Stay current on changes and developments in corporate law with a wide variety of resources and tools.
Dec. 3 — With companies under pressure to disclose more about their political spending, the U.S. Chamber of Commerce is fighting back with a message promoting “free speech and free enterprise,” Chamber President Thomas J. Donohue said Dec. 3.
For years, the chamber has been among the top outside groups spending money to influence federal campaigns. It reported spending almost $35.5 million on political ads in the 2014 election cycle, with almost all of the money favoring Republican candidates. Though it claims to represent more than 3 million American business members, the chamber doesn't disclose specifically which companies or others fund its campaign spending, and historically has guarded all details of its funding sources.
Donohue and other speakers at the Dec. 3 conference sponsored by the U.S. Chamber Foundation in Washington unanimously voiced a message that efforts to secure greater disclosure for corporate money spent in elections and lobbying are motivated not by a concern for transparency, but by a desire to silence the legitimate expression of business interests in American politics.
“The whole thing comes down to efforts by some to stop the business community” from advocating for its interests in the political process, Donohue said.
He and others pointed to lobbying efforts by unions and liberal groups to persuade the Securities and Exchange Commission to adopt new regulations requiring that stockholders be informed of a publicly traded company's political spending (12 CARE 1111, 9/12/14).
Several speakers also raised concerns about efforts to put public pressure on companies through stockholder proposals to force companies to adopt internal policies requiring greater transparency for political money (12 CARE 217, 2/21/14). The chamber is particularly concerned about the efforts of a nonprofit group called the Center for Political Accountability (CPA), which tracks corporate policies on disclosure and has created a ranking system to show which of the top U.S. corporations are more or less transparent.
The latest survey, known as the CPA-Zicklin index, was released earlier this year, and the center's president, Bruce Freed, said it showed that more and more American companies are voluntarily disclosing their political spending despite efforts by the chamber and others to oppose disclosure. The fourth annual CPA-Zicklin Index of Corporate Political Disclosure and Accountability, released in September, showed that a majority of the top 200 publicly held companies received higher overall disclosure scores in 2014 than 2013.
Responding to the release of the last CPA-Zicklin Index, chamber spokeswoman Blair Latoff Holmes called the survey “preposterous.” She said the index of corporate transparency was “designed by activists to ultimately push businesses out of the political and policy making process.” Holmes added that the index was designed to create a facade of widespread investor and corporate support for “the business community unilaterally leaving the political and policy making playing fields.”
Despite the growing corporate interest in disclosure depicted by CPA, political spending by the chamber and other organizations that keep donors secret has continued to grow, especially in the wake of the Supreme Court's 2010 decision in Citizens United v. FEC. The Citizens United ruling lifted decades-old restrictions on corporate and union campaign spending (8 CARE 116, 2/5/10).
In addition to Donohue, speakers at the chamber's conference included Sen. John Cornyn (R-Texas), former Republican Maine Gov. John R. McKernan Jr., who is president of U.S. Chamber of Commerce Foundation, and R. Bruce Josten, the chamber's executive vice president for government affairs.
The conference also had a panel of legal experts on the First Amendment, including Capital University Professor Bradley Smith, a former Republican commissioner on the Federal Election Commission, and University of California at Los Angeles Professor Eugene Volokh. Another panel focused on securities law issues and included former SEC Commissioner Paul Atkins and James Copeland of the nonprofit Manhattan Institute.
The panelists said that public corporations tend to pursue their political goals through “third parties” in order to avoid public controversies that could tarnish their reputations with customers, who generally are evenly divided among Republicans and Democrats. Public companies are therefore more vulnerable to controversy that can flow from disclosure of their political spending.
Most companies “may want to work through trade associations” to accomplish their political goals, Copeland said, citing the examples of the chamber, the Business Roundtable, and the Pharmaceutical Research and Manufacturers Association (PhRMA), which have been heavily involved in lobbying and campaign efforts.
However, companies can be exposed to public pressure if their involvement with a controversial group is exposed. Several of the conference speakers cited the example of the American Legislative Exchange Council (ALEC), a nonprofit organization promoting conservative and pro-business policies that recently has lost membership support from several high-profile companies, including Microsoft Corp., Google Inc. and Facebook Inc.
To contact the reporter on this story: Kenneth P. Doyle in Washington at email@example.com
To contact the editor responsible for this story: Heather Rothman at firstname.lastname@example.org
Notify me when updates are available (No standing order will be created).
Put me on standing order
Notify me when new releases are available (no standing order will be created)