Trillium Asset Management Solicits Shareholder Support for “No Political Spending” Proposals at Bank of America, 3M
As the annual stockholder meetings of 3M and Bank of America approach next week, Trillium Asset Management has reached out to shareholders seeking their support for our shareholder proposals at the two companies. The proposals call upon the companies to cease making all types of political contributions, both directly and indirectly through third-party vehicles. Read the full press release here.
Prohibit Political Spending From Corporate Treasury Funds – 3M (2012)
WHEREAS:
Political spending and corporate money in politics is a highly contentious issue, made more prominent in light of the 2010 Citizens United Supreme Court case that affirmed companies’ rights to make unlimited political expenditures to independent groups. In the 2012 election year, we expect even more media and public attention to corporate spending to influence elections. Experts predict that an unprecedented amount of money will be spent in the 2012 election season.
Recent polls highlight the public’s disapproval. In a June 2010 Harris poll, 85% of voters said that corporations “have too much influence over the political system today….” In February 2010, an ABC News/Washington Post poll found that 80% opposed Citizens United, noting, “the bipartisan nature of these views is striking in these largely partisan times.”
Corporate political contributions can backfire on a corporation’s reputation and bottom line In a Harris Poll released in October 2010, a sizable portion (46)% of respondents indicated that if there were option, they would shop elsewhere if they learned that a business they patronized had contributed to a candidate or a cause that they oppose. In 2010, Target Corporation was subjected to consumer boycotts, and protests for their support of a controversial candidate whom 3M also supported.
According to the Center for Political Accountability, 3M has spent approximately $1.5 million in corporate funds to political activities since 2002. However, this figure does not include payments to trade associations or other tax-exempt organizations that may channel corporate money to political ends.
Many trade associations that receive corporate contributions spend vast sums in electoral politics; these payments are not required to be disclosed. For example, the U.S. Chamber of Commerce pledged to spend between $50 and $75 million in the 2010 election season, and announced that it would work to unseat any member of Congress who voted for healthcare reform. According to Public Citizen, only 32% of groups broadcasting electioneering communications in the 2010 primary season revealed the identities of donors in their Federal Election Commission filings, down from nearly 100 percent in the 2004 and 2006 cycles.
Increasingly, companies such as IBM, Colgate Palmolive, Wells Fargo and others are adopting
policies prohibiting spending of political funds directly or indirectly to influence elections.
Given the risks and potential negative impact on shareholder value, the proponents believe 3M should adopt a policy to refrain from using treasury funds in the political process.
RESOLVED:
The shareholders request that the board of directors adopt a policy prohibiting the use of corporate funds for any political election or campaign.
SUPPORTING STATEMENT:
We believe this policy should include any direct or indirect contribution that is intended to influence the outcome of an election or referendum. It should also prohibit the use of trade associations or non-profit corporations from channeling our company’s contributions or membership dues to influence the outcome of any election or referendum.
Ford Motor Company – Report on Political Contributions
RESOLVED
The shareholders of Ford (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:
1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary political contributions and expenditures not deductible under section 162 (e)(1)(B) of the Internal Revenue Code, including but not limited to contributions to or expenditures on behalf of political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code and any portion of any dues or similar payments made to any tax exempt organization that is used for an expenditure or contribution if made directly by the corporation would not be deductible under section 162 (e)(1)(B) of the Internal Revenue Code. The report shall include the following:
a. An accounting of the Company’s funds that are used for political contributions or expenditures as described above;
b. Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
c. The internal guidelines or policies, if any, governing the Company’s political contributions and expenditures.
SUPPORTING STATEMENT
As long-term shareholders of Ford, we support transparency and accountability in corporate spending on political activities. These activities include direct and indirect political contributions to candidates, political parties or political organizations; independent expenditures; or electioneering communications on behalf of a federal, state or local candidate.
Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with recent federal ethics legislation. Absent a system of accountability, company assets can be used for policy objectives that may be inimical to the long-term interests of and may pose risks to the company and its shareholders.
Ford contributed at least $1 million dollars in corporate funds since the 2002 election cycle. (CQ’s PoliticalMoneyLine: http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.)
However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political contributions, including payments to trade associations and other tax exempt organizations. This would bring our Company in line with a growing number of leading companies, including Pfizer, Aetna and American Electric Power that support political disclosure and accountability and present this information on their websites.
The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.
