WASHINGTON – Investors pressing for more disclosure of corporate political donations are gaining support in a drive targeting companies such as CVS Caremark Corp. and Coventry Health Care Inc., a shareholder advisory group said.
Support for 28 shareowner proposals submitted to a vote after the Supreme Court gave companies the right to buy political advertisements averaged 30 percent, “an unusually high benchmark,” according to the Wash.-based Sustainable Investments Institute in a report released Thursday.
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“There have been shareholder resolutions on this since 2004, but they’re now getting more and more support,” said Heidi Welsh, executive director of the group, which is financed by university endowments and pension manager TIAA-CREF. Welsh wrote the report, which was funded by the N.Y.-based Investor Responsibility Research Center Institute.
Corporate giving is drawing attention as the U.S. Chamber of Commerce, the nation’s largest business lobbying group, pledges to spend $75 million backing pro-business candidates. President Barack Obama criticized such donations, saying the Chamber is protecting the identity of companies paying for its “attack ads.”
“It could be the oil industry” funding the ads, Obama said at a rally in Philadelphia on Oct. 10. “It could be the insurance industry. It could even be foreign-owned corporations. You don’t know because they don’t have to disclose.”
Chamber of Commerce President Thomas Donohue said the group doesn’t buy ads with money from foreign donors. Of more than $200 million in revenue, a “small fraction” comes from foreign affiliates and “strict financial controls” assure that money doesn’t fund political activities, Donohue said in a letter Oct. 12 to the chamber’s leadership.
Citizens United
The Supreme Court’s Jan. 21 decision in a case known as Citizens United overturned laws that limited the role of corporate money in elections. The court said companies and labor unions can spend money to independently support or oppose candidates for federal office.
The Senate this year failed to pass legislation, backed by Obama, to force disclosure. Individual companies are now facing investor pressure to make payments clear, according to the Sustainable Investments Institute.
The report reviewed policies on political giving by companies in the S&P 500 Index and collected responses from 27 on political-giving plans after the Citizens United decision. Of those, 24 including Campbell Soup Co. and Procter & Gamble Co. said they had no plans to get involved in campaigns, it said.
CVS, Coventry
Welsh said most shareholder resolutions gain little support at annual meetings, while proposals tied to corporate giving are picking up support.
A CVS shareholder proposal in May, requiring the company to report twice a year on its political policies and spending, received backing from 41 percent of holders casting ballots. A similar resolution at Coventry Health Care drew 46 percent at a May 20 meeting. A spokesman for Coventry and a spokeswoman for CVS didn’t return messages seeking comment.
An additional 12 proposals were withdrawn after management reached agreement with activists to disclose more information about their giving, the group said in its report.
The report showed about 60 percent of S&P 500 companies spend money from the corporate treasury on political campaigns and a quarter require their directors to oversee political giving.
