Spotlight on CPA - February 2019
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Continuing 2019 Momentum, Hilton Agrees to Political Disclosure

Hilton Worldwide Holdings Inc., the global hospitality company, has agreed to disclose its spending to influence politics, New York State Comptroller Tom DiNapoli announced in February. DiNapoli is trustee of the New York State Common Retirement Fund, which in turn has withdrawn a shareholder resolution at Hilton.

Hilton became the 168th public company to agree to disclose its political spending based on a model resolution drafted by the Center for Political Accountability and promoted by its shareholder partners.

"Investors have the right to know if companies are using corporate funds to influence the political process and whether they're doing so to promote the companies' best interests," DiNapoli said in a press statement.

"Lack of transparency and accountability when it comes to political spending may put companies' reputations and profits at risk and can threaten long-term shareholder value," he added.

CPA President Bruce Freed called the agreement “the latest example of Comptroller DiNapoli’s leadership on one of the most important issues facing companies and our democracy.”

Hilton agreed within 12 months of its 2019 annual meeting to “Posting on the Company’s website of our policies and procedures for making political contributions using corporate funds; [and] Posting on the Company’s website of our direct and indirect monetary and non-monetary contributions and expenditures, if any, to the following: State and local candidates, parties and committees; 527 groups; Ballot measures and independent expenditures; Trade associations and 501(c)(4) organizations.”



Highly Anticipated Roundtable Begins Today in NYC

The two-day “4th Roundtable on Corporate Political Accountability: Corporate Political Spending and Risk in the Age of Trump,” bringing together leading experts, was to begin today at New York University’s Stern School of Business.

The Roundtable will focus on issues raised by CPA in its 2018 report, "Collision Course: The Risks Companies Face When Their Political Spending & Core Values Conflict & How to Address Them."

Also sponsoring the Roundtable are CPA; the Zicklin Center for Business and Ethics Research at the University of Pennsylvania’s Wharton School; and the Zicklin School of Business at Baruch College.

The program brings together leaders in academia, corporate governance, business, government and investment and other interested groups.


Working Behind the Scenes

Founder’s Column
By Bruce F. Freed

Each time a public company agrees to pull back the veil on its political spending (see first article in this newsletter), there are many people to thank. They include the company’s corporate governance leaders, our shareholder partner groups that pushed for change, companies that have served earlier as beacons, other transparency advocates and sometimes the news media.

Behind the scenes, meanwhile, an important factor in this longterm trend toward transparency is the annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability.

In its ninth year, our annual benchmarking study has outsized impact. Just how credible the Index has become is suggested by a warning issued this month. It came from an attorney at Covington & Burling, a large international law firm.  

At Law360, attorney Zachary Parks identified the “Top 10 Political Red Flags in M & A,” or mergers and acquisitions. “In this hyper-charged political environment, the last thing an acquirer can afford is to unknowingly inherit a political scandal resulting from the purchase of a portfolio or target company,” Parks cautioned. He went on to offer as a “red flag” a “basement dweller” rating from the Index:

“[T]he Center for Political Accountability scores public companies on their levels of political spending transparency. Companies with low scores have been the targets for shareholder proposals, litigation and negative press. In particular, the annual ‘CPA-Zicklin Index’ calls out low-scoring companies by name as ‘basement dwellers.’ Prior to purchasing a public company, an acquirer should therefore review the target’s CPA-Zicklin score in order to assess the likelihood that the target might face criticism from the press, reform groups and others.

On the flip side, CPA has engaged in private talks with companies whose executives readily acknowledge they want to improve their annual Index scores or perhaps secure a top Index rating, as a “Trendsetter.” For these executives, public opinion and peer evaluation are components of success. When it comes to company transparency, the Index has become a corporate standard for observers judging superior, failing, or risky performance.

The voluntary movement toward corporate political disclosure, called “private ordering” by academics, keeps gaining ground. The CPA-Zicklin Index is an important plank in building this success.

CPA In the News

When NPR Illinois recently reported on a dark money group that wants to take the “uncommon” step of disclosing its donors, the media outlet turned to CPA for context.

The dark money group is called Think Big Illinois. CPA’s Bruce Freed told NPR that it’s important to consider why 501(C)(4) nonprofit groups “keep [donors] a secret in the first place.

“Are they afraid they’re not gonna get certain donors?" Freed asked. "Why don’t they want the public to know, or voters to know, where the money is coming from?”

Freed separately was quoted in an article from Agenda, a service of Financial Times, about the latest views of Blackrock regarding shareholder proposals for corporate political disclosure. You can read a lengthier discussion by CPA about Blackrock and the shareholder proposals in CPA’s January 2019 newsletter.


Flurry of Disclosure Legislation in Congress

In the opening weeks of the 116th Congress, House lawmakers have sponsored a flurry of bills pertaining to corporate spending on politics and, in some cases, disclosure. The legislation is expected to draw greater attention to these issues.

Reps. Salud Carbajal and Zoe Lofgren, California Democrats, introduced the Corporate Political Disclosure Act, requiring publicly traded companies to disclose political expenditures through the Securities and Exchange Commission to their shareholders and the general public.
A Compliance Week article about the bill mentioned CPA, its annual CPA-Zicklin Index and ongoing efforts to get voluntary corporate political disclosure. The legislation would go further to “create a uniform reporting requirement through the SEC,” the article said.

Rep. Andrew Levin, D-Mich., introduced a bill to reverse existing law that prevents the SEC from requiring corporations to disclose political spending to their shareholders. Levin’s bill is a standalone version of a provision contained in H.R. 1, an anti-corruption bill.

Rep. Jamie Raskin, D-Md., introduced a bill to prevent corporate expenditures for campaign purposes unless the corporation has established a process for determining the political will of its majority shareholders.
CPA is a non-profit, non-partisan organization created in November 2003 to bring transparency and accountability to political spending. To learn more about the Center for Political Accountability visit
Copyright © 2019 Center for Political Accountability, All rights reserved.

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