Shareholders Want Political Spending Transparency
RENEE MONTAGNE, HOST:
This is MORNING EDITION, from NPR News. Good morning. I'm Renee Montagne.
DAVID GREENE, HOST:
And I'm David Greene. This campaign season, corporations have been spending - and spending - to back candidates. Now one important group is demanding to know where all that money is going. We're talking about the company's shareholders.
A new report says that as publicly held corporations are gathering for their annual meetings, shareholders are asking a lot of questions about political spending, as NPR's Peter Overby reports.
PETER OVERBY, BYLINE: Ever since the Supreme Court handed down the Citizens United ruling in 2010, giving corporations and unions the right to spend freely in political campaigns, groups of shareholder activists have been campaigning for disclosure of corporate political money.
This year, about one-third of all the shareholder resolutions are promoting disclosure.
HEIDI WELSH: It's the issue that ate proxy season.
OVERBY: Heidi Welsh is director of the Sustainable Investments Institute. It monitors shareholder proposals on social and environmental issues. Welsh co-wrote the report being released today.
WELSH: Usually, investor activists want companies to do something on climate change. They want more information about corporate supply chains. But political spending has just expanded exponentially in the last three years.
OVERBY: The movement got an endorsement last week from one of the five members of the Securities and Exchange Commission. Right now, there is no requirement for corporations to reveal their political spending.
Commissioner Luis Aguilar wants that to change. He was speaking at a conference sponsored by the Practicing Law Institute.
LUIS AGUILAR: Requiring transparency for corporate political expenditures cannot wait a decade. It is the commission's responsibility to rectify this gap, and to ensure that investors are not left in the dark while their money is used without their knowledge or consent.
OVERBY: Of course, most corporations oppose this idea, and so do advocates of deregulating the political money system.
ALLEN DICKERSON: We've recognized for decades that disclosing information that is not economically material can be misleading.
OVERBY: That's Allen Dickerson, legal director of the Center for Competitive Politics. He says that disclosure, whether by regulation or by shareholder initiative, is just a bad idea.
DICKERSON: In practice, what this will do is require any corporation that wants to use its constitutional rights to submit to a highly politicized, highly partisan debate every year, on how they go about doing it.
OVERBY: But some proponents of disclosure say it's their duty to pursue it. Thomas DiNapoli is comptroller of New York State, which puts him in charge of a pension fund with $140 billion in assets.
THOMAS DINAPOLI: I think this is an area where it is very much a fiduciary responsibility, very much tied to the bottom line, to see how the corporate dollars of companies you're invested with, how that money is being spent.
OVERBY: Last week, DiNapoli said he's reached disclosure agreements with three corporations - Safeway, Pacific Gas & Electric and Sempra Energy.
And while there isn't exactly a trend, there is a steady campaign for corporate disclosure. Nearly 20 percent of the S&P 500 companies have signed on, the result of efforts by a group called the Center for Political Accountability.
Bruce Freed is president of the center. He says corporate managers need to understand the risks involved in playing politics.
BRUCE FREED: Once they give to a superPAC or to a (c)(4), they're exposed to all of the risks - and all of the blowback. And they don't know, you know, what the consequences could be.
OVERBY: He's referring here to 501(c)(4) advocacy groups. Unlike superPACs, they get to keep their donors secret, although the names sometimes leak out anyway. And if the disclosure advocates have a good proxy season, more corporations themselves could be agreeing to draw back the curtain.
Peter Overby, NPR News, Washington.
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