General Motors has become the first large corporation to offer stockholders key information on how it solicits and spends political campaign contributions and selects candidates to be supported by its political action committee.
GM's just-published proxy statement for the annual meeting May 23 sums up the workings of the Civic Involvement Program/General Motors (CIP/GM) and tells stockholders they can get details by requesting a free copy of CIP/GM's annual report.
The inclusion of the CIP/GM section in the proxy statement results from an initiative taken by Georgetown University's Institute for Public Representation, (IPR). It represents the Project on Corporate Responsibility, which owns 12 shares of GM stock. Both are nonprofit organizations.
Building on the GM precedent, the institute is preparing to petition the Securities and Exchange Commission to require all major corporations to make similar disclosures about their political action committees. As of last Dec. 31, there were 949 corporate PACs registered with the Federal Election Commission.
An SEC official told a reporter yesterday that to his knowledge, GM's proxy statement PAC disclosure is "unique in its breadth of information and in its discussion of this area at all." The official, deputy chief counsel William E. Morley of the Division of Corporate Finance, said that "not many companies provide any information" on their PACs in their proxy statements.
But an almost casual approach to the development was taken by GM Treasurer R. T. O'Connell. In a phone interview, he said in New York City that the company evaluates 15 or more stockholder proposals every year and routinely endorses some or tries to work out an accommodation with the sponsors of others.
In this case, O'Connell said, much of the information that IPR sought to have disclosed to stockholders was already public at the FEC.
The proxy statement says that GM established CIP/GM "to provide for the solicitation of political contributions from GM executives, administrators and stockholders on a voluntary basis," that CIP/GM has a candidate selection committee to approve recipients of contributions not earmarked by the donors, and that this unit plus two other persons make up CIP/GM's steering committee. Members of GM's board are barred from the steering committee.
Under an agreement with IPR, the 1980 GM Public Interest Report, a 72-page publication with a circulation of 60,000, includes a detailed account of CIP/GM, which listed disbursements of $193,500 in 1978 and $95,000 in 1979. Both the proxy statement and GM's first-quarter report tell stockholders that they may request a copy either of the report or of CIP/GM's report for 1979.
In the Public Interest Report, GM says that contributors may designate as the recipient a specific candidate or party committee. If they do not, the report says, the seven GM executives on the Candidate Selection Committee will choose the recipients, taking into account factors such as "the party's or candidate's record on business and on automotive industry issues," and "whether a candidate represents a GM plant city -- and how well."
In a shareholder proxy proposal submitted last January, the IPR sought stockholder approval for a requirement that GM make wide-ranging disclosures in its annual report, which goes to 1.2 million individuals and organizations.
A few weeks later, the IPR's William Lenox told a reporter, GM Treasurer O'Connell and Group Vice President-Finance David Collier arranged a meeting, saying from the outset that the company was willing to make substantial disclosures.
Although some last-minute snags developed, a settlement was reached last month under which IPR dropped certain requests, including one for disclosure of GM's costs in administering CIP/GM. An expert on campaign financing asking that his name be withheld, estimated that these expenses would approximate the disbursements, but O'Connell said the costs were "Substantially less.
Last Dec. 13, the FEC dismissed a complaint by the International Association of Machinists and six persons that 10 leading PACs, including GM's, are not truly voluntary, often contributed to the political party opposed to the donors' party, and gave most of their money to congressional candidates in states other than the donors'.