Money and Democracy

Published — October 8, 2015

Corporations improve reporting of political activity — with exceptions

Group ranks top 500 companies on transparency of government influence work


Each episode of the political drama “House of Cards” drips with secretive shenanigans and shady government dealings.

It’s apropos, then, that Netflix, the hit show’s distributor, is itself a black box, according to a new study on corporate political transparency by the nonpartisan Center for Political Accountability and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School.

Netflix joins other household names including clothier Ralph Lauren Corp., financial firm Charles Schwab Corp., Monster Beverage Corp., Urban Outfitters Inc. and Warren Buffett holding company Berkshire Hathaway Inc. in scoring a goose egg on the annual study’s 70-point scale measuring companies’ political disclosure practices and published accountability policies.

The study, which for the first time ranked all companies listed on the S&P 500 stock index, also gives low marks to the likes of retailer Nordstrom Inc., travel booker Expedia Inc., Southwest Airlines Co., Whole Foods Market Inc. and toy maker Mattel Inc., creator of “Barbie.”

But on balance, most of the nation’s largest corporations are showing “sustained, concrete progress” toward volunteering more information about how they interact with governments, politicians and campaigns, the study asserts.

Tech giant Microsoft Corp., power generator Exelon Corp., computer chip maker Intel Corp. and wireless technology outfit Qualcomm all ranked within the disclosure index’s top 20 companies.

Shipper United Parcel Service Inc., confectioner The Hershey Co., bank JPMorgan Chase & Co., tobacco conglomerate Altria Group Inc. and eBay Inc. also ranked highly.

In between the extremes? The Walt Disney Co. (44 points), Facebook Inc. (37), Exxon Mobil Corp. (35), Inc. (25) and Google (23), posted mediocre scores. Among media giants, News Corp. (34) and CBS Corp. (8), underwhelmed.

The Center for Political Accountability/Zicklin index’s 24 categories award points to companies that, for example, voluntarily disclose contributions to certain nonprofit groups, publish policies that govern political expenditures from its corporate treasury and reveal money spent to influence state-level ballot initiatives.

Such disclosures generally exceed what’s required of corporations by law, such as regularly filing disclosure reports about a political action committee or congressional lobbying activity.

But federal law does not compel companies to publicly reveal whether they’re pumping cash into a “social welfare” nonprofit organization that, in turn, advocates for the election of, say, Jeb Bush or Hillary Clinton as the nation’s next president.

Nor does it mandate companies publicize whether they give money to politically active trade associations such as the U.S. Chamber of Commerce, which routinely endorses and promotes a slate of congressional candidates.

Officials at several companies that do reveal much more about their politicking than is legally required generally say it’s good business to do so.

CSX’s score of 68 out of 70 — tied for 1st place — reflects the train and transportation company’s “commitment to transparent reporting, corporate social responsibility and accountability to its shareholders,” spokeswoman Melanie Cost said.

A Center for Public Integrity investigation last year showed that CSX is among dozens of the nation’s large corporations that voluntarily discloses payments made to the U.S. Chamber of Commerce and other trade or political groups.

Becton, Dickinson and Co., a medical supplies firm, and Noble Energy Inc., also earned 68 points.

Calling the Center for Political Accountability/Zicklin transparency index “highly credible,” Monsanto spokeswoman Charla Lord expressed pride in the agribusiness company’s ranking increasing from within the top fifth of all companies in 2014 to within top 10 companies overall — it received 66 points.

Lee Anderson, spokesman for food company General Mills, which scored a 65, made no apologies for his company involving itself in public policy debates.

“But at the same time, we strive to be transparent. It’s the right thing to do,” Anderson said.

An official at coffee company Keurig Green Mountain Inc., which scored 8 out of 70 possible points, said the company “will continue to consider” how it discloses its political activity.

“Although we note there is no current legal obligation to make any such disclosure, we consistently review our disclosures and policies,” spokeswoman Suzanne DuLong said.

Representatives for Netflix, along with those at several other companies that posted low scores, did not return requests for comment.

The Center for Political Accountability/Zicklin index has itself a prominent detractor in the U.S. Chamber of Commerce, the nation’s largest trade group.

U.S. Chamber of Commerce officials, who have long criticized the index as unfair to business, argue the push for corporate disclosure isn’t coming from typical corporate investors in the name of good corporate governance.

“Rather, disclosure is a tool employed by activist investors — in coordination with CPA and other ideologically aligned parties — to generate information about a company’s lobbying and political activities that can then be used by those same activist investors to harass and pressure the company into disengaging from political debates,” U.S. Chamber of Commerce spokeswoman Blair Latoff Holmes said. “We don’t think this is good for businesses or, ultimately, the millions of investors who do not share the activists’ extreme and narrowly focused political agenda.”

Nonsense, said Bruce Freed, president of the Center for Political Accountability.

“There is strong momentum for corporate disclosure because more and more corporations see it as good policy,” Freed said. “Companies ask us all the time, ‘How can we improve our score?’ Together, they keep getting more transparent every year we do this.”

This story was co-published with Al Jazeera America.

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