The conventions of the two dominant political parties at the end of the summer have unleashed a torrent of mass media, social media and traditional coverage of the major personalities and agendas at both events. Every moment, every movement and every image is tightly planned and carefully choreographed. Missteps and innovation draw immediate attention and are evaluated by the commentators and explained by the organizers.
The corporate donors who make all this possible receive little attention in the main convention halls and their brands; logos and slogans are nowhere to be seen. It is as if all this is a natural outgrowth of the U.S. quadrennial political process that ends in the choosing of a president; somewhat like the Super Bowl or the World Series events crown the best teams every winter and fall. Thanks to the U.S. Supreme Court ruling in "Citizens United," the amount of money involved has escalated and the ways in which the donors can hide their involvement from public scrutiny has been expanded.
In a recent op-ed in the Wall Street Journal, "Money in Politics: Where is the Outrage," the authors comment as follows; "the prime time show is merely window-dressing; the real action occurs at countless private invitation-only parties where CEOs, lobbyists, trade associations and donors literally cash in their chips." Writing in the New York Times, for example, Nicholas Confessore reports how "The American Petroleum Institute will entertain with a concert and panels, all the while promoting an agenda that includes approval of the Keystone XL pipeline, opposition to new transparency rules for American energy companies operating abroad..."
Unfortunately, that genie is out of the bottle and the amount of money that is spent in every election cycle continues to spiral out of control. In presidential elections we speak of billions of dollars being donated and spent, where we used to talk about six figure amounts. Congressional seats across different jurisdictions easily command multiples of seven figure amounts. In the 2010 midterm election there was more than $450 million spent by candidates.
While their logos are nowhere to be seen, the influence that corporations have in this process continues to receive increased attention and well-deserved analysis. It has also engendered increased scrutiny on the part of both faith-consistent and socially responsible investors. It deserves the scrutiny and support of all share owners who care about the integrity of the political process and worry about the accountability and honesty of their elected officials.
Responsible investors are asking companies if they have a policy on political contributions and if it is made available on their website or provided upon request. Secondly, companies are being asked about direct political contributions and if these are being disclosed in their corporate filings and to shareowners. Requests are also being made for a further breakdown of contributions by political party and to trade associations and other organizations like the Chamber of Commerce, ALEC and Heartland. Finally requests for disclosure of the specific amounts of these different donations are also being made, especially when the revelation of some donations have proved risky for companies, investors and the general public.
For FCI and SRI investors this engagement agenda emerges from a number of priorities and concerns. The most obvious is the undue access and the immeasurable influence that powerful and wealthy corporations will have on elected leaders because of their campaign contributions. These expenditures, the shareowners are expected to assume, are in the company's best interest and will enhance shareowner value.
A second level of concern for the conscientious investor revolves around the role and philosophy of government. This is a twofold consideration that breaks out in a couple of ways. First what is the appropriate role for government in the organization and provision of different services for citizens and how are the revenues for such services raised and distributed ( i.e. the size of government and taxation)?
The other consideration that deserves their attention is the specific role for government in establishing the legal framework, rules and regulations for commercial transactions and financial activities and services. This is often characterized as regulation "heavy or lite!" How are the social, environmental and good governance priorities of investors appropriately calibrated with the values of entrepreneurship, innovation and sustainable growth?
Faith consistent and socially responsible investors remain concerned about promoting the common good, safeguarding the environment and the well-being of future generations. They are also looking for reliable market rate returns on their investment in order to meet the expenses that they need to fulfill the mission of their various institutions and services.
If, in fact, companies share these same goals, it is incumbent on them to be transparent with their investors and the public around their lobbying activities and political contributions. Anything less is, at minimum, disingenuous.
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