by James Hyatt
The Center for Political Accountability, the Council of Institutional Investors and a number of shareholder advocacy groups have launched a letter-writing campaign urging companies in the Standard & Poor’s 500 Index to disclose all political contributions they make with corporate funds.
Currently, 73 S&P 500 companies, including Hewlett-Packard, Merck, United Technologies, eBay, Aetna and Microsoft, make such disclosures, they said.
The letter campaign was prompted by the U.S. Supreme Court’s Jan. 21 ruling in Citizens United v. Federal Election Commission, which now permits corporations, labor unions and other groups to make independent contributions during political campaigns.
Reaction to the decision has reached multi-decibel levels with supporters praising its free speech position and opponents predicting massive corporate efforts to influence political campaigns.
The letter to S&P Index companies declares that the ruling “is likely to put companies under immense pressure to use shareholder funds to support candidates, groups and causes whose positions and activities could threaten a company’s reputation, bottom line and shareholder value.”
Disclosure will help companies “protect themselves from the pressure to give and from ill-considered political spending,” said Bruce Freed, President of the Center for Political Accountability.
Ann Yerger, executive director of the Council of Institutional Investors, which promotes good corporate governance, said “investors need to know how their money is being spent in the political arena. And boards need to step up to the plate and ensure that political checks the company writes enhance, not erode, shareholder value.”
The Council called on corporate boards to “monitor, assess and approve all company political contributions, and to develop and disclose publicly, on an annual basis, the amounts and recipients of all monetary and non-monetary contributions.”