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Corporations have their cake and eat it too, then deny cake’s existence

A new report out today from the Union of Concerned Scientists (UCS) paints a fascinating picture of Corporate America’s involvement in our elections.

The report, titled “Tricks of the Trade: How companies anonymously influence climate policy through their business and trade associations,” provides compelling evidence that companies are increasingly using dark money nonprofits and trade associations to advocate for policies too controversial for the companies to support publicly, while also conveniently omitting their involvement with such groups.

The report analyzes a survey administered to more than 5,000 companies worldwide by the CDP (formerly Carbon Disclosure Project) . The annual survey seeks information on the companies’ positions on climate change, and in 2013 incorporated questions about companies’ involvement with politically active trade associations, such as the U.S. Chamber of Commerce.

Long story short, UCS’s analysis found that many companies are members of trade groups like the U.S. Chamber that obstruct policies to combat climate change, while the same companies seek public favor by supporting positive action to address climate change. The report also found that many of these companies failed to acknowledge their involvement with controversial trade associations, even when the information has been made public.

 Having their cake and eating it too

 Nobody wants to be unpopular — not even multi-national corporations.

This is presumably why so many companies were quick to disavow the obstructionist positions on climate change taken by the U.S. Chamber, National Association of Manufacturers (NAM) and American Petroleum Institute (API).

Of the 15 companies sitting on NAM’s Board of Directors that responded to the CDP survey, nine replied that their positions on climate change were inconsistent with those of the trade association.

The United Parcel Service responded that it does not support the U.S. Chamber’s positions on a variety of issues and went on to list climate change, the Clean Air Act, and the Clean Water Act as examples. Royal Dutch Shell acknowledged that it breaks with API on climate change, and General Electric, a board member of NAM and a member of the U.S. Chamber, disagrees with both groups on climate issues. Google is another notable company with green-energy bonafides that funds the U.S. Chamber.

 Despite the U.S. Chamber’s vocal opposition to policies that would achieve progress on mitigating climate change, the report found that not a single one of the companies on its board publicly supported the trade group’s position on climate change.

Chamber graphic big FINAL

 Because companies aren’t required to disclose their political spending, and trade associations aren’t required to disclose their donors, companies are getting the public relations benefits of saying they support popular positions (like fighting climate change), while funding groups that do the exact opposite (like opposing investments in wind or solar power).

Clearly, being associated the climate deniers isn’t popular, even if secretly funding them is in vogue.

 What cake?

 Another key finding of UCS’s report was that even when asked directly, many companies would rather not admit their association with politically active nonprofits and trade groups.

From UCS’s blog on the report:

“In the report we found that many companies choose not be transparent about their affiliations with trade and business associations, even when the information is publicly available. In addition, we found that when companies did choose to disclose their trade group board seats, many claimed to disagree with their associations’ positions on climate change, raising questions about who trade groups are actually representing on climate policy.”

UCS’s report analyzed the board members of the National Association of Manufacturers, the American Petroleum Institute, and Edison Electric Institute and found in their survey that fewer than half of the companies on the boards of these trade groups acknowledged their involvement.

The report concludes that many companies just don’t want to be associated with the trade groups they’re in and that many companies (supposedly) don’t even agree with the trade groups they fund.

What cake? There’s never been any cake!

When it comes to accountability, companies take a pass

Lack of accountability is the root of the problem. Without disclosure, these companies can say whatever they want publicly, do whatever they want privately, and easily avoid any accountability if those two things are incongruous. Furthermore, they don’t even have to disclose association with trade groups and nonprofits if they chose not to.

UCS came to a pretty similar conclusion in its report:

“Without greater transparency on how companies support their trade and business associations, it is impossible to know who is funding the groups’ political activities. As a result, companies are able to fund attacks on policy proposals that seek to address climate change—without being overtly affiliated with these practices.”

And in case anyone needs proof that stuff like that actually happens: See Aetna.

Aetna, while publicly supporting the Affordable Care Act, accidently disclosed a more than $7 million in donations to the American Action Network (AAN) and the U.S. Chamber. At the time, both AAN and the U.S. Chamber were blanketing the airwaves with ads denouncing Obamacare and any lawmakers they could tie to it.


What can we do about it?

Companies should not be allowed to have their cake, eat it too, and then pretend there was never any cake to eat in the first place.

And we have a great solution for that.

Among the solutions listed by the UCS report is the rulemaking where Public Citizen has been leading the charge since 2011: A rule from the Securities and Exchange Commission that would require publicly traded companies to disclose information to shareholders on their political spending..

This rule is a basic, commonsense solution that would put stop companies from saying one thing then doing the complete opposite. With disclosure, they won’t be able to pretend there’s no cake.

Let the SEC know today: Corporations should be accountable to their shareholders and the American public.

Kelly Ngo is the online advocacy organizer for Public Citizen’s Congress Watch division. Follow @CorporateReform on Twitter for updates on Public Citizen’s ongoing campaign for corporate political spending disclosure.