Best Buy – Political Contributions
WHEREAS
The Best Buy web site appears to have a thoughtful, transparent process for reviewing political spending.
The web site states that Best Buy will consider, among other criteria for contributing corporate funds to candidates and issue campaigns, “alignment with Best Buy’s core values.”
However, in July 2010 Best Buy donated $100,000 to a political group, Minnesota Forward, which actively supports a gubernatorial candidate who is a vocal opponent of same-sex marriage, as well as full parenting rights for same-sex couples.
Best Buy has been known for forward-looking policies and benefits for gay and lesbian employees, having an explicit policy that bans discrimination based on sexual orientation and offering domestic partner benefits.
The Minnesota Forward contribution resulted in a major national controversy with demonstrations, petitions, threatened boycotts and considerable publicity.
After the Supreme Court’s Citizens United decision, companies may now use corporate funds to pay for ads supporting or opposing candidates directly and to contribute to state or local elections. Previously this was illegal.
According to the Wall Street Journal (8/7/10), Minnesota Forward was created in the wake of the Supreme Court decision to collect donations by corporations. While Minnesota Forward focuses on candidates with tax and business policies it supports, it appears to ignore a candidate’s broader social or environmental positions in making endorsements and contributions.
Since Best Buy management is using shareholder monies for this and other political contributions, we believe it would have been prudent to undertake a comprehensive review of the implications of such contributions for our company’s reputation and business competitiveness before donating $100,000. We are concerned that management may use the open door of the Citizens United decision to intervene in numerous controversial political contests that could harm the Best Buy brand.
Therefore, in the aftermath of Citizens United, we believe the Board should re-evaluate Best Buy’s policies and practices regarding political spending and disclose to shareowners what new policies will be instituted.
RESOLVED
The shareholders request that the independent members of the Board of Directors institute a comprehensive review of Best Buy’s political contributions and spending processes including:
- The criteria used for such contributions and the broader impact contributions may have on the company’s reputation, public image with consumers and business sales and profitability, including how hoped-for benefits are balanced with the broader costs of endorsing a candidate whose policies may conflict with Best Buy’s publicly expressed values;
- Direct or indirect contributions to candidates and issue ads aimed at affecting political races;
- Support for ballot initiatives at the state level;
- Contributions through trade associations such as the U.S. Chamber of Commerce, and tax exempt organizations (e.g., 501(c)4s and 527s) which can redistribute contributions for political purposes without having to disclose such transactions; and
- Oversight processes by management and the Board.
The report may omit confidential information and costs may be limited.
Investors Call on 3M and Pentair to Review Political Contributions Policies
Trillium Asset Management Corporation, Walden Asset Management and Domini Social Investments issued a press release calling on Pentair and 3M Corporation to adopt emerging best practices of political contribution policies in light of recent controversies over political donations. The press release was issued in conjunction with shareholder proposals filed at Pentair and 3M asking the companies’ Board of Directors to prepare a report on policies and procedures for political expenditures and accounting of all political contributions.
Click here to read the article from the Minneapolis Star Tribune
Click here to read the press release
State Street – Political Contributions Report
RESOLVED
The shareholders of State Street (“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 through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient 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
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
Transparency and accountability in corporate spending on political activities is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with recent federal ethics legislation. Political 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. 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.
Relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, payments to trade associations used for political activities are undisclosed and unknown. The proposal asks the Company to disclose all of its political contributions, including payments to trade associations and other tax exempt organizations.
The financial crisis highlights the need for this disclosure. Despite widespread calls for comprehensive regulatory reform to prevent another crisis, there has been surprisingly little action by Congress or the Administration. The role of the financial industry and trade associations in the failure to achieve meaningful reform was raised this fall when President Obama and administration officials called on the financial industry to stop lobbying against proposed financial reforms.
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.
Haliburton – Report on Political Contribution
RESOLVED
The shareholders of Halliburton (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:
- Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds;
- 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:
- An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above;
- Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Halliburton, 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.
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 Hewlett-Packard, 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.
Ford Motor Company – Political Contributions
RESOLVED
Shareholders of Ford Motor (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:
- Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
- 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:
- An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above;
- Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Ford Motor, 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 Motor contributed at least $1.7 million 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 Hewlett-Packard, 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.
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.
Ford Motor – Report on Political Contributions
RESOLVED
The shareholders of Ford Motor Corporation (“the 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.
The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Ford Motor, we support policies that apply transparency and accountability in corporate spending on political activities. Such disclosure is consistent with public policy and in the best interest of the Company’s shareholders.
Company executives exercise wide discretion over the use of corporate resources for political activities. These decisions involve political contributions, called “soft money,” and payments to trade associations and related groups that are used for political activities. Most of these expenditures are not disclosed. The Company has contributed at least $300,000 since the 2000 election cycle. (Center for Political Accountability, http://www.politicalaccountability.net/files/TAFord12-13-06.pdf).
However, its payments to trade associations used for political purposes are undisclosed and unknown. 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. The result: shareholders, and in many cases, management do not know how trade associations use their company’s money politically. The proposal asks the Company to disclose its political contributions and payments to trade associations and other tax-exempt organizations.
Absent a system of accountability, company assets can be used for political objectives that are not shared by and may be inimical to the interests of the Company and its shareholders. Relying on publicly available data does not provide a complete picture of political expenditures. 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.
2008 Advocacy Priorities
For the 2007-2008 shareholder resolution season (which roughly parallels an academic year), Trillium Asset Management Corporation (“Trillium”) has filed 18 shareholder proposals addressing a wide range of environmental and social justice concerns. Thirteen resolutions on which we are acting as lead* filer are highlighted in this article. All the proposals we are involved in are posted on our web site.
Among its Wall Street peers, Bank of America (BAC)‘s internal greenhouse gas (GHG) reduction goals look good upon a first read: the bank has pledged that emissions from its own offices by will decline 7 percent from 2004 levels by 2008. Yet the bank finances GHG-intensive coal power plants and mountain top removal (MTR) coal mining projects that feed them. MTR destroys rivers, streams and habitats as well as the tops of mountains. We are asking BAC to observe a moratorium on all financing of MTR coal mining and the construction of new coal-burning power plants that emit carbon dioxide.
Trillium and Green Century Capital Management[1] are pioneering the first oil sands resolutions at ConocoPhillips and Chevron, respectively. Oil sands are large tracts of sand and rock material beneath Canada’s dense boreal forests that reportedly hold over a trillion barrels of crude oil. The extraction process requires volumes greater water and energy than ordinary oil drilling, endangering the regions ecology and preventing Canada from meeting its Kyoto Protocol commitments. Our resolutions press the two companies to report on the extensive environmental damage that will result from their expanding oil sands operations, and the ensuing impacts on greenhouse gas (GHG) emissions, water resources, biodiversity and indigenous populations.
In the utility sector, we are pressing Alliant Energy to adopt incentives that will enable it to profit by reducing greenhouse gas emissions by improving its customers’ energy efficiency. Alliant is set to build a new 630-megawatt coal-fired power plant that will emit several million tons of carbon dioxide per year.
For the fifth consecutive year, we are continuing to press Chevron on its pollution legacy in the Ecuadorian rainforest and elsewhere. This year, the New York City pension funds became the lead filer of the resolution we filed last year that asks Chevron’s Board to report on the policies that guide how the company assesses host country laws and regulations, and their ability to adequately protect human health and the environment.
On the topic of environmental health, we are again asking Dow Chemical to establish an independent scientific panel to research and report on the links between Dow pesticides and asthma, in collaboration with the Pesticide Action Network North America.
Working with a shareholder-NGO coalition that formed in response to the massacres in Darfur, Trillium has filed resolutions at JPMorgan Chase, Morgan Stanley and Merrill Lynch, which are among the largest shareholders in foreign oil companies whose business with Sudan finances the government’s mass atrocities in Darfur. We’ve also been in discussion with Citigroup. We’re asking these Wall Street firms to press the foreign oil companies to persuade the Sudanese government to stop obstructing the deployment of UN peacekeeping forces in accordance with UN Resolution 1769. We are also in dialogue with Schlumberger, an oil services firm with operations in Sudan.
Closer to home, Trillium is leading a large coalition of shareholders in a long-running effort to get Home Depot to disclose its Equal Employment Opportunity data (a detail of workforce composition by race, sex and rank). This data disclosure is viewed as an effective incentive to spur companies to develop programs to break glass-ceiling barriers.
Since 1995, Trillium has been a leader in promoting corporate sexual orientation nondiscrimination policies. We have filed resolutions at Expeditors International and Pentair, the only two transportation stocks in our universe who lack such policies, to amend their written equal employment opportunity statement to explicitly prohibit discrimination based on sexual orientation. We are also joining the New York City pension funds in re-filing a sexual orientation policy resolution at ExxonMobil – for the 11th year, but who’s counting? — that asks the company to adopt nondiscrimination protections for “gender identity” as well.**
Shareholders campaigns over the past three years have spurred corporations to adopt a critical piece of governance reform in the form of detailed disclosure of political donations. Relying on publicly available data does not provide a complete picture of political expenditures. Shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Ford Motor and General Motors have yet to improve their transparency, prompting our shareholder resolutions asking each company to disclose its political contributions and payments to trade associations and other tax-exempt organizations (We are the lead filer at Ford and are co-filing with Catholic Healthcare West at GM). We are also in dialogue with Dominion Resources and several other companies in this area.
* We often file in coalition with other social investors, and as the word implies, the “lead” filer takes on the organizing role.
[1]Trillium is the sub-advisor for Green Century Capital Management’s Balanced Fund.
** Statutes usually define gender identity as “having or being perceived as having a gender related identity or expression whether or not stereotypically associated with a person’s assigned sex at birth.” Persons in need of such protections often include (but are not limited to) those who are physically transitioning to, or choose to present themselves as, the opposite of their sex at birth.
Report on Political Contributions – Eli Lilly
USE OF SHAREHOLDER RESOURCES FOR POLITICAL PURPOSES
Resolved, that the shareholders of Eli Lilly (“Company”) hereby request that the Company provide a report updated semi-annually, disclosing the Company’s:
Policies and procedures for political contributions (both direct and indirect) made with corporate funds. Monetary and non-monetary contributions to political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code including the following: An accounting of the Company’s funds contributed to any of the persons described above; The business rationale for each of the Company’s political contributions; and Identification of the person or persons in the Company who participated in making the decisions to contribute.
This report shall be posted on the company’s website to reduce costs to shareholders.
Statement of Support:
As long-term shareholders of Eli Lilly, we support policies that apply transparency and accountability to corporate political giving. In our view, such disclosure is consistent with public policy in regard to public company disclosure.
There are various disclosure requirements for political contributions but they are difficult for shareholders to access and are not complete. Although the Bi-Partisan Campaign Reform Act enacted in 2002 prohibits corporate contributions to political parties at the federal level, corporate soft money state-level contributions are legal in 49 states and disclosure standards vary widely.
Corporations can also make unlimited contributions to “Section 527” organizations, political committees formed for the purpose of influencing elections but not supporting or opposing specific candidates. These do not have to be reported.
Between January 1, 1991 and December 31, 2002 the Pharmaceutical Research and Manufacturers Association (PhRMA) – of which the company is a dues-paying member – gave $35.5 million in soft money political contributions. (Follow the Dollar Report, July 1, 2003, Common Cause).
Company executives exercise wide discretion over the use of corporate resources for political purposes. They make decisions without a stated business rationale for such donations. In 2001-02, the last fully reported election cycle, Eli Lilly contributed at least $853,024 (The Center for Responsive Politics, Soft Money Donors, (http://www.opensecrets.org/softmoney).
Relying only on the limited data available from Federal Election Commission and the Internal Revenue Service, the Center for Responsive Politics, a leading campaign finance watchdog organization, provides an incomplete picture of the Company's political donations.
Proponents believe our company should be using its resources to win in the marketplace through superior products and services to its customers, not because it has superior access to political leaders. Political power can change, leaving companies relying on this strategy vulnerable.
Finally, the requested report represents a minimal cost to the company, as presumably management already monitors corporate resources used for such purposes. Although lacking a business rationale for such contributions, our peer company Pfizer discloses these contributions on an annual basis.
There is currently no single source of information that provides the information sought by this resolution. That is why we urge your support for this critical governance reform.
Disclose Political Contributions – Southern Company
RESOLVED: The shareholders of Southern Company (“Company”) hereby request that the Company provide a report updated semi-annually disclosing:
Policies and procedures for political contributions (both direct and indirect) made with corporate funds.
Monetary and non-monetary contributions to political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code including the following:
§ An accounting of the Company’s funds contributed to any of the persons described above;
§ The business rationale for each of the Company’s political contributions; and
§ Identification of the person or persons in the Company who participated in making the decisions to contribute.
This report shall be posted on the company’s website to reduce costs to shareholders.
SUPPORTING STATEMENT
As long-term shareholders of Southern Company, we support policies that apply transparency and accountability to corporate political giving. In our view, such disclosure is consistent with public policy in regard to public company disclosure.
Company executives exercise wide discretion over the use of corporate resources for political purposes. They make decisions without a stated business rationale for such donations. According to the Center for Responsive Politics (http://www.opensecrets.org/softmoney/index.asp), in 2001-02, the last fully reported election cycle, Southern Company contributed at least $963,957 in “soft dollar” donations.
Relying only on the limited data available from Federal Election Commission and the Internal Revenue Service, the Center for Responsive Politics, a leading campaign finance watchdog organization, provides an incomplete picture of the Company's political donations. Complete disclosure by the company is necessary for the Company’s Board and its shareholders to be able to fully evaluate the political use of corporate assets.
Although the Bipartisan Campaign Reform Act enacted in 2002 prohibits corporate contributions to political parties at the federal level, it allows companies to contribute to independent political committees, also known as 527s.
Absent a system of accountability, corporate executives will be free to use the Company’s assets for political objectives that are not shared by and may be inimical to the interests of the Company and its shareholders. There is currently no single source of information that provides the information sought by this resolution. That is why we urge your support for this critical governance reform.
