Less than two years after a landmark U.S. Supreme Court ruling removed barriers to “electioneering activity” by corporations and unions, a handful of the largest U.S. companies seem to be saying, “No thanks.”
A survey of practices at the S&P 100 revealed that two dozen of the largest U.S. corporations have publicly opted out of political spending funneled through independent committees that the Supreme Court’s Citizens United decision allowed. (Independent committees are also known as 527 organizations, named after the Internal Revenue Code section that defines them.)
In addition, 57 of the 100 companies voluntarily report their political expenditures and have instituted policies that include board oversight over those expenditures, while 43 provide information about their political spending channeled through independent committees and trade associations.
While some have received high marks, so far, none of the five Minnesota companies surveyed has explicitly ruled out donations to 527 organizations.
These are among the key findings released today by the Washington D.C.-based nonprofit Center for Political Accountability (CPA) and the Carol and Lawrence Zicklin Center for Business Ethics Research at the University of Pennsylvania Wharton School of Business.
Of the five Minnesota-based companies in the index, US Bancorp and United Health Group were named among 10 “Company Leaders In Disclosure,” while the Index report said Target Corp.’s experience in the Minnesota governors’ race last year “highlighted the risks of political activity” for companies.
Target’s $150,000 donation to an independent committee, MN Forward, that supported Tom Emmer’s candidacy caught flak from gay rights groups for Emmer’s anti-gay stance. The dispute led to a shareholder resolution, forced a board review and revised guidelines for political spending and ended with Target CEO Gregg Steinhafel issuing an apology.
US Bancorp (NYSE:USB) tied for No. 8 with a score of 84, along with Wells Fargo, another company with Minnesota connections. United Health Group (UNH) tied with several companies for No. 27 with a score of 62; Target (TGT) tied for No. 32 with a score of 56; Medtronic (MDT) tied for No. 53 with a score of 40; and 3M Co. tied for No. 70 with a score of 24.
3M spokeswoman Jacqueline Berry said the company had not seen the report yet. “We not only comply with all of the laws,” Berry said, “but exceed our disclosure obligations. We’re always reviewing our reporting and trying to strike a balance to ensure our management is permitted to engage and express views while also at the same time trying to share information with our shareholders.”
The other Minnesota-based companies did not respond to requests for comments.
The CPA-Zicklin Index of Corporate Political Disclosure and Accountability shows that “disclosure is becoming a mainstream practice,” according to CPA founder and President Bruce Freed. “A significant number of companies recognize the risk associated with political spending, and a growing number are not taking advantage of Citizens United, at least directly,” he added.
“These are the influential companies that set the trends by other companies and key groups,” Freed added, saying the survey reveals emergence of best practices. “There are real gaps and a great deal of work needs to be done,” he added. “What this shows is there movement in the direction of exposure and accountability.”
Four companies — Colgate Palmolive (NYSE:CL), Exelon (EXL), International Business Machines (IBM) and Merck (MRK) — all were given a perfect score of 100 for political transparency and accountability, based on 29 criteria measuring disclosure, policy and oversight. Ten companies scored zero: Amazon, Baker Hughes, Berkshire Hathaway, Cisco Systems, Costco, CVS Caremark, Devon Energy, Halliburton, Lowe’s Co., and MasterCard.
The CPA-Zicklin Index scores some of the largest blue-chip companies in America, based on information on their websites, across 29 different measures gauging their disclosure, policies and oversight of political spending. One company in the S&P 100, Philip Morris International, does not have operations in the United States and thus was excluded from the survey. In 2012, the Index will be expanded to rate the policies and practices of the S&P 500, CPA said.
The index is similar to another ranking of the S&P 100 on political disclosure issued by Baruch College in September that also scored companies on how easy the information was to find on company websites.
Here are links to each of the five S&P 100 Minnesota companies’ political disclosure documents.