The New York Times had a great front-page story on Sunday about corporations contributing to politically active non-profits in order to shield their campaign contributions from public view. That’s not a revelatory thesis – I’ve written about a suit by campaign-spending reformers to force such non-profits as Karl Rove’s Crossroads GPS to disclose corporate donors – but the Times dug deep for examples of specific corporate contributions, such as the $3 million that Aetna gave to the U.S. Chamber of Commerce, which was initially described in a regulatory filing as a “lobbying expense.”
Bruce Freed of the Center for Political Accountability read about Aetna’s donation to the Chamber with great interest. Aetna, you see, is one of more than 100 large public companies that have agreed in the last several years to disclose their political spending. Most of those disclosure agreements have come under pressure from shareholders, who (often with CPA’s help) have demanded proxy votes on resolutions calling for corporations not only to disclose their policies and procedures for political spending but also to itemize all contributions, direct or indirect, that are intended to influence an election or referendum.
These shareholder demands for disclosure have become increasingly common, thanks to the U.S. Supreme Court’s 2010 holding in Citizens United v. Federal Election Commission, which said indirect corporate political spending is protected by the First Amendment. (Direct spending, as we’ve reported, may be another story.) Forcing companies to own up to their political involvement “has become even more critical,” the CPA website says, because Citizens United means “companies face greater pressure to spend corporate dollars either directly or indirectly through conduits such as trade associations and [non-profits].”
Exceedingly few shareholder resolutions calling for disclosure have received majority shareholder votes in favor – Wellcare was the only company whose shareholders approved a resolution this year – but according to CPA, the disclosure campaign is gaining traction. Freed’s group said in June that resolutions gained more than 30 percent approval from shareholders at 13 of the 25 corporations where political spending disclosure was up for a vote this proxy season.
Even more important, Freed told me, is the dialogue that has opened up between shareholders and corporations, which has produced the 101 disclosure agreements his group touts. But the Aetna example prompts a question that I put to Freed on Monday: What happens if a corporation flouts its promise to disclose all political spending to shareholders?
