“Those proposing these resolutions have policy views different from companies and want to use the disclosure as a whipping stick to force companies to stop engaging in the political and policy process,” said Andrew Pincus, a lawyer at Mayer Brown who has represented the Chamber and others opposed to the disclosure resolutions. “Government actions affect companies the way they affect all of us. It’s important for companies to participate in the political process. It’s a way of protecting shareholder value.”
At the heart of the ongoing fight over increased disclosure lies the growing world of third-party groups that are not required to disclose their donors. For years, such groups have given cover to liberals and conservatives, allowing them to fight battles over issues such as abortion rights and cutting taxes in virtual anonymity.
Lifting the veil on that secret spending could endanger their business model.
“Some of this is derived toward trying to defang very specific trade association groups,” said Jim Copland, director of the Center for Legal Policy at the Manhattan Institute, which tracks shareholder proposals and the groups behind them. “Academics, unions, nonprofits have tried to gin this up . . . to try to lower the influence of the trade associations themselves.”
Minow, the corporate governance advocate, said she would like nothing more than to defang those powerful organizations.
“It’s my hope to make groups like the Chamber and ALEC — as long as they continue to insist on obscuring what they are doing — so embarrassing to belong to that it’s no longer worthwhile for their members,” she said.
None of the shareholder provisions aimed at increased disclosure have succeeded this year, though some have received votes exceeding 35 percent, a high number compared with most shareholder resolutions. But passing the measures is not necessarily the point, advocates say. The main goal is to pressure companies to increase their disclosures, especially with the lack of action on Capitol Hill and within federal agencies.
“The ball has been tossed into the laps of shareholders and corporations,” said Trevor Potter, a former chairman of the Federal Election Commission who advised Sen. John McCain (R-Ariz.) on campaign finance and other issues during his presidential bid.
Last week, Potter helped lead a conference on disclosure issues that brought together business executives, corporate governance experts and activists for sessions with titles such as: “The battle over corporate political activity: Left wing plot, good governance, or both?”
In attendance was Dan Bross, Microsoft’s senior director of corporate citizenship, who has seen his company’s approach to political disclosure evolve.
In 2000, the software giant made payments to the Michigan Chamber of Commerce to run campaign ads, under the Chamber banner, helping one of Microsoft’s allies on Capitol Hill, then-Sen. Spencer Abraham (R). When it was revealed that Microsoft had paid $250,000 to help Abraham, the company and the candidate encountered stiff criticism.
Microsoft now discloses its political and lobbying expenditures on its Web site, including dues to trade associations and a breakdown of the political spending by those groups. Bross has emerged as a leader in efforts to encourage other firms to adopt more expansive disclosure practices.
“As a company, we believe in openness, transparency and accountability,” Bross said. “We are doing what we believe is right.”