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October 02, 2013
New Edition of Corporate Political Spending Index Published
by Robert Kropp
The third annual edition of the CPA-Zicklin Index of Political Accountability and Disclosure
documents improvements in disclosure of political spending by corporation.
For the third year, the Center
for Political Accountability (CPA) and the Zicklin Center for Business Ethics Research at the
Wharton School have updated their 2013 CPA-Zicklin Index of Political Accountability and
Disclosure, a ranking of major US corporations according to their political disclosure and
For the second year in a row, the Index includes the top 200 companies in
the S&P 500 by market capitalization.
Since 2003, when CPA launched its
investor-supported effort to increase disclosure of political spending by corporations, the
landscape associated with the issue has undergone changes. For one thing, in large part due to the
persistence of CPA and its allies, the number of large US companies agreeing to disclose political
spending slowly increased.
"When we began," Bruce Freed, president of CPA, told
SocialFunds.com in 2011, "Few if any companies had disclosure and board oversight policies."
In recent years, shareowner advocates led by Walden Asset Management have pressured corporations to
disclose or end their their political lobbying expenditures, which accounts for almost 90% of
corporate political spending.
And in 2010, the Citizens United decision by the US Supreme
Court had several consequences. It opened the floodgates of corporate spending on elections to the
extent that the the 2012 Presidential election was the most expensive in the nation's history. It
also galvanized sustainable investors and others to press more vigorously for limits on political
spending; a petition submitted to the
Securities and Exchange Commission (SEC) in 2011, the Committee on Disclosure of Corporate
Political Spending—a group of ten corporate and securities law experts, co-chaired by Lucian
Bebchuk of Harvard Law School and Robert Jackson of Columbia Law School—gained hundreds of
thousands of letters of support.
The petition requested that the SEC “develop rules to
require public companies to disclose to shareholders the use of corporate resources for political
But little brings the issue into starker relief than quantitative rankings;
whatever their reasons for doing so, increasing numbers of large companies are improving their
disclosures in meaningful ways. “The third annual CPA-Zicklin Index of Political Accountability and
Disclosure – issued on the 10th anniversary of the Center’s founding – shows widespread, dramatic
change that could not have been imagined in 2003,” the Index states. That “scores of publicly held
companies have adopted new practices...reflects a growing shareholder demand for transparency as
well as company recognition of sound business practices in a political landscape transformed by new
rules and by escalating spending.”
“A strong cross-section of the top tier of American
business has established political disclosure as a corporate mainstream practice, and we’re very
encouraged to see this strong trend gaining momentum,” Freed observed.
In almost every
respect corporate disclosure has improved since the publication of the Index in 2012. Almost 70% of
the 195 companies studied for the Index now disclose their direct political spending. Forty-three
percent report on their payments to trade associations, and another seven percent specifically
request that such entities not use their payments for political purposes. More than a third
disclose payments to so-called social welfare organizations such as Karl Rove’s Crossroads
Grassroots Policy Strategies.
To further demonstrate how disclosure has taken hold among
large corporations: “Of the 195 companies studied by the Index for the second year in a row, 78
percent improved their overall scores for political disclosure and accountability.” Also, “The
number of companies in the top five ranking this year more than doubled, increasing from six last
year to 16 this year.”
“It is heartening to see corporate political disclosure and
accountability emerge as powerful proxies of good governance and, now, as a competitive advantage,”
William Laufer, director of the Zicklin Center, said.
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