Largest U.S. Companies Increasingly Disclose Political Spending
The largest U.S. companies are increasingly disclosing to shareholders the donations they make to political candidates and interest groups, according to the Center for Political Accountability.
While few companies shared such information eight years ago, 55 members of the Standard & Poor’s 100 Index now disclose direct political spending and have their boards oversee it, according to a study released today by the center, a nonprofit group in Washington. Also, 43 release some information about indirect spending on politics, such as through a trade group.
The findings are “striking” at a time when government watchdogs are raising concerns about more hidden money in the political system, said Bruce Freed, president of the center, which advocates for transparency in corporate contributions.
“They offer hope for increasing corporate political transparency,” Freed said in a statement. “S&P 100 companies are making voluntary disclosure of political spending a mainstream practice.”
The center worked with the Carol and Lawrence Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School in Philadelphia to create the CPA- Zicklin Index.
The index identified Colgate-Palmolive Co. (CL), Exelon Corp. (EXC), International Business Machines Corp. (IBM), Merck & Co., Johnson & Johnson (JNJ), Pfizer Inc. (PFE), United Parcel Service Inc. (UPS), Dell Inc. (DELL), Wells Fargo & Co. (WFC) and EMC Corp. as the top 10 companies for transparency and accountability.
Protecting Bottom Lines
Corporations may be protecting their bottom lines. While a Supreme Court decision in 2010 freed companies to spend unlimited money on advertisements advocating the defeat or election of a candidate, few have done so.
The risks of becoming too involved in politics became clear soon after the ruling when Target Corp. (TGT) last year made a $150,000 donation to MN Forward, a business advocacy group that ran ads supporting a Republican candidate for governor in Minnesota, Tom Emmer, who opposed gay marriage. Gay rights groups boycotted the retailer and Target Chief Executive Officer Gregg Steinhafel apologized.
Exelon said it decided to disclose its campaign finance activities after a request by a shareholder.
“If we have an investor that would like to have this information, is there really any reason not to provide it?” said Bruce Wilson, senior vice president, deputy general counsel and corporate secretary at Chicago-based Exelon. “We couldn’t think of any.”
Getting ‘Attention’
Exelon doesn’t make any contributions to groups that advocate for or against candidates, Wilson said. The company does donate to individual politicians, he said.
“It’s important to have relationships,” Wilson said. Being active with contributions “allows us to get someone’s attention,” he said.
IBM and Colgate-Palmolive prohibit any corporate spending on politics.
That has been IBM’s policy for 100 years, said Christopher Padilla, vice president for IBM Governmental Programs. Employees of the Armonk, New York-based computer maker “are encouraged to participate in politics as private citizens,” Padilla said.
Most investors say disclosure of companies’ political contributions is either “important” or “critical,” according to a survey by Institutional Shareholder Services, which advises pension funds and institutional investors on shareholder meeting proposals.
“Recent incidents where companies have received unfavorable media attention as a result of their political contribution activities demonstrate the risks/consequences of gaps in the oversight and evaluation of such activities,” ISS said in its policy statement.
To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Alison Fitzgerald in Washington at afitzgerald2@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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