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Spotlight on CPA - July 2019
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CPA Data Ties Public Companies’ Trade Association & 527 Committee Contributions to Controversial Anti-Abortion Legislation

Contributions by leading public companies and their trade associations to a state-focused 527 committee facilitated the enactment of extreme anti-abortion legislation in Georgia, Missouri and Alabama earlier this year, two news outlets reported. The articles drew on Center for Political Accountability research.

CPA mapped contributions to and spending by the Democratic and Republican governors associations, state legislative campaign committees and attorneys general associations from the 2010 to 2018 election cycles. It also mapped the consequences of 527 political committee spending.

Rewire news service spotlighted the public companies and trade associations that accounted for 58 percent – or $25.9 million – of the $45.2 million raised by the Republican State Leadership Committee in the 2018 election cycle. “Corporations including Verizon and Pfizer financed a political group that aided in the election of the state lawmakers behind some of the country’s most extreme abortion bans,” it wrote. Other companies included Berkshire Hathaway, Comcast, AT&T and Coca-Cola.

Stat News, a Boston Globe publication which covers life and health sciences, zeroed in on the pharmaceuticals. Asking “if you’re a drug maker, you wouldn’t contribute to political candidates whose positions might crimp your bottom line, right?” it quickly answered, “Well, you might.” 

It went on to list Pfizer, Merck and Johnson & Johnson and the amounts the companies contributed to the RSLC for the 2018 cycle: $325,000 by Pfizer, $52,000 by Johnson & Johnson, and $24,000 by Merck. 

According to the article, “… it would seem the companies acted against their own financial interests, according to Bruce Freed, who heads the Center for Political Accountability, a nonprofit group that studies corporate donations, What he calls ‘under-the-radar’ donations are often not known to shareholders, consumers, and employees, but can quickly go viral in a ‘polarized and hyper-charged’ political environment.

“’Companies give to third-party groups and don’t always pay attention to how their money is used,’ Freed explained. ‘However, they can be associated with consequences that are controversial or conflict with their core values, positions, product lines, and business strategies.’” 

Rewire’s and Stat New’s reporting builds on CPA’s Collision Course report that was the first examination of the heightened reputational and business risks companies faced from the outcomes of their political spending that conflicted with their core values and positions. It laid out how companies could manage the risks. 
 
 

 
 
New Info-Graphics Highlight CPA’s Banner Proxy Season

A series of graphs prepared by the Sustainable Investments Institute (Si2) underlined CPA’s impact over the past decade. The graphs, which follow, compared the number of proposals filed and the votes on election-related spending (the Center’s model resolution), lobbying and other political activity. A third tracked the disposition of election-spending proposals, whether they were withdrawn, voted on or omitted. 

 

 


Harvard Law School Blog Carries CPA Proxy Season Recap
 
The Harvard Law School Corporate Governance and Regulation Blog carried CPA’s post with final results for the 2019 proxy season. 
 



America’s Corporate Political Spending Challenge: An Historical Perspective

Guest Column
By John Milton Cooper, Jr.

 
Money in politics, particularly spending by big interests, is as old as the American republic. Alexander Hamilton’s banking policies were ploys to enlist the major financial players in the new government under the Constitution. Thomas Jefferson and James Madison founded their opposition party, the ancestor of today’s Democrats, in reaction to those policies. A generation later, Andrew Jackson declared war on the Bank of the United States and reshaped the two-party system around that conflict and his outsized personality. 

Every presidential administration between Jackson’s and the beginning of the twentieth century would feature one or more scandals involving business spending to gain favors. The most notorious ones came under Ulysses Grant, with Credit Mobilier involving railroad grants and the Whiskey Ring involving huge tax evasions.

The present-day situation involving corporate political spending really took shape at the beginning of the last century. By then, the industrial revolution had fully taken hold and spawned corporations on a scale never seen before. These behemoths, popularly called “Trusts”, literally threatened to overshadow and dominate the government itself. Reaction against them prompted the various reform movements that took the name of “progressive.” Theodore Roosevelt railed against “malefactors of great wealth” and revived the largely moribund Sherman Anti-Trust Act. His successors William Howard Taft and Woodrow Wilson stepped up the pace of anti-trust actions and pushed enactment of stronger anti-trust laws and a regulatory agency, the Federal Trade Commission.

The progressive era saw the dawn of public engagement aimed at curbing the influence of money, particularly corporate money, over the passage of laws and conduct of government. It would be comforting to see a straight line of amelioration in these areas over the last century, but that has not been the case.

Concern and engagement have waxed and waned in the decades between their time and ours. For about forty years following the New Deal, both moneyed political influence and grave inequalities of wealth stayed within bounds set by prospects of vigorous government action. That détente came to an end in the late 1970s, and both political spending and economic inequality came roaring back. Bad as it is, the Citizens United decision simply iced a cake that was already well baked.

Some observers have compared the last half century to what prevailed before the progressive era---the Gilded Age. It took the work of many hands and the thoughts of insightful minds to bring about the reforms of progressivism. Ending this second Gilded Age will take the same kind of endeavor.

Mr. Cooper is chair of the Center for Political Accountability board and a professor emeritus of American history at the University of Wisconsin-Madison. 





Meet CPA's Summer Interns
 
CPA interns Andrew Isaac, Billy Kennedy and Liam Daly (from left to right)

The Center for Political Accountability thanks Andrew Isaac, Billy Kennedy, and Liam Daly for their collection of data for the 2019 benchmarking of the political disclosure and accountability policies of S&P 500 companies. The Index has been published annually by the Center since 2011 and has covered the S&P 500 since 2015. 

Born and raised in Los Angeles, Andrew Isaac is a senior at University of California, Davis, majoring in Community and Regional Development with a Minor in Political Science. After finishing with CPA in August, Andrew is spending the fall studying at the London School of Economics and will graduate from UC Davis in December. 

From Greenbelt, Maryland, Billy Kennedy is a senior at University of Maryland and will complete his degree with a concentration in International Relations and a minor in Astronomy in December. Beginning in January Billy is volunteering with the Peace Corps in South Africa to work on HIV/AIDS outreach.

Liam Daly is entering the fourth year of a five year joint-degree program in Law & Political Science at Trinity College Dublin. After completing the program, Liam, a New York City native, is considering a return to the U.S. to earn an LLM, which would qualify him to sit for the bar exam in New York, as well as many other jurisdictions.

 


Wanted: Fall Interns

CPA is seeking fall interns to be engaged in important research on corporate political spending, the path of dark money in political campaigns, and other areas related to the CPA's work on corporate political spending and activity. The program provides an introduction to Washington and includes speakers from journalism, Capitol hill and the corporate/lobbying and advocacy communities. Travel stipend and academic credit available.

See CPA's internship posting for more information about the position and how to apply. Please contact Dan Carroll, the Center's Vice President for Programs, with any questions.

 
 


House Financial Services Panel Debates ESG Disclosure

Environmental, social and governance disclosure (ESG), a topic of heightened prominence for companies, asset managers and investors, was the focus of a congressional hearing in early July. The House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets heard from a range of supportive and critical witnesses including CalPERS, the Global Reporting Initiative, Ceres and Patomak Global Partners, a consulting firm. The issue is now before the Securities and Exchange Commission which received a petition last fall from a coalition of investment managers, public pension funds and non-profits to develop a robust ESG disclosure framework.

 





Surge in Money to ESG Funds

The Wall Street Journal reported strong investor interest in investment firms that focus on ESG in their investments. “A record amount is flowing to investment managers who specialize in socially responsible investing, providing a bright spot for stock pickers who have otherwise struggled to keep client money,” the Journal wrote on July 11. Some asset managers, such as Neuberger Berman, use the CPA-Zicklin Index as an important tool to engage companies in their portfolios. 

 




Breaking News: Responsible Investor Digs into Difference between Lobbying and Election Spending

With shareholder resolutions being filed calling for disclosure of lobbying and election-related spending, Responsible Investor’s Paul Hodgson tackled the overlaps and differences. As he wrote, “…the distinction between lobbying and political spending is not that well understood in the US, never mind Europe. So what is the difference?” His column provides a good explanation.
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 www.politicalaccountability.net.
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