Spotlight on CPA - December 2019
In This Edition:
Click to Jump to Story

 The Year Ahead for CPA

Founders Column
By Bruce Freed

This month marks the 10th anniversary of Citizens United. One of the most controversial and far-reaching Supreme Court decisions in recent years, it has provoked widespread interest in corporations engaging in political spending, as recently was noted in a report by The Conference Board:

Since the U.S. Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission—holding that the First Amendment prohibits government from placing limits on independent spending for political purposes by corporations and unions—shareholder interest in this area of corporate activities has skyrocketed.

The fallout from Citizens United has come to define CPA’s work as a data-generating think tank, advocacy group and catalyst for change. Congress is gridlocked and won’t bring sunlight to corporate political spending, and remedies appear unavailable from the courts. A decade after Citizens United, CPA is the only group that continues to be successful in bringing transparency and accountability to corporate political spending and changing company political spending behavior. 

In addition to continuing to press with our shareholder partners for more companies to adopt sunlight and political accountability (see separate article in this newsletter), here are further priorities for CPA in 2020, a presidential election year fueled with torrents of political “dark money”:
  • Promote a wider definition of accountability in company political spending decisions. With the rise of social media and millennial activism, companies need to place their political spending decisions and evaluation of their impact in the broader context of the company as a responsible member of society.
  • Fight efforts to shut down the proxy engagement process. The U.S. Securities and Exchange Commission, with the backing of leading business organizations, has proposed rules changes to undermine the use of the proxy to engage management and directors. 
  • Expand the “Collision Course” initiative, building upon our 2018 report by the same name that examined the risks to companies from political spending where the consequences conflict with company core values and positions. 
  • Detail public company political spending through key 527 groups, which are tax-exempt entities organized under section 527 of the Internal Revenue Code; and document the impact of this spending in reshaping state and national politics and policy over the past decade, as well as the implications for 2020 elections.   
  • Press institutional investors to look more broadly at their responsibility to their clients as they seek to influence company policy on political spending through casting proxies or engaging companies. Institutional investors manage the money for the vast majority of people who own stocks and wield significant sway over company policy and behavior.
  • Strengthen CPA’s research effort and capabilities, and promote our unique database.
  • Update the CPA Model Code of Conduct for Corporate Political Spending, in conjunction with The Wharton School’s Zicklin Center for Business Ethics. 
CPA and its shareholder partners have made huge inroads in the decade since Citizens United was decided. If you just glance through the articles in this newsletter, you’ll see numerous ways our credibility and successes are chronicled, all in one month on the calendar. But until universal and uniform corporate political disclosure is achieved, our challenge remains long-term and tough. 

Mutual Fund Support Grows for CPA Resolution Despite Continued Opposition by BlackRock, Vanguard and Fidelity
Large mutual funds’ support for CPA’s corporate political disclosure resolution continued to rise steadily in 2019, from 52.7 percent last year to 56 percent this year, a new CPA study showed. 

You can check out the highlights in CPA’s press release and read about it from such others sources as the Wall Street Journal’s 2020 Election plus Business newsletter, or from Axios

Here are excerpts from the WSJ newsletter: “Support for the proposals has grown in each of the last two years among 45 big fund companies that manage more than $40 trillion globally, including such giants as Fidelity, BlackRock and Vanguard, according to an analysis of fund votes on 33 such proposals by the Center for Political Accountability. The Washington, D.C., nonprofit advocates for increased political-spending disclosure. Fund-group support varies widely, however: This year, 22 supported at least 80% of the proposals and nine voted against all of them.”

And from Axios: “Mutual funds are increasingly backing proposals that push companies to provide more detail about their campaign spending.”

CPA’s study found that mutual fund support for the disclosure resolution rose even as the Big 3 institutional investors – BlackRock, Vanguard and Fidelity – remained outliers in their opposition.

Helpful context for these developments came from a recent Institutional Investor article. It was headlined, “The Surprising Firms Leading the Way on ESG Votes: Mutual funds that have nothing to do with ESG have voted for E&S resolutions in record numbers this year, according to a Morningstar analysis.” 

Conference Board: ‘Tipping Point’ on Disclosure? 

What’s on companies’ radar in 2020? A big year for proposals seeking corporate political activity disclosure, according to our friends at The Conference Board.

“The demand for corporate political activity disclosure may reach a tipping point in the months preceding the next presidential election,” The Conference Board stated in its press release about a report entitled “Proxy Voting Analytics (2016-2019) and 2020 Season Preview.” The release continued:

“While endowment funds of religious orders and special stakeholder groups were the first to call attention to social and environmental policies of corporations, these issues have now moved to the front and center of proxy seasons for traditional investors. The topics are wide-ranging: They span political contribution disclosure to compliance with human rights in the supply chain, to the disclosure of business risks resulting from the opioid crisis to the adoption of a climate change policy.”

Suggested Matthew Goforth, Vice President, Corporate Solutions at ESGAUGE, the data provider that contributed to the study, “In the months preceding the next presidential election, companies may witness a record number of shareholder proposals and engagement efforts on the disclosure of political activities, including monetary contributions to campaigns and lobbying.”

The lengthy report includes discussion of CPA’s model resolution for corporate political disclosure and accountability.


Harvard Business School Report Uses CPA Data
CPA has found it useful to draw an analogy between corporate political spending and an iceberg: only the tip of it is visible. A new Harvard Business School report is the latest to grapple with understanding the scale of this spending, and it partly draws on data developed by the Center.

Of particular interest in “A Recovery Squandered: The State of U.S. Competitiveness in 2019” is the following excerpt about corporate spending to influence elections:
Corporate election spending is channeled primarily through corporate political action committees (PACs) and, to a lesser extent, other types of entities, including super PACs, politically active trade associations, and so-called ‘social welfare organizations’ such as Americans for Prosperity and Organizing for Action—groups that lobby as well as organize to promote civic engagement and legislation. In the 2018 midterm election cycle, corporate PACs alone spent more than $400 million in federal elections, about 5% more than in the 2016 election. Total 2018 federal election spending by business is estimated at $2.8 billion. At the state level, business election spending was about $37 million in the 27 states where data are available for 2016. From 2009 to 2018, public companies were the largest source of funding supporting partisan groups in state-level races, such as the Republican Governors Association and its Democratic counterpart.
The $2.8 billion figure comes from the Center for Responsive Politics in a report about PAC and individual donations. The HBS report excerpt’s last sentence draws on data compiled by CPA and published in a major U.S. newspaper’s newsletter on business and the upcoming 2020 elections. 

Also of note are the report’s overall conclusions, excerpted here from its executive summary:
Chapter 3 highlights that business leaders are partly to blame for today’s hyper-partisan, gridlocked politics. Business has funded, perpetuated, and profited from political dysfunction. We describe the major ways in which businesses engage in politics today—by lobbying, spending on elections and ballot initiatives, influencing employees’ votes and donations, and hiring former government officials. We examine the prevalence and consequences of each of these. Our survey findings reveal that: • A high portion of business leaders seem not to be fully aware of how their companies are interacting with the political system. • While most business leaders deny that their own companies engage with politics in ways that undermine the public interest, most also believe that business as a whole engages in politics in ways that are bad for public trust in business and bad for America. • The majority of business leaders support reforms that would change how business interacts with the political system.


Broad Coverage of SEC Commissioner Jackson’s Letter on Corporate Political Disclosure
SEC Commissioner Robert Jackson, speaking at RI Americas 2018 (photo credit: Responsible Investor).
Although U.S. Securities and Exchange Commission Robert Jackson will step down in 2020, he continues his advocacy for transparency in corporate political spending.

In November Jackson outlined in a letter to Rep. Carolyn Maloney, D-N.Y. his analysis of the importance of requiring corporations to disclose the money they spend to influence elections (see November CPA newsletter). The letter continues to provoke commentary and debate, and he also delves deeper into the topic.

The Cooley LLP law firm blogged at length and in detail this month about Jackson’s advocacy, while also providing context by discussing findings of CPA’s latest annual scorecard of corporate political disclosure and accountability and separately, a CPA report issued in 2018, “Collision Course,” regarding the risks that companies face when their political spending and their core values conflict.

Paul Hodgson of Responsible Investor, meanwhile, similarly reported on Jackson’s letter and included mention of a forthcoming academic paper by Jackson, James David Nelson of the University of Houston Law Center, Lucian A. Bebchuk and Robert Tallarita of Harvard Law School, entitled, “The Untenable Case for Keeping Investors in the Dark.” The paper cites CPA’s work and gains in disclosure by large public corporations.


Jackson’s Likely Successor on SEC
It was reported by Reuters that the White House is expected to nominate Caroline Crenshaw to fill Commissioner Jackson’s seat. She is an attorney at the SEC, currently working as counsel to Jackson. Fully Updated
CPA's comprehensive database on corporate political spending,, is now updated to include all voluntarily disclosed political contributions from S&P 500 companies from 2015-2018, as well as CPA-Zicklin Index scores dating back to 2013. When first launched in 2017, for the first time shined a light on over $100 million in previously hidden money given by companies to trade associations and “social welfare” organizations, also known as 501(c)(4)s.


Thank You to CPA’s Fall 2019 Interns
CPA interns Carlos Holguin and Amy Liu.
The Center for Political Accountability thanks Carlos Holguin and Amy Liu for their painstaking work this fall updating with all voluntarily disclosed election-related spending by S&P 500 companies, as well as their work on the Mutual Fund Vote Analysis and various other projects.

A Colorado native, Carlos Holguin recently graduated from Bowdoin College with a degree in sociology. He intends to gain experience at a law firm before considering law school. CPA is delighted to have Carlos returning to work with us in January until he begins his legal post.

From the Atlanta area, Amy Liu is a Junior at Carnegie Mellon University's Tepper School of Business. Amy joined CPA while participating in the Carnegie Mellon University Washington Semester Program (CMU/WSP) and after graduating she intends to enter a career that combines her interests in politics & policy, business administration, corporate governance, and corporate social responsibility.
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
Twitter Twitter
Facebook Facebook
Copyright © 2020 Center for Political Accountability, All rights reserved.

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list

Email Marketing Powered by Mailchimp