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October 04, 2011
Almost 500 Firms Asked to Disclose Political Spending
    by Robert Kropp

Citing the risks posed to corporations by Citizens United, the Center for Political Accountability asks companies to adopt disclosure on political spending in advance of 2012 proxy season.


Between the present day and the 2012 elections stands the 2012 proxy season. Less that one year remains, then, for sustainable investors to exert their influence upon political donations by corporations. In the wake of Citizens United, many are justifiably concerned that corporations, and the trade associations to which companies pay membership fees, will use their vast financial resources to effectively buy the election.

To offer but one example: during the 2010 midterm elections, the US Chamber of Commerce earmarked $75 million to spend on elections, and undoubtedly its dollars played a significant role in establishing the radical anti-regulatory rhetoric at the heart of the reelection strategies of House Republicans.

Sustainable investors, activists seeking fair elections, and corporate governance advocates found themselves at a disadvantage in 2010, because Citizens United, decided by the Supreme Court in January, occurred too late for shareowner resolutions to be submitted in time for the proxy season that year.

But such is not the case this time around, and, in advance of preparations for the 2012 proxy season, the Center for Political Accountability (CPA) has sent letters to 423 corporations that do not disclose their political contributions, pointedly asking them to "adopt political spending disclosure and accountability ahead of the 2012 proxy season."

Citing concerns of "heightened pressures companies face to support candidates, groups and causes whose positions and activities could threaten corporate reputation, bottom line and shareholder value," the letter from CPA informed its recipients that not only are shareowners supporting proposals addressing corporate political spending in growing numbers; influential proxy advisory firms are increasingly recommending that their powerful institutional clients do so as well.

Suggesting that corporations view it as a resource on the issue, CPA also revealed that in late October it will be publishing an Index that ranks the quality of political disclosure by the nation's largest corporations.

CPA has thus far engaged successfully with 90 major US corporations, convincing them to adopt policies addressing political spending and board oversight of the issue. More than half the companies are listed in the S&P 100. The leading companies also report their payments to trade associations such as the Chamber, and in some cases directly request that their membership payments not be used for political purposes.

 

 
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