Political Spending Shareholder Resolutions: The Big Ten
Spring is in the air and that can only mean one thing: Investors across the country are gearing up to take on corporate executives at annual shareholder meetings.
Shareholders have filed more than 100 resolutions at companies asking for more information about electioneering and lobbying spending. Year after year, these types of resolutions are the most popular type of social resolutions that companies see. Since the U.S. Supreme Court’s 2010 Citizens United decision opened the floodgates to unlimited corporate political spending, investors have filed more than 500 resolutions calling for more transparency in corporate political activity.
This is also the time of year that the Corporate Reform Coalition, a group of investors, good governance advocates, elected officials and labor organizations (chaired by Public Citizen) steps up to make some serious hay around political spending resolutions.
This year, the coalition is highlighting ten companies’ political spending proposals. These companies represent a diverse set of industries, but they all have one thing in common: a lack of true transparency when it comes to how they influence policy in Washington. These companies are some of the biggest spenders on politics, and their influence peddling has gridlocked important issues like climate change, net neutrality and financial reform.
Of course, it goes without saying that the Securities and Exchange Commission (SEC) should step up to the plate and simply require corporations to disclose their political spending. If that happened, investors would be spared the need to go door-to-door. But until the SEC, and its Chair Mary Jo White, decides to take action, we’ll continue to push companies to do right by their shareholders.
So without further ado, here are our top ten political spending resolutions to keep an eye on this shareholder season (stay tuned for ways to get involved!):
AT&T’s shareholders are asking the company for increased disclosure of both its electioneering activities and its lobbying activities. According to AT&T’s own shareholders (in their proxy statement), AT&T has contributed at least $65.7 million in company funds on electioneering activity since the 2004, and spent $33.395 million on direct federal lobbying from 2012 to 2013. That’s a ton of shareholder cash, and shareholders are right to wonder where it’s going and if the company is involving itself in potentially controversial campaigns and issues. In fact, AT&T’s membership in the corporate bill mill ALEC (American Legislative Exchange Council), would suggest that it is involving itself in potentially reputation-damaging issues. ALEC has been behind such controverial legislation as “Stand Your Ground” Laws and laws that would penalize homeowners for installing solar panels on their homes.
Comcast’s shareholders are asking their company to be more transparent in its lobbying activity, and with good reason. The company has been one of the biggest opponents of net neutrality, and it’s also a real heavy hitter when it comes to lobbying expenditures. Shareholders say the company spent $33.56 million in 2012 and 2013 on direct federal lobbying, and a quick check at Comcast’s profile on Open Secrets shows that nearly every lobbyist employed by Comcast in 2014 previously held a position in government (including a couple former Congress members). Comcast is also a member of ALEC.
Verizon’s shareholders have filed a resolution seeking an annual report on the company’s election spending. In their statement, Verizon’s shareholders reference the Citizens United decision, and Justice Kennedy’s assertion that, “Disclosure permits citizens and shareholders to react to the speech of corporate entities.” Verizon is another opponent of net neutrality, and a member of ALEC.
The Big Banks
Perhaps no company better exemplifies corporate influence peddling like Citigroup. During last year’s “CRomnibus” fight, Citigroup lobbyists managed to slip a provision into the bill that makes it more likely that, should the bank fail, taxpayers will be on the hook to bail it out. That stunt earned them a fiery tongue-lashing from Sen. Elizabeth Warren, and now the company also faces more than one shareholder proposal calling for transparency in how it deals in politics. The first is a proposal seeking disclosure of lobbying expenditures, and the second asks the company to disclose the bonuses it gives to executives for taking high-ranking regulatory positions.
5. JPMorgan Chase
JPMorgan’s shareholders are looking for more transparency when it comes to the company’s lobbying expenditures. They note that JPMorgan has spent $33 million in the past five years on direct federal lobbying, and that it is a member of the U.S. Chamber of Commerce, which spent more than $91 million on lobbying in the first three quarters of 2014 alone. Shareholders also note that the U.S. Chamber actively lobbies against action on climate change, while JPMorgan maintains a strong environmental policy.
6. Bank of America
Increased transparency from the company with regard to its lobbying expenditures is among the issues Bank of America’s shareholders are raising. They note that the bank has come under scrutiny for its lobbying on controversial derivative swaps. Bank of America spent $5.87 million on direct federal lobbying in 2012 and 2013, and that doesn’t include lobbying expenditures in states.
The Tech Giant
One of the great ironies of Google is that, while it probably knows more information about each of us than we know about ourselves through our usage of its online products daily, it’s not terribly forthcoming when it comes to being transparent about its own activities. Very few companies can rival Google’s lobbying expenditures. Since 2012 Google has spent more than $50 million on lobbying, not including payments to the U.S. Chamber of Commerce. Google’s shareholders deserve to know how their money is being spent, and if Google’s lobbying is undermining its “Don’t be evil” mission statement. Shareholders have filed a resolution at the company asking for Google to be more transparent about its lobbying activities in Washington. To its credit, Google left ALEC last year.
Chevron has not one but two political spending related proposals on its proxy statement to contend with. The first asks Chevron to disclose its lobbying expenditures, and the second requests that the company refrain from spending in elections once and for all. Chevron’s shareholders note that the very act of corporations spending in elections has become incredibly contentious, with 85 percent of voters agreeing that, “corporations have too much influence over the political system today.” Chevron also recently entangled itself in the city council race in Richmond, CA, dropping $3 million on four candidates that ultimately lost. There’s no arguing that that’s not a gross misuse of shareholder funds, as well as a stain on Chevron’s reputation.
9. Duke Energy
After a series of disastrous environmental accidents last year, Duke shareholders filed a resolution asking the company to come clean at last year’s shareholder meeting. The proposal, asking for disclosure of Duke’s electioneering activity, garnered support from nearly half of Duke shareholders. This year, still not satisfied with Duke’s transparency policies, shareholders have refiled the same request. Duke shareholders note that the company ranks near the bottom on the CPA-Zicklin Index of Corporate Political Disclosure and Accountability.
Pfizer’s shareholders take issue with the company’s involvement with ALEC specifically. They’re asking the company to assess whether its values align with ALEC’s and suggest that Pfizer’s involvement with ALEC is not best for the long-term success of the company.
Over the next couple of month we expect shareholders to confirm (or rather reaffirm), the argument we’ve been making to the SEC since 2011: Investors want and deserve to know more about corporate political activity.