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The CPA-Zicklin Index of Political Accountability and Disclosure

How Leading Companies Navigate Political Spending in the Wake of Citizens United

Executive Summary

On the eve of the 2012 elections that could see record political spending, data from the CPA-Zicklin Index reveal some striking findings:

• Voluntary disclosure of political spending is becoming a mainstream corporate practice, and
• A growing number of companies are putting restrictions on the political use of their money.

The CPA-Zicklin Index is the first comprehensive portrait of how the largest U.S. public companies, those in the S&P 100 Index, are navigating political spending. It yielded these key results:

DISCLOSURE and OVERSIGHT, OR NO SPENDING: Fifty-seven companies, or almost three-fifths of the largest publicly traded companies in the United States, disclose their direct corporate political spending and have adopted board oversight, or they prohibit spending corporate cash on politics. The two companies that prohibit any spending are Colgate-Palmolive and International Business Machines.

RESTRICTIONS: Thirty companies, or almost one-third of the S&P 100, place some prohibitions on using corporate funds for political activity.

INDIRECT SPENDING: Forty-three companies disclose some information about their indirect spending through trade associations or other tax-exempt groups.

INDEPENDENT EXPENDITURES: Twenty-four companies, or one-fourth of the S&P 100, state on their websites that they will not make independent expenditures, allowed by the U.S. Supreme Court’s 2010 ruling in Citizens United.

NO DIRECT SPENDING: Sixteen companies, or one in six in the S&P 100, say that they do not spend treasury funds directly on candidates or political committees. Colgate-Palmolive and IBM prohibit use of corporate funds for either direct or indirect political activity.

TOP RANKINGS: Based on seven key indicators covering disclosure, policy and oversight, the 10 companies receiving the highest scores are Colgate-Palmolive Co., Exelon Corp., International Business Machines, Merck & Co. Inc., Johnson & Johnson, Pfizer Inc., United Parcel Service Inc., Dell Inc., Wells Fargo & Co., and EMC Corp.

In 2003, the Center for Political Accountability began engaging corporations to voluntarily provide disclosure and oversight of political spending. Few, if any, companies disclosed their political spending then.

In October 2011, the first CPA-Zicklin Corporate Political Disclosure and Accountability Index reflects significant progress. It also reflects troubling gaps that leave many shareholders, and citizens, in the dark.