Spotlight on CPA - April 2019
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News Outlets Rely Heavily on CPA’s TrackYourCompany Data

Major corporations that engage in spending to influence elections are largely staying away from Super PACs in today’s hyper-partisan political climate, while state-level contests are providing numerous companies “better bang for a corporation’s buck,” Open Secrets reported this month.

The article from Open Secrets, part of the Center for Responsive Politics, relied extensively on data collected by the Center for Political Accountability and underscored trends that CPA has documented.

Also this month, the watchdog group MapLight published analyses of political spending by two industry sectors in 2017, likewise drawing on CPA’s TrackYourCompany data. Together, these articles showed some of the ways CPA data is getting broad usage and attention.

“Corporations contributed $71.5 million to super PACs and hybrid PACs in the 2018 election cycle, accounting for less than 5 percent of contributions to the powerful outside groups,” Open Secrets said.

“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 explained.

At the state level, by contrast, “527 committees for both parties happily raise the bulk of their funds through corporations and trade associations.”

“According to CPA data, of the $562 million raised by the Republican Governors Association from 2010 to 2018, 37 percent came from publicly held corporations and their trade associations and another 17 percent came from private companies. The Republican State Leadership Committee, which focuses on state legislature races, raised 59 percent of its funds from publicly-traded corporations and their trade associations.” CPA was releasing data on the Democratic counterpart groups later.

The article chronicled some of the public firestorms that have erupted and brought criticism of corporations, and even calls for boycotts, over controversial political spending in recent years.

“Going forward, companies are going to be much more careful with their contributions, because now they’re facing a reputation risk, a bottom line risk and the threat of a controversial contribution going viral on social media,” CPA’s Freed told Open Secrets. 

The MapLight analyses published in April were titled “Health-Care Corporations Flooded Political Campaigns With Cash in 2017” and “Unleashed by Citizens United: Energy, Utility Giants Poured $60 Million Into 2017 Campaigns.”

Strong Votes for Political Disclosure, More Agreements As 2019 AGM Season Opens

Corporate political disclosure showed strong momentum as the 2019 annual meeting season opened with high votes at three companies and withdrawals at two more that agreed to adopt or strengthen political disclosure and accountability policies.

The Center for Political Accountability’s model resolution received 42 percent at Centene, 32 percent at JB Hunt and 26 percent at Northern Trust. The resolutions were filed respectively by Friends Fiduciary, International Brotherhood of Teamsters, and Unitarian Universalist Association.

“Our investor partners have significantly moved the ball forward and are reinforcing corporate political disclosure and accountability as the norm,” said CPA President Bruce Freed. “The additional agreements show that companies recognize political disclosure as not only good governance but also in their self-interest as they head into a contentious election season.”

Earlier, CPA shareholder partner New York State Comptroller Thomas DiNapoli withdrew a political spending resolution at The Kroger Co. after the company agreed to full disclosure of all election-related spending. The New York State Common Retirement Fund, of which DiNapoli is the trustee, had reached an agreement with Kroger in 2012 but the company’s adherence eroded over time, bottoming with a 2018 score of 28.6 percent in the CPA-Zicklin Index. As a result of the new agreement, Kroger could likely move into the first tier in the forthcoming 2019 Index.

Friends Fiduciary, another CPA partner, reached an agreement with Alexion Pharmaceuticals Inc. The company promised full disclosure of all election-related spending. Alexion receive a 10 percent score in the 2018-CPA Zicklin Index. After implementing the terms of the agreement, Alexion could likely be in the first tier, if not a Trendsetter, in the 2019 Index.

The new agreements bring the number to 12 for this proxy season. Fifty-seven companies received the CPA model resolution this year.

CPA partners that negotiated the other ten withdrawals include Investor Voice (GE and Ameriprise Financial); New York State Comptroller DiNapoli (Hilton); Mercy Investment Services, Inc. (Mondelez International); Trillium Asset Management (Chubb); John Chevedden and Jim McRitchie (Tractor Supply Co. and MSCI); International Brotherhood of Teamsters (Ball Corp.); Clean Yield Asset Management (SVB Financial Group); and the Nathan Cummings Foundation (Devon Energy).


Infographic Highlights Corporate Political Spending’s Prominence as ESG Issue 
CPA’s model resolution accounted for a significant share (see orange in chart) of ESG shareholder activity over the past decade. The chart is included in the Sustainability Investments Institute’s recent report on “Shareholder Proposal Trends & Key Issues in 2019.”



FairPlanet: CPA on Why Corporate Political Spending Needs to be Addressed

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.

Listen here.


SEC Greenlights CPA Model Resolution at Exxon

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, “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
Founder's Column
By Bruce F. Freed
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.

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
CPA thanks its three interns who spent the past several months mapping, for the first time, the contributions to, and spending of, six leading political committees that reshaped state politics over the past decade. The Center will be using and sharing the interns’ research in the near future, and the hard work and dedication they put into it will be evident.

Alex Hymer (left) studies International Relations at the University of Edinburgh and joined CPA while participating in a one-year exchange program with George Washington University’s Elliot School of International Affairs. A resident of the United Kingdom, Alex expects to graduate from Edinburgh in July 2020.

From Purcellville, Virginia, Jack French (center) is a Double Major in Economics and International Affairs at James Madison University, graduating May 2020.

Ben Becker (right) is a Political Science Major at Colgate University and plans to add Computer Science for a double major. A Center Valley, Pennsylvania native, Ben expects to graduate in May 2021.
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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