Oracle Sued by N.Y. Pension Over Political-Giving Disclosureby
Company records on donations sought in Delaware suit
Stockholder oversight called necessary to prevent abuse
New York Comptroller Thomas DiNapoli, seeking greater disclosure of corporate political donations, sued Oracle Corp., demanding that the world’s largest database maker reveal its political spending records.
DiNapoli, a Democrat backed by labor unions, has been using his position as the sole trustee of New York’s $184.5 billion pension fund to press corporations to make their donations public after the Supreme Court’s 2010 ruling in Citizens United allowed companies to make political gifts without limitations.
Much of DiNapoli’s pressure applied through the fund has been in the form of shareholder proposals that have led to changes in companies from U.S. Steel Corp. to Southwest Airlines Co. and Harley-Davidson Inc. In 2013, he settled with Qualcomm Inc. in a suit similar to the one filed against Oracle in Delaware on Tuesday.
DiNapoli says Redwood City, California-based Oracle didn’t live up to a 2007 agreement with the Sheet Metal Workers’ National Pension Fund to provide an annual report disclosing policies for political contributions. The company also didn’t respond to specific requests from the New York fund for those records, according to the lawsuit.
“Investors need to know how and where corporate dollars are spent on political causes so we can decide if the donations are in the company’s own best interest,” DiNapoli said in an e-mailed statement. “Oracle, unfortunately, has denied our right to review the relevant books and records that would allow us to make informed investment decisions.”
Deborah Hellinger, an Oracle spokeswoman, didn’t immediately respond to a request for comment.
Oracle and its executives, including its billionaire founder, Larry Ellison, are major political donors, according to the suit, which cited data from the Center for Responsive Politics, a Washington-based nonprofit. The firm’s Oracle PAC spent more than $1.1 million in 2012 and 2014 elections combined. In 2012, Ellison made $3.1 million in donations and last year hosted a fundraiser in his home for U.S. Senator Rand Paul of Kentucky, who is a Republican presidential contender.
The suit, filed in Delaware’s Chancery Court, applies a law generally known as a books-and-records demand. Typically used to force the disclosure of records that would help prove waste or wrongdoing by executives, DiNapoli’s complaint contends political donations can create risk for companies that shareholders need to be aware of.
One of the key justifications used in the Citizens United ruling for allowing unlimited corporate political giving was the assumption in the majority opinion that stockholder oversight would ensure executives spend in the corporations’ best interests, DiNapoli’s suit argues.
(An earlier version of this story misstated the date of the filing. )