Introduction
You book a hotel on Expedia.com.
You buy a Garmin to navigate highways.
Finally, you stream Netflix movies to keep the kids occupied on the trip.
Just know you’re patronizing companies that volunteer virtually nothing about their political practices and spending, according to a new study on corporate political disclosure and accountability by the nonpartisan Center for Political Accountability and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School.
Other familiar names such as travel website TripAdvisor, satellite service provider Dish Network Corp. and energy drink-maker Monster Beverage Corp. rank among 58 companies within the S&P 500 that earned a score of zero on the study’s 70-point scale.
Scores are calculated based on 24 indicators that range from whether a company publicly discloses corporate contributions to political committees and organizations — including politically active nonprofit organizations that don’t themselves disclose their donors — to whether it posts a detailed report of its corporate political spending on its website. The study also awards points to companies that have established clear political spending and disclosure policies.
Other notable companies receiving low political transparency scores include toymaker Mattel Inc., discount stores Dollar General Corp. and Dollar Tree Inc., Michael Kors Holdings Ltd., Tyson Foods Inc.
Also among the basement dwellers: consumer credit reporting agency Equifax, which is facing congressional hearings after a massive breach of its data systems that compromised the security of about 143 million Americans’ personal information.
When asked about Tyson Food’s score of three points out of a possible 70, Caroline Ahn, a Tyson Foods spokeswoman, said the company complies with federal disclosure requirements.
“We report to the U.S. House and Senate any corporate expenditures paid to trade associations that are involved with advocacy efforts,” she said in an emailed statement.
But other companies, such as Microsoft Corp., eBay Inc., HP Inc. and PG&E Corp., fared much better with scores of at least 65 points out of a possible 70.
The number of these “trendsetter” companies, those that scored 63 points or more, increased by nine companies from the 41 companies that had the distinction in the 2016 report.
This year was also the first time in the Center for Public Accountability/Zicklin study’s seven-year history that a company received a perfect score. This distinction goes to Becton, Dickinson & Co., a global medical technology company.
The average score for all 499 companies in the study was about 30 points on its zero-to-70 scale. That’s a slight uptick from 2016.
Several companies significantly improved their scores from 2016 to 2017. Among them are chemical company LyondellBasell Industries NV, Host Hotels & Resorts, CenterPoint Energy Inc. and Ralph Lauren Corp. each boosted their score by dozens of points by voluntarily disclosing more spending or clarifying political spending practices.
Until recently, Host Hotels and Resorts didn’t have a staffer to focus on disclosure and corporate political spending, said Kevin Gallagher, the company’s vice president and assistant general counsel. Now the company does.
“We were just really happy to improve our disclosure, and I think we can do even better next year,” Gallagher said.
Food spice outfit McCormick & Company Inc., pharmacy chain Walgreen Boots Alliance Inc. and Costco Wholesale Corp. are well-known companies that also scored well, according to the study.
Bruce Freed, president of the Center for Political Accountability, said corporate disclosure has held even and he thinks it will continue to grow at a steady pace even in the shadow of a president who hasn’t released his tax returns.
“Political disclosure and contributions are now becoming a standard that companies are expected to follow,” he said. “Those companies that don’t disclose are going to be viewed as outliers.”
This year’s Center for Political Accountability/Zicklin study showed a slight dip — from 305 last year to 295 this year — in the number of companies that disclosed some or all their election-related spending, or banned such spending altogether. Freed said the year-to-year change in which companies are listed within the S&P 500 may have caused this decrease.
But the Center for Political Accountability/Zicklin study has also revealed a growing trend toward more managerial and board oversight of political spending and more disclosure or prohibition of political spending, said Freed, noting the study has measured the full S&P 500 for the past three years.
For instance, the numbers of senior managers overseeing political spending grew from 237 in 2015 to 292 this year.
The number of companies banning contributions to 501(c)(4) “social welfare” nonprofit organizations is now at 177, versus 83 in 2015.
The study also notes that more companies are voluntarily disclosing their election spending without being told to do so.
The Center for Competitive Politics is a longtime critic of the Center for Political Accountability/Zicklin transparency study. While Center for Competitive Politics senior policy analyst Luke Wachob hasn’t yet seen the newest study’s findings, he faulted past studies for “misrepresenting the issue of corporate disclosure and for using a ‘one-size-fits-all’ policy for the thousands of different entities that comprise ‘corporate America.’”
Wachob said his organization hopes the study’s “defects” have been addressed in its latest iteration.
Kelli Mleczko, a spokeswoman for Sempra Energy, said public policy engagement is important for all companies — but so is transparency. Sempra Energy earned a score of 68 points out of 70.
“While the CPA-Zicklin Index can be used as a benchmark for areas to focus on in terms of accountability, our principle motive is that we believe maintaining transparency and accountability is core to being a responsible company,” she said.
This article was co-published by Salon and Philly.com
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