To press its arguments about the huge importance of corporate political spending today, CPA wrote an essay for FairPlanet, which calls itself a non-profit journalistic platform and organization.
CPA’s Freed, Director of Programs Dan Carroll and Counsel Karl Sandstrom said
there are three fundamental reasons to focus on the rivers of political dollars spent by publicly held companies:
“The first is that corporate political money, and public companies in particular, play a dominant role in elections, both at the federal and state level, which has significant policy and political consequences.
“Secondly, political contributions, not spending on lobbying, lay the foundation for political relationships. These relationships—based on friendship and a sense of indebtedness—play an outsized role in shaping public policy and legislation.
“Lastly, there are few, if any, checks on companies today.’
“As a result, corporations have an inordinate influence on setting the nation’s agenda and our state politics. Their spending has a tremendous impact on our democracy and the ability of our nation to address such critical challenges as climate change, gerrymandering, racial and gender inequities, inequality, and the role of money in politics.”
CPA Featured in S&P Global Webcast
S&P Global, a corporation that deals with financial information and analytics, featured CPA’s work in a recent podcast about the hottest ESG issues facing companies this proxy season.
CPA’s Freed told the ESG Insider podcast
that while corporate political spending long has been a top issue, two factors make it especially important in 2019: those instancs when a company’s spending is seen as conflicting with the company’s core values, in some cases raising reputation risk issues; and the rise of social media.
Shareholders at ExxonMobil will vote May 29 on a corporate political spending disclosure resolution, after the Securities and Exchange Commission recently rejected an ExxonMobil effort to prevent the vote.
According to PR Watch
SEC Greenlights CPA Model Resolution at Exxon
, “The SEC ruling comes on a shareholder proposal brought by the Unitarian Universalist Association (UUA) that would require Exxon to compile a semiannual report on its ‘political contributions and expenditures (direct and indirect) with corporate funds,’ as well as related company policies, and post it on the company's website.”
Exxon shareholders also will vote on a resolution to set up board-level committee to review and oversee Exxon’s strategy on climate change, according to PR Watch. The SEC also disapproved an Exxon attempt to derail that proposal.
Exxon contended in correspondence with the SEC
that it had substantially implemented the steps in the proposal. UUA, however, maintained that Exxon did not disclose its political payments to so-called “social welfare” non-profit organizations. The SEC sided with UUA and concluded, “[I]t appears that the company’s public disclosures do not substantially implement the proposal.”
Growing Signs of Changing Company Attitudes
You can call me a perennial optimist, but I keep seeing fresh indications that U.S. companies are increasingly receptive to CPA’s case for the great importance of corporate political disclosure and accountability.
By Bruce F. Freed
When we urge companies in private conversations to adopt policies regarding political disclosure and board oversight of political spending, we’re hearing more executives say out loud they recognize the need for such policies to protect them from embarrassment or worse.
That was never clearer than in a conversation we had earlier this year with the corporate secretary of a leading consumer company. He told us, unsolicited, that he saw robust political disclosure and accountability policies as critical to protecting the company from controversial political spending that could damage its brand and bottom line.
That recognition seems to be borne out in data from our own CPA-Zicklin Index for 2018. It found the number of core S&P 500 companies with a detailed policy governing electoral-related expenditures from corporate funds had increased to 267 last year from 261 in 2017 and 225 in 2015.
This month, Open Secrets reported that major corporations that engage in spending to influence elections are largely staying away from Super PACs in today’s hyper-partisan political climate (see related article in this newsletter).
“The controversial and often misleading nature of super PAC ads makes them another precarious proposition for corporations aiming to maintain a clean public image, given that contributions to these groups are disclosed to the public,” Open Secrets added.
Last month, The Dallas Morning News reported that “AT&T is bowing to activist shareholders calling for more transparency about the company's political spending, agreeing to disclose millions of dollars in previously untraceable contributions.”
David McAtee, Senior Vice President, General Counsel and head of AT&T’s Washington office, said that shareholders have long influenced AT&T’s public reports on political activity.
"When I became responsible for the report in 2018, we drew on those conversations, as well as on objective benchmarking data, to chart a path toward best-in-class transparency," McAtee said, according to the newspaper. "Our current report achieves that goal, and we look forward to continuing leadership in this area."
McAtee’s statement and AT&T’s commitment take on greater significance given the company’s previous position of reporting on its website only political spending information that was required to be disclosed by law.
With spending on the 2020 elections expected to set new records, it’s too soon to draw broader conclusions from these signs but they clearly bear watching.
In a First, CPA Interns Map Money to, and Spending by, Six Leading 527s