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)
Alliant Techsystems (ATK)
Altria Group (MO)
Bank of America (BAC)
CVS Caremark Corporation (CVS)
Devon Energy (DVN)
Dominion Resources Services (D)
EBay Inc. (EBAY)
Emerson Electric (EMR)
ExxonMobil Corporation (XOM)
General Dynamics (GD)
JPMorgan Chase (JPM)
Marathon Oil Company (MRO)
Marathon Petroleum (MPC)
Morgan Stanley (MS)
Norfolk Southern (NSC)
Peabody Energy (BTU)
Philip Morris International (PM)
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)
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
CTW Investment Group
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
Center for Community Change
Christopher Reynolds Foundation
Edward W. Hazen Foundation
Haymarket People's Fund
Max and Anna Levinson Foundation
Merck Family Fund
Oneida Tribe of Indians Trust Fund
Russell Family Foundation
Non-Profit Institutional Investors
Manhattan Country School
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 Sisters of St. Agnes
Congregation of the Sisters of the Holy Cross
Congregation of the Sisters St. Joseph of Brighton
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
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
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.
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.
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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