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April 21, 2014

Resolution Calls for Transparency in Lobbying Expenditures by Google
    by Robert Kropp

Filed by Walden Asset Management and other sustainable investment organizations, the resolution documents a 250% increase in lobbying expenditures by Google in the last five years. Part one of a two-part series. -- The annual general meeting of tech giant Google will be held on May 14th, and Timothy Smith, Senior Vice President at Walden Asset Management, alerted me to a shareowner resolution filed by the firm that will be voted on then.

The resolution “asks Google to expand disclosure on policies and procedures governing lobbying activities, as well as expenditures for direct and indirect lobbying through trade associations and tax exempt organizations,” according to a press release. It requests that Google submit a report to shareowners which include the following disclosures:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications;
2. Payments by Google used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient;
3. Google’s membership in and payments to any tax-exempt organization that writes and endorses model legislation; and
4. Description of the decision making process and oversight by management and the Board for making payments.

None of the above requests come as a surprise, especially in this proxy season when resolutions addressing political spending and lobbying expenditures dominate corporate proxy ballots. But what may be surprising to the unsuspecting is the sheer volume of Google's lobbying expenditures, as well as its close relationships with trade organizations seem to run counter to a business model widely praised for its attention to environmental concerns.

The resolution reveals that Google is “one of the top five corporate lobbyists in the past two years with federal lobbying expenditures exceeding $30 million.” Its lobbying expenditures have increased by 250% over the past five years; it has hired more than 100 lobbyists; and it “plans to open a new Capitol Hill office comparable to the size of the White House.”

Of further concern to shareowners is Google's relationship with the US Chamber of Commerce and the especially controversial American Legislative Exchange Council (ALEC). Both organizations are notorious for funding assaults on climate change regulation and legislation, at a time when the clock is ticking down to the last few seconds left for meaningful mitigation efforts. “Google reportedly sits on a task force of the American Legislative Exchange Council (ALEC) which has launched a 'high priority campaign' to repeal renewable energy standards in states,” the resolution states.

“The resolution is not a criticism of Googles’ lobbying activities, but rather a call for more transparency and leadership,” Walden stated. “This shareholder resolution calls on Google, one of the largest corporate lobbyists in the US, to extend its leadership in the public policy arena by enhancing disclosure of lobbying decision-making and activities.”

Google's management has recommended that shareowners vote against the resolution. And because the company has a dual-class stock structure it is next to impossible for independent shareowners to muster a majority of the overall vote.

Walden's press release includes a link to Google's pro xy statement, a perusal of which reveals a number of shareowner resolutions aimed at improving the company's corporate governance practices and transparency.

Next: Google faces a number of governance-related shareowner resolutions.

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