Aetna Inc. and 19 other companies are being urged to disclose their contributions to independent political organizations by investors including unions and state pension funds with $922 billion in assets.
The New York State Common Retirement Fund and the UAW Retiree Medical Benefits Trust are among 25 investors who demanded to know how Aetna, the third-biggest U.S. health insurer, is wielding its political influence and giving money to advocacy groups such as the American Action Network, an organization opposed to President Barack Obama’s policies.
“Recent reports that the company accidentally disclosed over $7 million in donations to the American Action Network and the U.S. Chamber of Commerce suggest that the company continues to obscure the full extent of its spending,” the group wrote in an Aug. 7 letter to Aetna’s board. The shareholders also questioned whether the Hartford, Connecticut-based company was failing to report payments to groups that operate outside of campaign disclosure laws.
The investors who wrote Aetna include labor unions for auto, transportation and service workers, state pension funds in Illinois and New York, and religious organizations. The New York state fund had 1.4 million Aetna shares as of July 1 while the UAW trust had 286,000 shares.
Aetna has received the letter and will respond to investors directly, Cynthia Michener, a company spokeswoman, said in an e-mail. The insurer’s shares fell less than 1 percent to $38.80 at the close in New York.
The investor group declined to name the other 19 companies it is pressing to publicly disclose political donations, saying discussions on the issue are under way.
Campaign spending has come under scrutiny after the Supreme Court ruled in the 2010 Citizens United case that for the first time corporations and unions could spend unlimited amounts on ads advocating the election or defeat of a candidate. Those donations can fund political ads against candidates, on-the-ground operations and other activities that can help decide elections.
“Aetna’s effort to characterize millions in political donations it made in 2011 as ‘educational’ activities is a red flag for shareholders,” New York State Comptroller Thomas P. DiNapoli said in a statement.
Aetna gave at least $7 million to such groups in 2011, according to filings with insurance regulators that Aetna later modified to omit, according to the group of shareholders. In 2011, it gave $3 million to the American Action Network, and $4 million to the U.S. Chamber of Commerce. In 2009, America’s Health Insurance plans, the Washington trade group, secretly gave $86 million to the Chamber, Bloomberg reported.
“Regardless of whether the expenditures were for lobbying or for educational purposes, we still don’t know what the $7 million bought the company or its investors,” UAW Retiree Medical Benefits Trust Chairman Robert Naftaly said in a statement accompanying the letter.
The chamber and the American Action Network opposed the 2010 U.S. health-care law that was passed by Democrats without a single Republican vote. Republicans have made its repeal a cornerstone of their campaign to unseat Obama in the November election. The law puts new regulations on insurers, including limits on what they can charge customers and a requirement they sell plans to people with pre-existing health conditions.
Organizations not officially affiliated with a political party or candidate reported spending $305 million in the 2010 elections, or more than four times the amount of money such entities spent four years earlier, according to the Washington-based Center for Responsive Politics, a research group that tracks Federal Elections Commission filings.
Growing more sharply is a smaller set of groups that keeps secret the identities of donors who bankroll the ads. These outside organizations told the FEC they spent $137 million in the 2010 cycle -- 25 times the 2006 level.
The American Action Network describes itself as a Washington-based, conservative-leaning advocacy group that engages in political campaigns. It isn’t required to disclose its donors.
Aetna’s investors criticized those types of donations and said the lack of disclosure rules has “opened the door to virtually unlimited corporate political spending and lobbying through tax-exempt nonprofit organizations such as trade associations, chambers of commerce, and so-called ‘social welfare’ groups.”
Aetna disclosed its 2011 donations to political candidates on Aug. 24, which the investor group called insufficient and not timely enough to be informative.