.] Meanwhile, only 8 percent of voters said that union endorsement of a candidate would make them more likely to vote for that candidate. The poll also revealed that 71 percent of voters believe that unions have tilted the system too far in their favor, thereby negatively impacting the economy.
The poll, which was completed by Public Opinion Strategies, surmised that voters believed “unions should place a higher priority on meeting the day to day needs of their members, rather than trying to affect the outcome of elections.”
As for the shareholder resolutions, investors such as Walden Asset Management, Domini Social Investments and Christopher Reynolds Foundation (a private grant-making organization committed to social, economic and environmental justice) filed proposals with Accenture, IBM, Pepsi and Pfizer (all sit on the U.S. Chamber board). Their proposals ask that the independent board members institute a comprehensive review of those companies’ political spending policies and oversight processes, both direct and indirect, including through trade associations. The proposals ask for a summary report to be issued by next September. [Read investors’ press release here
They want that report to include a review of the following:
- Disclosure of any direct and indirect expenditures supporting or opposing candidates, or for issue ads designed to affect political races, including dues and special payments made to trade associations, such as the U.S. Chamber of Commerce, or political and other organizations that can hide any contributions.
- Risks and responsibilities associated with serving on boards of and paying dues to trade organizations when positions of the trade association contradict the company’s own positions.
- Management and board oversight processes for all political spending, direct or indirect.
“As board members and major corporate contributors to the U.S. Chamber of Commerce, they [companies on the Chamber’s board] play a passive and compliant role, remaining silent while the Chamber reportedly poured $75 million into the 2010 election while working to unseat any member of the U.S. Congress who voted in favor of healthcare reform,” Timothy Smith, senior vice president of Walden Asset Management, said.
A scan of Pfizer’s website
found the following policy regarding trade association political contributions, which went into effect in 2007.
“Pfizer will request trade associations that received from Pfizer total payments of $100,000 or more in a given year to report the portion of Pfizer dues or payments used for expenditures or contributions that if made directly by Pfizer would not be deductible under 162(e)(1)(B) of the Internal Revenue Code. The company will disclose such information received from such trade associations semi-annually on the Pfizer Inc website. The first disclosure report will cover activity from January 1, 2007 to June 30, 2007.”
In its new Handbook on Corporate Political Activity
, The Conference Board Governance Center wrote the following about trade associations:
“Most trade associations shun controversial political activity. But given the relative freedom trade associations have to engage in political activity, it may be advisable for companies to inquire about how their own payments to trade associations are spent. Without this information about how its contributions are spent, a corporation may unwittingly end up supporting politicians or political causes with which the company may not want to be associated. It may also find its funds being used to promote positions that may not be aligned with its values or business strategies.”
The report, which was co-authored by Paul DeNicola, director of The Conference Board Governance Center; Bruce F. Freed, president of the Center for Political Accountability; Stefan C. Passantino, a partner at McKenna, Long & Aldridge LLP; and Karl J. Sandstrom, a lawyer with Perkins Coie LLP, cites a 2008 survey of 255 directors that found 75 percent supported disclosures of contributions made to trade associations and other tax-exempt organizations that were used for political purposes.
The debate over how trade associations spend corporate political contributions continues to be at the center of the fight between trade associations and institutional investors even after last week’s midterm elections. A handful of institutional investors filed shareholder resolutions at several U.S. Chamber of Commerce member companies that challenge those company boards to review the policies and oversight of political expenditures specifically regarding trade associations.
Meanwhile, the U.S. Chamber released exit poll results from the Workforce Freedom Initiative that shows voters believe the expansion of labor unions, whose pension funds are among the biggest institutional investors, will negatively affect the economy. The results of the exit polls were released the day after the elections.
In the poll, 51 percent of the 1,000 voters queried said that if unions become more influential in business and economic decisions it would harm the economy. Just 29 percent felt it would benefit the economy. [Read press release