Why are companies afraid to disclose their support for their interests? Because they know that their customers’ interests and their interests are not the same.
Despite mounting calls for greater transparency, only a few of the country’s 75 leading energy, healthcare and financial services corporations fully disclose political spending, according to a review of company records and state and federal campaign finance reports.
While complying with legal requirements to report direct donations to candidates, the vast majority of these companies — many of which are seeking legislative favors from the new Congress — do not reveal information even to their shareholders about support for politically active trade associations like the U.S. Chamber of Commerce.
Groups such as the chamber, some of which spend millions of dollars on elections, are not required to reveal their financial supporters. And companies are not required to report their donations to those groups.
The money fuels a parallel, opaque system of political giving that plays a growing role in national elections and is emerging as a 2012 campaign issue. President Obama is considering an executive order requiring government contractors to disclose political donations, and congressional Democrats have filed a lawsuit against the Federal Election Commission demanding more disclosure.
What information is publicly available suggests that substantial corporate political spending remains in the dark, leading to an incomplete, and at times misleading, picture of companies’ efforts to influence legislation and elections, the Times review indicates.
Only 14 of the country’s 75 leading energy, healthcare and financial services companies reported payments to industry trade associations in 2009. But those 14 alone gave more than $23.5 million for lobbying and political purposes, according to company postings.
The remaining 61 companies in those industries did not disclose any payments. That same year, however, the chamber and seven other leading trade groups representing the three industries took in more than $1.3 billion, more than the state of Vermont collected in taxes. These groups, in turn, spent some $500 million on lobbying and other political activity such as television advertising, tax records show.
Company giving to trade associations for political campaigns can dwarf direct donations to candidates, according to records from corporations that voluntarily report such giving.
Political action committees operated by Prudential Financial, for example, gave $218,230 to candidates and other committees in 2010. By comparison, the company gave the chamber and other trade groups more than $2.2 million for lobbying and other political purposes. In all, the company paid these groups nearly $6.6 million in dues in 2009.
While some companies that don’t disclose may not have contributed to trade groups, others simply defend their right to keep their giving out of the public eye.
“Information about our financial support for certain causes is proprietary,” said Adam Shores, a spokesman for insurance giant Allstate.
That has prompted some investors to push companies to post annual reports where the public can view a comprehensive list of a corporation’s political spending, including what it gives to trade groups. “We understand that company voices need to be heard,” said Julie Gorte, senior vice president at mutual fund Pax World Management. “As shareholders, we think we have a right to know how the money is being spent.”
But industry leaders ExxonMobil, ConocoPhillips, JPMorgan Chase and Citigroup have fought such shareholder initiatives, arguing in corporate filings that they comply with existing laws and that disclosing more is “unnecessary.”
Other companies say they present a complete picture of their political spending, while leaving off select contributions.
Goldman Sachs, for instance, says on its corporate website that it “does not make any political contributions in the United States.” And Morgan Stanley reports that its only corporate political contribution in 2010 was a $500 check to the New York Senate Republican Campaign Committee Housekeeping Conference Account.
Nowhere on their websites do the two financial powerhouses say that they gave a combined $105,264 to a political action committee run by the California Public Securities Assn.
State campaign finance reports, which show the contributions, indicate that the trade group spent $400,000 on two 2010 ballot measure campaigns.