Comcast shareholders reject lobby disclosure resolution for the fourth straight year

Introduction

Comcast Corp. shareholders have for the fourth time rejected a proposal that would require the cable giant to report how much money it spends lobbying state legislatures and local governments.

The resolution, offered at Comcast’s online annual shareholders meeting Thursday, also would have required the company, a heavy lobbying spender in state capitals, to report its membership in and donations to trade associations and tax-exempt organizations that lobby at the state and local level.

Among such groups: the conservative American Legislative Exchange Council, which writes model legislation for state legislators on a range of policy issues including telecommunications.

“We think it’s important that investors are aware of these types of relationships so that we can assess potential reputational risks,” said Jeffery Perkins, executive director of Friends Fiduciary, a Quaker money-management firm that spearheaded submission of the lobbying disclosure proposal. “It’s mystifying why there’s such resistance to providing greater accountability and disclosure …. Maybe I’d have a better idea if we saw the memberships in trade associations and the amount spent.”

The Comcast disclosure proposal cited the Center for Public Integrity’s analysis of five years of lobbyist registrations from all 50 states, in which Comcast lobbied in 36 states. The Center for Public Integrity found that since 2010 the number of entities with either in-house lobbyists or part-time hired guns working in the states has grown more than 10 percent.

In its filing, the Comcast board recommended shareholders reject the disclosure resolution, citing “competitive concerns,” “unnecessary expense” and the cost of “diverting management attention” away from other matters. Comcast is the nation’s second-largest TV cable provider with nearly 23 million subscribers and the largest Internet provider with almost 24 million customers. The company also owns the national broadcast networks NBC and Telemundo, and the film production studio Universal Pictures.

“We value the input of our shareholders, and we met with Friends Fiduciary and their co-filers to listen to their concerns,” said spokesman John Demming. “The proposal’s been submitted repeatedly and overwhelmingly rejected by shareholders each time.”

Comcast shareholders have voted down the proposal for four consecutive years. Even so, Comcast ranks high in corporate political transparency, according to the most recent an annual ranking of large corporations conducted by the Center for Political Accountability, a nonpartisan transparency advocacy group, and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School.

Trade associations, lobbying groups and corporate leaders argue lobbying disclosure requirements put companies at a competitive disadvantage and violate free speech rights. In a letter to their members last year, and obtained by the Center for Public Integrity, the U.S. Chamber of Commerce, the Business Roundtable and the National Association of Manufacturers said the “activists” behind the disclosures seek to “silence the business community’s voice.”

The Business Roundtable has since softened its stance.

But asking companies to disclose their political spending is not the same thing as asking for silence, said Timothy Smith, a director at Walden Asset Management, a Boston-based investment firm catering to “socially responsive investors” and a supporter of the Comcast lobbying resolution.

“The argument actually boggles my mind,” said Smith, whose firm holds almost 2 million shares of Comcast stock. “We’re trying to encourage transparency, and we’re not opposed to companies being proactive in this space.”

This year, shareholders at 52 companies — including AT&T Inc., IBM Corp. and Facebook Inc. — filed lobbying disclosure resolutions, according to the American Federation of State, County and Municipal Employees, the largest trade union of public employees.

Of those, shareholders have voted on 35. On average, 27.3 percent of shareholders voted for more disclosure, which is up from the 25 percent of shareholders that voted for the disclosure proposals in 2016. Almost 99 percent have failed since 2012, according to the Harvard Law School.

Resolutions calling for more transparency on political giving and lobbying were the second most common proposal among publicly traded companies in 2016, according to the Proxy Monitor, which tracks shareholder proposals. Since 2014, more than half of all shareholder proposals sought more transparency on lobbying, according to a study published this year by the Sustainable Investments Group, which promotes socially responsible investing.

“Companies are revealing more about how much they spend in elections and lobbying but remain reticent about disclosing how much they give to intermediary groups that use corporate money to pursue political objectives — trade associations, non-profit ‘social welfare’ organizations or charities that have clear partisan goals,” the study noted.

Comcast is a member of two influential lobbying groups, ALEC and U.S. Chamber of Commerce, according to the shareholder proposal and Perkins. More than 100 companies, including Alphabet Inc. (parent of Google), T-Mobile US Inc. and Facebook, have rescinded their ALEC membership over the group’s position on policy issues such as voter I.D. and opposition to renewable energy programs because the positions contradict company policy.

Other organizations including Apple Inc. and CVS Health left the U.S. Chamber of Commerce for its opposition to EPA regulation and international lobbying against anti-smoking laws.

Federal spending on lobbying is public information. Comcast spent $14.3 million on lobbying Congress and federal agencies in 2016, the 12th largest among all corporations that year, according to OpenSecrets.org, operated by the Center for Responsive Politics.

Perkins said Comcast should include that information in annual reports.

“I don’t believe we should have to go to a website called OpenSercrets.org to find lobbying spending information when the company could inexpensively and easily provide it to shareholders,” Perkins said.

Only six states collect detailed data on lobbying spending, and 22 require no reporting, the Sustainable Investments Group reported. In those six states, Comcast spent more than $7 million from 2012 through 2015, ranking it fifth behind AT&T, the tobacco holding company Altria Group Inc. (parent company of Philip Morris USA), Chevron Corp. and Verizon Communications Inc.

The defeat of the Comcast lobbying disclosure proposal may have been expected, but supporters don’t view the rejection as a complete loss. Smith of Walden Asset Management said lobbying disclosure resolutions send a message to other shareholders and executives.

“These resolutions don’t get 51 percent, but they’ve opened up a debate that wasn’t occurring before, whether we have a 10 percent vote, a 20 percent vote or a 40 percent vote,” Smith said.