A decade ago, the Center for Political Accountability and investors launched an initiative to bring transparency and accountability to corporate political spending, and it has gained significant traction.
Despite the effort’s sustained success, it has received criticism. Most prominently the U.S. Chamber of Commerce contends that secret political spending can be good for business. On the other side, Citizens for Responsibility and Ethics in Washington (CREW) has asserted in a report that voluntary corporate political spending disclosure does not work. CPA explains below why the critics are wrong:
IT IS REMARKABLE how many major companies recognize the value of transparency and have adopted good policies that they adhere to. Of course it is regrettable that disclosure in a voluntary system without a uniform standard can be haphazard and not always assured. In some instances, details are overlooked in the process of building a more robust reporting system; in fewer instances, companies willfully withhold pertinent information. Shareholders and boards need to be vigilant in policing their companies. Good corporate governance requires more than good policies; it requires monitoring and commitment originating at the highest levels of the company.
THE TRENDS on corporate political disclosure and accountability are highly encouraging. These include:
A steadily growing number of companies are voluntarily adopting political disclosure. The number of companies that have reached disclosure agreements with shareholders has climbed to 127 as of late April 2014, from zero in 2004. They represent a cross-section of American business and include Merck, Microsoft, Exelon, Aflac, CSX, Noble Energy and Comcast.
Despite different levels of disclosure among companies, their acceptance of disclosure matters and helps build momentum for other non-disclosing companies. Disclosure is widely recognized by companies as a good corporate governance practice and as an integral element of risk management.
Companies are broadening their political disclosure. The annual CPA-Zicklin Index, started four years ago to benchmark companies on disclosure policies, shows companies broadening and strengthening their disclosure year over year. More companies now than ever before disclose direct contributions as well as payments for political purposes to trade associations and 501c4 “social welfare” groups, major sources of “dark money.”
THE NEXT STEP, CPA believes, is making company political disclosure uniform and universal. The Securities and Exchange Commission has been considering for nearly three years a petition submitted by a committee of eminent law professors for a corporate political disclosure the rule. The petition has received a record number of comments. It was made possible by the precedent of widespread company adoption of voluntary political disclosure. CPA supports the petition for a political disclosure rule.
Thank You Manhattan Institute for Promoting Corporate Political Disclosure
Founders Column: By Bruce Freed
The Manhattan Institute for Policy Research and other top defenders of secret political spending are trying once again to discredit the Center for Political Accountability and our allies and corporate political disclosure. Their latest broadside was unveiled in a webinar for representatives of leading U.S. corporations.
The March 7 discussion was devoted to “Shareholder Activism Concerning Corporate Spending Disclosures.” After seeing the slides used for the webinar, I wondered what the sponsors may be trying to hide.
Their tactics hint of desperation. They repackage misrepresentations we have seen before, that CPA allegedly plays fast and loose with the facts and seeks to remove America’s business community from the public policy debate. Total bunk. (See our refutation of earlier Manhattan Institute criticisms.) Then comes a single slide that may be speak volumes about our critics’ motivations.
It is entitled “The Slippery Slope.” The slide asks, “If activists win this argument – what’s next?” It lists these “demands” that shareholder might make of corporations: for disclosure of U.S. jobs “exported” overseas; for greater disclosure of public policy expenditures; for disclosure of “business done with/in countries labeled human rights violators by State Dept.”; and for disclosure of all “ex-US facilities that do not comply with US environmental and labor standards.”
An e-mailed invitation to participate in the webinar was sent out over the name of Lisa Rickard. She’s an executive vice president of the U.S. Chamber of Commerce, and she leads the Chamber’s Institute for Legal Reform. Webinar panel participants included Brian Cartwright, former Securities and Exchange Commission general counsel; Andrew Pincus, partner, Mayer Brown; and James Copland of the Manhattan Institute.
Thank you, Manhattan Institute and the U.S. Chamber of Commerce. If our work were not effective, there would be no need to push back. We appreciate your spotlighting our work, help raising the profile of the Center for Political Accountability and highlighting the steady growth of corporate political disclosure.