Secret politics pervade popular companies

Introduction

Watch your Netflix show, wear your Ralph Lauren shirt, brew your Keurig coffee and deposit your paycheck at M&T Bank.

Just know that you’re patronizing some of the nation’s least politically transparent companies, according to a new study to be formally released this morning by the nonpartisan Center for Political Accountability and the Zicklin Center for Business Ethics Research at the University of Pennsylvania’s Wharton School.

Twenty of the nearly 300 companies studied didn’t score a single point on the survey’s 70-point scale measuring political disclosure and accountability policies, including Netflix Inc., which produces political thriller “House of Cards,” and K-Cup maker Keurig Green Mountain Coffee, which says it uses the “power of business to make the world a better place.”

Other basement dwellers include Whole Foods Market Inc., Southwest Airlines Co., Wal-Mart Stores Inc., DirecTV and Berkshire Hathaway, billionaire Warren Buffett’s holding company.

But overall, the nation’s largest publicly traded companies are growing more politically transparent, the study concludes.

“Although surging secret spending has fueled public suspicion and even allegations of political scandal, many of the nation’s leading public companies have announced opposition to the practice,” the survey concludes. “By standing up for sunlight and adopting public disclosure policies, they are laying the foundation for a new route to political disclosure.”

Railroad giant CSX Corp. and Noble Energy Inc. — each with 68 points — led about three-dozen companies that scored at least 60 points out of a possible 70. Other top scorers included energy company Exelon Corp., tech giant Microsoft Corp. and tobacco company Altria Group Inc.

Nanomanufacturing company Applied Materials Inc., investment management firm BlackRock Inc. and oil and gas services company Schlumberger Ltd. improved their scores the most from 2013 to 2014, the survey indicates.

This latest verson of the annual study uses 24 measurements to rate a company’s political transparency practices and accountability policies.

The measurements judge whether — and to what degree — companies voluntarily disclose donations to politically active trade groups and “social welfare” nonprofits, adopt policies that govern political expenditures from its corporate treasury and reveal money spent to influence state-level ballot initiatives.

All companies that lobby or operate political action committees must regularly file reports with government regulators. Companies must also report direct donations to state-level candidates, as such contributions are permissible in some states.

But companies have significant leeway in setting decision-making policies for political expenditures and determining whether to voluntarily disclose information beyond what is required by law.

Corporations’ involvement in political elections have received significant attention since 2010, when the Supreme Court’s Citizens United v. Federal Election Commission decision granted them powerful spending freedoms.

Corporations may now, for example, directly advocate for a candidate’s election or defeat or contribute to super PACs that do. They may also anonymously donate money to nonprofit social welfare groups and trade associations, which in turn are free to directly advocate for a candidate’s election or defeat.

In January, the Center for Public Integrity reported that top corporations had in one year funneled at least $173 million to politically active nonprofit groups.

So far during the 2014 election cycle, 11 such nonprofits have each spent at least $1 million overtly advocating for or against federal-level candidates, according to the Center for Responsive Politics.

Topping the list is the U.S. Chamber of Commerce, one of the nation’s most notable political forces that, through Tuesday, had spent more than $23 million this cycle supporting primarily Republican congressional candidates.

The Chamber has roundly criticized the Center for Political Accountability/Zicklin Center study as anti-business with a methodology that changes from year to year.

The study is “not a legitimate survey, but an activists’ tool to silence business free speech,” Chamber spokeswoman Blair Latoff Holmes said.

Bruce Freed, president of the Center for Political Accountability, dismissed the criticism.

“Some of the trade associations have an investment in secrecy,” he said. “Most companies view the index as a serious benchmarking, and they treat is seriously.”

The Chamber has also criticized corporate political disclosures in general, declaring last year in a joint letter to businesspeople that “corporations do NOT support increased political and lobbying ‘disclosure.'”

But while the Chamber “does not encourage corporations not to disclose,” companies are “free to choose whatever they would like to do in this space,” Holmes said.