Spotlight on CPA - January 2021
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As Corporations Freeze Donations, CPA Has Breakout Moment 

When dozens of leading U.S. companies began freezing PAC donations in response to the insurrection on the U.S. Capitol, the media calls began to flood in.

Companies’ condemnation of the assault and of scores of lawmakers trying to overturn the presidential election offered an unprecedented opportunity for CPA. It used the moment to frame issues of corporate political spending for audiences ranging from Wall Street to shareholders to elected leaders and opinion influencers.

Within days, CPA was quoted in top financial and national news media including the Wall Street Journal, New York Times, Washington Post, CNN and NPR. The London-based Financial Times quoted CPA in news articles on Jan. 8 and Jan. 11 and there was coverage in Paris-based Agence France Presse.

Corporate decision-makers also could find CPA’s analysis in MarketWatch, Yahoo Finance, Bloomberg, Directors and Boards, Barron’s, Quartz, and Reset Work (a newsletter). Capitol Hill readers saw CPA mentioned in Politico and Roll Call, and other readers across the country read about CPA from CNBC, the Philadelphia Inquirer, the Minneapolis Star Tribune and the Atlanta Journal Constitution.

The Wall Street Journal highlighted CPA’s analysis that companies face heightened risk from political giving if the funds backed lawmakers who voted against certifying the presidential election victory of Democrat Joe Biden. CPA also underscored the broader context of companies coming under pressure over political spending:

“Since 2004, 200 of the S&P 500 companies have faced shareholder proposals seeking to limit political spending or to improve disclosure, according to the Center for Political Accountability, a nonpartisan group in Washington that works with investors to push companies to limit or better disclose political spending,” WSJ reported.

“Nearly half of companies in the index fully disclose or prohibit contributions to candidates, parties and political committees, up from 183 in 2015, according to the group. Most of those prohibit at least one kind of contribution altogether, often independent expenditures or contributions to candidates and political committees.

“A key factor is the backlash—from consumers, employees and investors—that companies can face for funding candidates who later take stands conflicting with popular sentiment or the company’s own public positions, said Bruce Freed, the group’s president. He expects companies to come under increasing scrutiny in coming weeks and months.

“’All of their statements become hollow if their political money is going to members who voted to overturn this election,’ Mr. Freed said. ‘The risk of political giving has gone up exponentially.’”

In the New York Times, Dealbook writer Andrew Ross Sorkin suggested that as companies pause their giving to candidates, they should reassess their giving entirely and make the halt permanent. His commentary took its headline from an interview with CPA:

“’This could be an epiphany moment’ for corporate chiefs, said Bruce F. Freed, the president of the Center for Political Accountability, ... ‘How should they engage in the political process? What do they get out of political spending? They have to take a look at the cost. Today the costs have gone way up.’”

And in the Financial Times, CPA also sought to inform readers about the swath of political spending that lies beyond PAC giving. The newspaper said CPA “added that contributions through PACs represented a small portion of total political spending by companies, whose payments through trade associations and tax-exempt funding organisations are not subject to the same disclosure requirements.”

Meanwhile, the website “Open Secrets,” at the Center for Responsive Politics, used CPA data and the annual corporate disclosure Index in its articles. They were headlined, “Impact of corporate PAC promises may be limited” and “Corporations rethinking PACs leave the door to ‘dark money’ open.”

Taken comprehensively, the news media coverage raised CPA’s profile and paved the way for CPA to gain higher-impact access to corporate decision-makers in upcoming months.  



CPA Teams with Harvard Business Prof. 
Michael Porter to Offer Solutions in Crisis

CPA teamed with prominent Harvard Business School Prof. Michael Porter in January to publish opinions in USA Today and the Boston Globe offering solutions in the aftermath of the Capitol siege and the divided vote in Congress over certifying the 2020 presidential election results.
The op-eds offered the new Model Code of Conduct for Corporate Political Spending as a template for companies to consider as they reassess their political spending. The Model Code was issued recently by CPA and the Wharton School’s Zicklin Center for Business Ethics Research.

The joint op-eds also emphasized that many companies’ focus on pausing political action committee spending did not address the millions of dollars spent on politics by companies through trade associations and other non-profit organizations, which can result in risk of backlash or worse for companies.

These commentaries highlighted the often-overlooked fact that while many companies condemned the Capitol insurrection effort, their political spending often contradicts their publicly stated principles, and that must change.

Porter has outlined suggestions for related structural reform in a Harvard Business Review article.

The USA Today opinion was headlined, “Big businesses say they are responsible, but too often they fuel conspiracy theories: Corporations have been condemning the Capitol insurrection, but take a closer look.”

The Boston Globe opinion was titled, “Companies need to reevaluate the full range of their political spending: Corporate funding has contributed to the degrading of our democracy. In many cases it conflicts with professed company stances, eroding public support for business.”



Philadelphia Inquirer Spotlights Vanguard, BlackRock as Outliers on Political Disclosure Votes

“What’s up, Vanguard and BlackRock?”

That’s the thrust of a Philadelphia Inquirer article highlighting the two large mutual funds as outliers in opposing CPA’s model political disclosure resolution last year.

“Vanguard, BlackRock lag State Street on some proxy votes seeking political donation disclosures: new study,” declared the newspaper’s headline. The article explained:

“Wall Street has slowly begun asking for more disclosure of political donations  -- although not every big institutional investor votes consistently for more transparency.

“That’s the conclusion of a new study by the Washington, D.C.-based Center for Political Accountability, which found that many Wall Street investment firms voted for shareholder proposals surrounding political donations during the 2020 proxy voting season, which ended in June 2020.

“But Malvern-based Vanguard and BlackRock have not been among them, according to the center’s December study.” The article discussed the data provide by the report and then quoted CPA:

“’The surge in support for disclosure reflects large investors’ recognition of the risks of political spending in today’s hyper-polarized environment, particularly in an election year,’ said CPA president Bruce Freed.”


CPA-Wharton Zicklin Model Code Sent to S&P 500

Seizing the moment, CPA has distributed to all companies in the S&P 500 Index the new Model Code of Conduct for Corporate Political Spending, offering it as a valuable tool when scores of companies are pledging to evaluate their practices.

The new Model Code was co-published by CPA and the Wharton School’s Zicklin Center for Business Ethics Research. First developed by CPA in 2007, it provides a framework to guide not only companies’ political spending, but also their assessment of its impact and related ethical and societal considerations.

In a letter to companies, CPA noted, “As you know, codes are not only a valuable resource to reduce legal, reputational, and social risk. A code’s content, and the consensus around its adoption, reflects the leadership, culture, and character of a company. Codes translate principles into shared norms, expectations, and action.”

Politico’s “The Long Game” newsletter reported on the distribution of the Model Code to companies. CPA also discussed the code in two major newspaper op-eds (see separate article in this newsletter), and in interviews with Directors and Boards, MarketWatch, Roll Call and the Minneapolis Star Tribune.


Guest Column: This May Be the “Morning in America” Moment for Corporate Political Spending

John Milton Cooper, Jr.
“Morning in America” has become a cliché of politics.
It began in the Reagan era, when, as far as money in politics goes, it became twilight in America, leading to a long dark night.

The daylight-darkness comparison is apt because since the beginning of the last century we have been through at least three cycles of exposure of the influence of big money, both corporate and individuals.

The first daylight episode came before World War I in the progressive era, when reformers battled to curb the power of the trusts and extend democratic accountability in politics.

Then came a decade-long dark spell in the 1920s, when conservative Republicans rode high and engineered a cozy partnership with dominant business elements.

The Depression and the New Deal put an end to that merger and ushered in the longest period of transparency in politics and restraint by corporations and the wealthy. There was some ebb and flow during nearly half a century, but broad agreement kept the balance between the public and private sector relatively stable.

Reagan’s “morning in America” ushered in almost as long a time of darkness. Unabashed greed became fashionable in the 1980s, and money flowed freely in politics. Unlike earlier, little opposition cropped up along party lines. Democrats joined in the game of chasing big donors.

The bipartisan teams of Senators McCain and Feingold and Representatives Shays and Meehan did try to put limits on contributions and sources of funds through legislation, but the Supreme Court’s Citizens United decision effectively nullified that effort.

Meanwhile, to pat ourselves on the back, the patient persistence of the CPA has gotten major businesses to disclose their political contributions and reconsider the impact of their spending.

This is a new approach, and the recent decisions of major corporations and trade associations to withdraw from political contributions is a promising sign that disclosure and self-regulation may be the wave of the future.

This time, there may be a true “morning in America.”

John Cooper chairs the Center for Political Accountability Board Directors. He is the Gordon Fox Professor Emeritus of American Institutions, University of Wisconsin-Madison.


Gary Gensler Brings Tough Regulator Record to SEC

President Joe Biden’s administration has announced the selection of Gary Gensler, a M.I.T. Sloan School of Management professor and financial regulator from the Obama administration, to head the U.S Securities and Exchange Commission.

Gensler headed the Commodities Futures Trading Commission from 2009 to 2014.

 “Progressives ‘are hoping the SEC under Mr. Biden will move swiftly to undo policy changes implemented by recently departed Chairman Jay Clayton. Those include curbs on shareholders’ ability to propose resolutions at company proxy meetings and efforts to make it easier for private companies to raise capital without registering with the SEC,’” the Wall Street Journal reported, according to the Washington Post.

“’Other priorities that a Democratic-led SEC are expected to consider include requiring companies to disclose more information about risks related to climate change and about workforce diversity and political contributions.’ Gensler could also push for more disclosure of corporate political spending, a subject making headlines this week.” 



Disclosure in the Spotlight

The business law firm Snell & Wilmer, in a posting about the 2021 proxy season, quoted from the 2020 CPA-Zicklin Index and discussed increasing support for political spending disclosure resolutions.

The law firm added, “Although these votes are nonbinding, boards do need to weigh heavily the results, as lack of responsiveness to precatory proposals could have implications for directors in regards to their duties under state law and its impact on future voting recommendations of the proxy advisory firms.”

Kurt Schacht, head of policy for the CFA Institute, wrote an analysis at that was titled, “Corporate Political Spending Disclosures: Not So Immaterial After All?”
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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