Ron Robins of Abercrombie and Fitch received a letter urging the company “to join with over a hundred major companies and make political spending disclosure and accountability a corporate practice. In 2012 the company sent $5000 in donations to Obama and the year before they spent a measly $120,000 on lobbyist, all that information is public under current disclosure laws. Half the companies on the S&P 100 stock market index, the letter said have recognized the dangers and have demonstrated leadership by disclosing the details of an implementing board oversight of their spending”. Disclosure or we can make things very difficult for you. Hundreds of executives received letter like this one last year. They were signed by various people, many with titles like director of shareholder advocacy at left-leaning investment funds. The letters were signed by Bruce Freed, may be the most important figure in American business you’ve never heard of.
A former journalist and democratic congressional staffer, is the founder and president of the Center for Political Accountability, a nonprofit, nonpartisans organization—formed to address the secrecy that cloak much of the political activity engaged in by companies and the risk this poses to shareholder value. Since it began in 2003 CPA has received $1.2 million in seed money form the Open Society Foundations, funded by SOROS. Soros backed move on. Org, common cause, and media matters for America, as well as the large unions, CPA is leading a coordinated effort to get some of the country biggest and most profitable publicly traded corporations to disclose all spending related even tangentially to politics.
CPA are putting pressure on companies to adopt political disclosure, to curb the independence of trade associations and to change the behavior of companies and trade associations in their political spending. Every spring companies are required by the SEC to inform their shareholders of the issues pending at the annual shareholder meeting. Shareholders used to agitate for companies to rein in executive compensation but internal support was seldom the goal.
The CPA and its allies have used the proxy process aggressively to hassle corporate boards to adopt more sweeping disclosure of their political spending.
As You Sow, an umbrella group for activist shareholders at least 125 proposals related to political spending are expected in 2013 proxy season. Filing these proposals are either pension funds, like the NY State common retirement fund and the CA state teachers retirement system or “socially responsible” investor groups.
Trillium Asset Management extracted a major concession from Boston based financial firm State Street. After a Trillium backed disclosure proposal received 44% shareholder support. That proxy advisory firms ISS and Glass Lewis “recommend voting for proxy proposals” expanding political disclosure. AFL_CIO is one of ISS’s largest clients and Glass Lewis is owned by a teacher’s union fund in Ontario.
The actual shareholders vote for disclosure proposals, Manhattan says was just 17% across fortune 200 companies in 2012 a seven year low. But internal pressure from proxy proposals is just one part of Freed’s strategy; another is “peer pressure”. The letter to Abercrombie cities Aflac, Exelon, Merk, Microsoft and wells fargo as companies with “sound political disclosure.
Freed’s letter cities the CPA-Zicklin index as demonstrating that “political disclosure and accountability is becoming a mainstream corporate practice” the fact is no corporation with a brand to uphold wants to find itself out of the mainstream or citied by any corporate watchdog. IBM, Colgate, Goldman, and Praxair were left off the CPA-Zicklin index because they were wise enough to engage in no political spending.
Two weeks ago officials at the SEC announced they were considering a new rule to require all publicly traded companies to disclose their political spending. Consideration came after an overwhelming petition drive from SORO-funded groups like COMMON CAUSE, PUBLIC CITIZEN FOR RESPOSNSILITY AND ETCHIC in WASHINGTON.
Freed insists that CPA’s goal isn’t to discourage companies from spending money on politics. He aims to “solidify” disclosure “as a corporate governance standard and really lock in place best practices”.
AND NOW YOU KNOW HOW OBAMA GETS THE LIST OF WHO IS GIVING WHAT TO WHOM
Sources—weekly standard, Michael warren, Washington journal