THE BLOG

Further Unmasking Corporate Political Spending

12/04/2013 02:44 pm ET | Updated Feb 03, 2014

Every day, more and more of the nation's leading companies are voluntarily adopting or strengthening their policies to provide for detailed disclosure of their political contributions and the extent of their lobbying activities.

Yet they're having to do so against very strong opposition from their own leading trade associations -- the Business Roundtable, the National Association of Manufacturers and the U.S. Chamber of Commerce -- which in late October together falsely wrote to their combined memberships that: "Corporations Do NOT Support Increased Political and Lobbying 'Disclosure'."

Our democracy is strengthened when political spending by any source is transparent by donor and down to the ultimate recipient. And we are long past the day when monies routed through associations, organizations, unions and lobbyists should remain masked.

Corporate political spending in the 2012 elections, as reported by the Center for Responsive Politics, was more than $2 billion, with another $2 billion spent that year on lobbying. Each is a staggering figure, and together they are downright daunting. And of grave concern is the fact that most of the political spending is being routed through trade associations and other so-called "blockers" in efforts to mask the transactional nature of the contributions.

While a growing number of companies are now very responsibly disclosing their political spending, most companies still don't and the three major trade associations are still working overtime to keep the public in the dark. Absent voluntary detailed disclosure becoming pervasive soon, it seems inevitable that some combination of the big fiduciary shareholders, interested regulatory agencies and Congress will begin to demand comprehensive reform.

The transparency associated with political contributions by individuals isn't perfect, but generally it's as good as anywhere else in the world. While we await the time when public disclosure by corporations, labor unions and 501(c)4 and 501(c)6 organizations of both their direct and indirect political spending is also common practice, it's important, given the enormity of corporate political spending and its pernicious effects, that responsible CEOs at least demand that their trade associations get on board with supporting complete transparency.

Trade associations, as a rule, march to the drums of their largest dues payers, and right now too many of the country's largest companies remain opposed to anything more than modest disclosure. Evidence of these associations' obstructionism can be found in their interactions with Congress, their public speeches and articles, and op-eds placed on their behalf in big business-friendly publications.

An upward trend in corporate political responsibility is undeniable, and in being more responsible these particular companies are answering to their shareholders who, in an overwhelming majority, believe that corporate political spending diminishes shareholder value and can put companies in which they're invested at legal risks. These companies are also enhancing their reputations and eliminating the kind of quasi political shakedowns that so diminish our democracy.

According to results of the recent third annual CPA-Zicklin Index, almost 70 percent of America's top companies now disclose at least some information about their political spending, and 57 percent of them are also opening up about their payments to trade associations. And sixteen of these companies are now fully leading the charge for complete political disclosure and accountability, up from just six last year. Included among them, with particular distinction, are AFLAC, CSX, Merck, Microsoft, Qualcomm and United Parcel Service.

This important Index, produced jointly by the Center for Political Accountability and the Zicklin Center for Business Ethics Research of the University of Pennsylvania's Wharton School, also reported that 78 percent of the companies received improved scores for disclosure and board oversight of political spending.

But lest the leading business trade associations continue to ignore the obvious, chief executive officers must speak out and demand that those organizations which purport to represent them recognize that transparency and accountability are actually very good for business.

Sunshine is always better than darkness, and in business accountability is always better than masking political spending and activity.

Leo Hindery, Jr. is the former CEO of AT&T Broadband and its predecessors, Tele-Communications, Inc. (TCI) and Liberty Media, and is currently an investor in media companies. A member of the Council on Foreign Relations, he is the author of "It Takes a CEO: It's Time to Lead with Integrity" (Free Press, 2005).

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