spends $1.61 million on lobbying each year
during its non-fraud period, but spends $2.08 million - 29% more - on lobbying each year during its fraud period.