The transparency tide sweeping Capitol Hill is reaching corporate suites far outside the Beltway.
A dozen companies this month announced they are the latest to join a growing list of business giants pledging to disclose more about their political spending. The decisions come in response to pressure from shareholder groups, who in the past three years have been building momentum for the new standards.
Among the latest converts: insurance giants Aetna and WellPoint; energy companies FirstEnergy and Xcel Energy; manufacturers Colgate-Palmolive and DuPont; and drug maker Pfizer. They all have agreed to report the portion of their trade association dues that end up being spent on political efforts, in addition to disclosing money they contribute directly to political groups.
Others — CIGNA, General Motors, Chevron, Lockheed Martin and EMC — agreed to disclose direct contributions to political groups but not their trade association money. All 12 companies have agreed to board oversight of their political spending.
“Companies are finding that they really have to deal with this issue,” said Bruce Freed, co-director of the Center for Political Accountability, which is spearheading the drive. “It’s now moving toward becoming a best practice.”
Founded in 2003, Freed’s group relies on an oddball coalition of institutional investors and shareholder groups to help make its case. Five New York City pension funds opened talks with CIGNA and Chevron. Two Sisters of Mercy investment programs took the lead with Aetna and WellPoint. An advisory firm focused on environmentally friendly investments, called Green Century Capital Management, got the two energy companies to come around.
Socially conscious funds and union groups also have been in the mix.
The dozen companies agreeing to the standards join 19 others, including General Electric, Amgen, Coca-Cola, McDonald’s, Morgan Stanley and Verizon, that already have signed on to better disclosure and board oversight of political spending. This year, however, Freed’s group is pushing for more information: Companies never before have offered to report on the political use of their trade association dues.
Many of the companies involved said they still are working out what, exactly, they have agreed to do. General Motors will disclose the money it contributes to groups known as 527s, but not to other targets of corporate soft money, such as 501(c) groups that engage in issue advocacy. Greg Martin, a spokesman, said the company is sorting through how often, and where, it will make that information available.
Pfizer and FirstEnergy will be asking their trade associations to tell them how much of their money is spent on political and lobbying efforts. FirstEnergy wants the data from every trade group it pays $25,000 annually and will publish the results at the end of the year. Pfizer will post the numbers twice a year, from the 20 or so trade groups it pays at least $100,000 annually.
“We’ve always been very transparent in disclosing our political contributions,” said Marc Scarduffa, Pfizer’s senior director of public affairs. He noted the company already posts online not only the activity of its federal political action committee, but also money spent on ballot initiatives, and corporate contributions at the state and local level. “As long as we’re told what the trade associations are spending, it’s easy to do. It’s just an extra step in the process.”
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.