48 Public Companies Face Investor Pressure to Disclose Their Lobbying

48 Public Companies Face Investor Pressure to Disclose Their Lobbying

 Investors have filed shareholder resolutions at 48 corporations as part of a 2014 proxy season initiative asking companies to annually report their federal and state lobbying. That includes any payments to trade associations used for lobbying as well as support for tax-exempt organizations that write and endorse model legislation.

The resolutions also ask companies to disclose payments to and membership in tax-exempt organizations that write and endorse model legislation.

New York State Comptroller Thomas P. DiNapoli, an active proponent of corporate disclosure of both political spending and lobbying, stated, “Transparency is fundamental to strong corporate governance and key to the New York State Common Retirement Fund's engagement with our portfolio companies.”  DiNapoli's office oversees the $160.7 billion state fund.  “We need sunlight on lobbying operations so we can evaluate potential risks to our investments. Any political spending, including lobbying, made with shareholder dollars should be disclosed.”

This is the fourth year proposals asking for lobbying disclosure have been filed by investors. In 2013, 70 proponents filed 50 proposals, and the 40 that went to vote averaged 26 percent support. For 2012, 46 proponents filed 38 proposals, and the 20 that went to vote averaged 24 percent. And in 2011, the AFSCME Employees Pension Plan filed six proposals and the five that went to vote averaged 24 percent. 

Sixty investors have joined in filing and co-filing the resolution seeking comprehensive disclosure of corporate lobbying. This investor network is organized by the AFSCME Employees Pension Plan and Walden Asset Management, a division of Boston Trust & Investment Management Company. 

Specifically, the resolution asks for disclosure of:

1.         Company policy and procedures governing lobbying, including that done on the company’s behalf by trade associations.

2.         Payments used for lobbying and grassroots lobbying communications.

3.         Membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4.         Decision-making processes and oversight by management and the board.

Among companies receiving lobbying disclosure resolutions for 2014 are:

Abbott Laboratories (ABT)

Accenture (ACN)

Alliant Techsystems (ATK)

Allstate (ALL)

Altria Group (MO)

Ameren (AEE)

Amgen (AMGN)

AT&T (T)

Bank of America (BAC)

BlackRock (BLK)

Boeing (BA)

Celgene (CELG)

Chevron (CVX)

Citigroup (C)

Comcast (CMCSA)

ConocoPhillips (COP)

CVS Caremark Corporation (CVS)

Devon Energy (DVN)

Dominion Resources Services (D)

EBay Inc. (EBAY)

Emerson Electric (EMR)

ExxonMobil Corporation (XOM)

Facebook (FB)

FirstEnergy (FE)

General Dynamics (GD)

Google (GOOG)

Honeywell (HON)

IBM (IBM)

JPMorgan Chase (JPM)

Lorillard (LO)

Marathon Oil Company (MRO)

Marathon Petroleum (MPC)

Morgan Stanley (MS)

Norfolk Southern (NSC)

Peabody Energy (BTU)

Philip Morris International (PM)

Raytheon (RTN)

Reynolds American (RAI)

Sallie Mae (SLM Corporation)(SLM)

Time Warner Cable (TWC)

United Parcel Service (UPS)

United Technologies (UTX)

UnitedHealth Group (UNH)

Verizon Communications (VZ)

VISA U.S.A. Inc. (V)

Wal-Mart (WMT)

Yahoo (YHOO)                                    

Filers of lobbying disclosure resolutions are:

Public Pension Funds

State of Connecticut Treasurer’s Office

New York State Common Retirement Fund 

Labor Pension Plans and Organizations

AFSCME Employees Pension Plan

AFL-CIO

CTW Investment Group

United Steelworkers

Asset Management Companies

Boston Common Asset Management

Domini Social Investments

First Affirmative Financial Network

Green Century Funds

Rockefeller and Co.

Sustainability Group, Loring, Wolcott & Coolidge

Trillium Asset Management

Walden Asset Management

Zevin Asset Management

Foundations

Brainerd Foundation

Center for Community Change

Christopher Reynolds Foundation

Edward W. Hazen Foundation

Haymarket People's Fund

Lemmon Foundation

Max and Anna Levinson Foundation

Merck Family Fund

Needmor Fund

Oneida Tribe of Indians Trust Fund

Russell Family Foundation

Tides Foundation

Non-Profit Institutional Investors

Manhattan Country School

Religious Filers

Benedictine Sisters Charitable Trust, Boerne, TX

Benedictine Sisters of Baltimore – Emmanuel Monastery

Benedictine Sisters of Mount St. Scholastica

Catholic Health East

Community Church of New York

Congregation of Divine Providence, San Antonio, TX

Congregation of Divine Providence, San Antonio, TX

Congregation of Sisters of St. Agnes

Congregation of the Sisters of the Holy Cross

Congregation of the Sisters St. Joseph of Brighton

Dignity Health

Episcopal Church

First Parish Unitarian Universalist, Cambridge, MA

First Unitarian Congregational Society in Brooklyn

Friends Fiduciary Corporation

Glenmary Home Missioners

Marianist Province of the United States

Maryknoll Fathers and Brothers

Mercy Investment Services

Missionary Oblates of Mary Immaculate

Monasterio Pan de Vida

Providence Trust

Province of St. Joseph of the Capuchin Order

Sisters of Charity of the Blessed Virgin Mary

Sisters of Notre Dame

Sisters of Notre Dame de Namur, Boston

Sisters of the Holy Family, CA

Sisters of the Holy Spirit and Mary Immaculate

Unitarian Universalist Association

Individuals

Gun Denhart

Gwendolen Noyes

Ronald Trimmer

Here is an example of the proposal, filed with Google: 

Whereas, we believe it is important that Google’s lobbying positions, and processes to influence public policy, are transparent.  Public opinion is skeptical of corporate influence on Congress and public policy and controversial lobbying activity may pose risks to our company’s reputation.

Google spent approximately $31.35 million in 2010, 2011 and 2012 on federal lobbying, according to Senate reports.  But this figure may not include grassroots lobbying to influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures. The reports also do not include contributions to tax-exempt organizations which write and endorse model legislation.

Resolved, the shareholders of Google request the Board authorize the preparation of a report, updated annually, and disclosing:

1.         Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2.         Payments by Google used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3.         Google’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4.         Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Google is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Audit Committee or other relevant Board oversight committees and posted on the company’s website.

Supporting Statement

               We encourage transparency about the ways corporate funds influence legislation and regulation, directly and indirectly. We commend Google for updating disclosure on its website on political spending and lobbying but the company still does not disclose details about lobbying through trade associations, maintaining secrecy about its payments used for lobbying by these associations. 

               For example, the U.S. Chamber of Commerce spent over $1 billion in lobbying since 1998, yet any Google funding of the Chamber is secret. The Chamber has also sued the EPA for its work on climate regulation.             

               In addition, Google reportedly sits on a task force of the American Legislative Exchange Council (ALEC) which has launched a “high priority campaign” to repeal renewable energy standards in states.  

               In contrast, Google’s website publicly affirms its commitment to “protecting the environment.”

               It is in Google’s best interests to review its public policy advocacy and oversight and expand its public disclosure about third party lobbying.

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Learn more: Law Professors Bebchuk and Jackson Bemoan SEC’s Delay in Considering Corporate Political Spending Disclosure Rules; Should The SEC Require Disclosure Of Companies’ Political Activities?

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