Corporate Disclosure on State Lobbying ‘Non-Existent': Study

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By Andrea Vittorio

Disclosure on how companies influence state policies on issues ranging from health care to telecommunications is “virtually non-existent,” according to a study released March 1.

That leaves investors and others in the dark on potential risks posed by corporate involvement in an ever more “rancorous” political discourse, the study by the Sustainable Investments Institute (Si2) said.

Wal-Mart Stores Inc. is one of only three companies in the S&P 500 that provide details on which states they lobby in and how much they spend. The retailer became the first big company in the U.S. to do so after shareholder advocacy on the issue.

“We’ve been working on the lobbying issue for years,” said Sonia Kowal, president at Zevin Asset Management LLC, which got Wal-Mart to agree to disclose the data in 2015 after submitting a shareholder proposal on the topic. “I think in the current administration, it’s even more interesting to know what’s being lobbied and how much companies are spending.”

Lincoln National Corp. and Staples Inc. also fully disclose their state-level lobbying expenditures. Five percent of S&P 500 companies reveal the states where they lobby, but not how much they spend, while 2 percent report aggregate lobbying costs, the study found.

Big Spenders

Companies are required to report how much they spend on federal lobbying. State lobbying spend, which the research shows is concentrated among a small number of very large firms, tends to fly under the radar. Twenty-two states don’t have any disclosure requirements and, even among those that do, the study says the disclosures aren’t always comprehensive or useful.

“We just don’t know what they spend,” Si2’s executive director Heidi Welsh told Bloomberg BNA. “And they spend a lot.”

State implementation of former President Barack Obama’s signature health-care law helped make health-care firms the top lobbying spenders by sector, with $41 million spent in six states studied between 2012 and 2015. Now that the law’s been flagged for repeal by the new administration, Welsh expects more, not less, lobbying on it.

Some of the study’s biggest state lobbying spenders by company were AT&T and Verizon, who are facing an evolving regulatory landscape as communications networks shift from wireline to broadband.

Investor Interest

Institutional investors and others have called for greater transparency from companies. Since 2014, more than half of shareholder proposals focusing on corporate political activity have asked about lobbying.

“Companies certainly have a right to opinions,” said Jon Lukomnik, executive director of the Investor Responsibility Research Center Institute, which funded the study.

“What we’re suggesting is that more disclosure and more consistent disclosure would enable shareowners to understand whether the companies actually are being considered in their statements and actions,” he told Bloomberg BNA.

Ninety percent of S&P 500 companies have policies on campaign contributions and half of the index companies specifically require board oversight. Only a quarter have board-level policies on lobbying, the research showed.

To contact the reporter on this story: Andrea Vittorio in Washington at

To contact the editor responsible for this story: Yin Wilczek at

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