Spotlight on CPA - March 2020
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NOTE TO READERS: How CPA is Handling the Coronavirus Pandemic 
I hope you are holding up under the terrible strain of the coronavirus crisis. This is perhaps the most trying time any of us has experienced. Please keep your physical distance and stay healthy!
I wanted to take a moment to let you know how CPA is handling this. We are open for business and have not missed a beat despite working remotely. The staff stays in close touch, and we have a full schedule of calls with companies, other organizations and individuals that are carrying forward the Center’s programming that’s bringing transparency and accountability to corporate political spending. We’re also moving ahead with groundbreaking research and reports.

We hope you will support CPA to help us carry out our vitally important work.

CPA Opens the 2020 Proxy Season Strong
Four companies that received low to rock-bottom scores for political disclosure and transparency last year have reached agreements to pull aside the curtains on their spending to influence elections.
As the 2020 proxy season kicks off, MGM Resorts International and Monster Beverage Corp. reached agreements with CPA filing partners John Chevedden and the Unitarian Universalist Association, respectively. VF Corporation, an apparel and footwear company, and Simon Property Group, a commercial real estate company, reached disclosure agreements with New York State Comptroller Thomas P. DiNapoli.
MGM and Monster scored 0.0 percent on the 2019 CPA-Zicklin Index of Corporate Political Disclosure and Accountability. VF Corporation had a score of 7.1 percent, and Simon Property Group, 4.3 percent.
The newest agreements bring to 177 the total number of publicly held companies that have adopted disclosure and accountability agreements over the past 16 years.
MGM resorts adopted a new political spending policy including full disclosure of all election-related spending. Monster agreed to disclose all forms of election-related spending. VF Corporation, whose brands include JanSport, Eastpak, Timberland, North Face, Eagle Creek, and Dickies, agreed to full disclosure, as did Simon Property Group, the largest shopping mall operator in the country.
As a result of the agreements, shareholder resolutions were to be withdrawn.
In a related matter, Allstate Corporation reached an agreement with the International Brotherhood of Teamsters for enhanced disclosure of political spending. Allstate scored 51.4 percent on the 2019 Index.

CPA Announces Collaboration with Leadership Now Project; Expands Reach, Impact

CPA is excited to announce a collaboration with The Leadership Now Project, a membership organization of business and thought leaders dedicated to renewing our democracy for the long-term.
“CPA is thrilled to have won the confidence and support of The Leadership Now Project,” said CPA President Bruce Freed. “This is a breakthrough in growing CPA’s mission for bringing sunlight and accountability to corporate spending to influence federal and state elections and our democracy.”
Leadership Now, according to its website, “was incubated by a group of Harvard Business School alumni as an innovative model for sustained and strategic engagement to fix democracy. It now has member groups in five cities.”

At Harvard Business Review, Leadership Now officials recently published an analysis entitled, “How Business Leaders Can Champion Democracy.” It was written by Daniella Ballou-Aares, CEO, and Vineeta Vijayaraghavan, chair of the Education Fund.

Addressing “What You Can Do Now,” the article’s authors wrote, “Align your business with prodemocratic principles. Do you know if your company’s engagement in politics is supporting the health of the system? Understanding the nature, scope, and impact of your company’s political resources and contributions — and ensuring transparent reporting to your executive team and board — is a good start. The Center for Political Accountability, an organization we support, and its Wharton Business School–affiliated CPA-Zicklin Index provide clear guidance on implementing political-spending transparency and accountability policies.”

Meanwhile, an online article by The Fulcrum this month detailed Leadership Now’s work and mentioned CPA and other beneficiaries. The article was headlined, “Group helps channel millions for democracy reform efforts.”


One Nation Under Shakedown?

Founder's Column
By Bruce Freed

The coronavirus crisis is having a devastating impact on the U.S. economy, corporations, and workers. Yet the rush to enact a $2 trillion rescue bill to address the crisis only makes the following question even more salient: Will we ever know whether undisclosed political contributions influenced which companies benefited most from the legislation?

Because our election financing system is shrouded in anonymous “dark money,” it’s unknowable. But these recent events occasion an opportunity for the same kind of shakedowns of corporations that occurred during Watergate:
--The historic emergency aid package passed last week was forged significantly by Republican Sen. Mitch McConnell and GOP allies. It has large corporate tax cuts and loans to large corporations as well as small businesses. It omits some issues of negotiation that weren’t a Republican priority, such as aid to airlines to cut greenhouse gas emissions and the extension of tax credits for wind and solar energy.
--There was a “lobbying gold rush” to capitalize on writing the legislation, according to The New York Times  although the halls of the Capitol “were eerily quiet;” lobbyists “were burning up the phone lines and flooding email inboxes” of legislators to pursue their agendas.
--At the very least, political donations are used to win access to elected officials. White House budget director Mick Mulvaney in 2018 said of his interactions as a lawmaker, “We had a hierarchy in my office in Congress.” He went on, “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.” Going further, Yale Prof. Jacob Hacker and Nathaniel Loewentheil have written that corporations and super-rich “pour money into campaigns and lobbying” as a means of “investing in favorable policy outcomes.”
--One of the greatest backers of McConnell and his GOP allies is the Senate Leadership Fund, a Super PAC headed by former McConnell chief of staff Steven Law; it received  a staggering $7.6 million from its companion dark money 501(c)(4) group One Nation, also headed by Law, in December 2019. Law is known to solicit companies for political donations. Some large companies including ConocoPhillips, Chevron, Altria and Valero have given generously to the Senate Leadership Fund, which does disclose its donors.
--It is impossible to tell how much corporate money flows to One Nation. That corporate money has helped support it is irrefutable. The large oil refiner Andeavor, for example, voluntarily disclosed it contributed $1 million each in 2016 and 2017 to One Nation. (In 2018, Andeavor was acquired by Marathon Petroleum.)
--It’s fair to ask, is this “dark money” group shaking down corporate donors who want to influence public policy – and include provisions in the coronavirus rescue bill -- and are others doing the same thing? We don’t know. But our existing political financing system enables it. It encourages this suspicion. It undermines public trust.
Not for a second do we object to federal emergency aid for corporations, workers, families, and hospitals.  But we advocate sunlight in its drafting – and sunlight in the system that elects the drafters.
The latter is impossible through legislation or regulatory action today. In this environment (and there will be more stimulus legislation with government aid for business ahead) it’s critically important that an increasing number of publicly owned companies have embraced corporate political disclosure.
Like Andeavor, they have done so after advocacy and engagement by CPA and its partners. Sunlight in political giving is an established route for companies to avoid shakedowns. It’s also a foundation for helping rebuild public trust in our democracy.


Getting CPA’s Message Out

A shout-out to ValueEdge Advisors Vice Chair Nell Minow, who blogged our February Founder’s Column about the Securities and Exchange Commission’s proposed rules on proxy proposals and advisors CPA’s Freed joined MSNBC’s The Beat to talk about money in the presidential race.

CPA’s Leadership, Impact Highlighted at CII Conference

At the Spring 2020 Conference and 35th Anniversary of the Council of Institutional Investors (CII), CPA was given an opportunity to showcase its recent research and work.

CPA’s Freed addressed a March 11 session hosted by CII’s Shareholder Advocacy Committee.  In turn, Adam Kanzer, Head of Stewardship-Americas for BNP Paribas Asset Management, saluted CPA’s role in laying a foundation for corporate political transparency with a shareholder engagement model that others have followed.


SEC Reject’s NextEra Challenge to Newground/CPA Resolution

The U.S. Securities and Exchange Commission has rejected a challenge brought by NextEra energy that would have blocked a shareholder vote on a proposal calling for disclosure and board oversight of NextEra’s political spending.
The Florida-based electric utility giant is one of the largest political donors in the utility industry. Since the 2010 election cycle, it has contributed close to $12 million in corporate funds.
The SEC action cleared the way for shareholders to vote on the disclosure proposal, filed by Seattle-based Newground Social Investment.
“With this SEC decision,” said Freed, “shareholders have another opportunity to shine light on how NextEra spends shareholder dollars to influence the political process. Newground has been leading the effort to achieve this.”

Companies Recognize Misalignment with Trade Associations as a Risk 

More about alignment: UK oil company BP recently signaled its intention to pull out of three US-based trade associations “because of disagreements over their climate-related policies and activities,” according to an article in The Guardian. The trade groups are American Fuel and Petrochemical Manufacturers (AFPM), the Western States Petroleum Association (WSPA) and the Western Energy Alliance (WEA).
The Guardian said, “BP has identified a further five organisations with which it is only partially aligned on the climate crisis, and has told them about these differences. They are the American Petroleum Institute, Australian Institute of Petroleum, Canadian Association of Petroleum Producers, National Association of Manufacturers and the US Chamber of Commerce.”
BP’s planned withdrawal from AFPM “followed in the footsteps” of Shell and France’s Total.
For several years CPA has emphasized the potential risk for companies when their stated policies may fail to align with their spending to influence elections, including payments made to trade associations that are active political donors.
This risk was a central theme of CPA’s “Collision Course” report in 2018. It appears that more companies are gradually becoming sensitive to this risk, especially as shareholders, investors and management firms pay closer attention to it.


ESG Shaping Investor Demands, Decisions

SPEAKING OF INVESTORS, a corporate secretary article confirms a trend that many of us have spotted; its headline declares, “ESG plays universally greater role for investors, survey finds.”   

According to the article, “All (100 percent) of the respondents to the Morrow Sodali study say ESG risks and opportunities have played a greater role in their investment decisions during the last 12 months. The result ‘undeniably reinforces that ESG integration has become an integral part of mainstream investment decision-making,’ the authors of the report write.”
Eighty-six percent of respondents cited climate change as the ESG topic having the most important impact, and ranked second, at 45 percent, was reputational risk.  “The fact that reputational risk is among the top three issues identified by respondents indicates the significant impact a company’s management of ESG issues is having on investment decision-making,” the survey report said.

CPA Names Research Associate

CPA has named Carlos Holguin, a recent graduate of Bowdoin College, as the Center’s Research Associate. Holguin previously worked as an intern for CPA. At Bowdoin, he was involved in researching various forms of racial and socio-economic inequality and working under Professor Marcos López—a researcher of migrant laborers. Holguin is from Colorado.
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
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