WASHINGTON ― As more and more corporations adopt rules governing their political activity, large trade associations engaged in Washington lobbying are pushing back.
Since 2013, the U.S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable have been engaged in an effort to discredit activist investors’ attempts to force shareholder votes on political spending and disclosure policies.
The three trade associations have also targeted the Center for Political Accountability and its annual CPA-Zicklin Index. The center works with investors to encourage corporations to adopt political spending and transparency policies, including the disclosure of campaign contributions and donations to politically active nonprofits and trade associations. Its annual index ranks corporations on their adoption of such policies.
On Oct, 8, the Center for Political Accountability released its annual index and for the first time included all companies listed in the S&P 500.
Predictably, the three corporate trade groups responded with their own pushback in the form of an email from U.S. Chamber of Commerce Institute of Legal Reform President Lisa Rickard to an inside Washington corporate group known as the Carlton Club. The Carlton Club, an 80-member nonprofit organization, is made up of the heads of the Washington offices of major U.S. corporations and corporate trade associations.
The email, which was obtained by The Huffington Post, reads:
Carlton Club Members –
For the last five years the Center for Political Accountability (CPA), in conjunction with the Zicklin Center for Business and Ethics at the University of Pennsylvania’s Wharton School, has released the CPA-Zicklin Index. This year’s index was released a few weeks ago at the beginning of October.
The Index claims to use empirical methods to measure the accountability and transparency of “political spending” by publicly held companies. For the first time ever, the Index ranks all of the S&P 500.
Without the proper background information, companies included in the Index for the first time this year might find their rank or score alarming at first glance. However, what they may not realize is the CPA is not a disinterested, neutral party, but instead is an advocacy group whose purpose is to push for additional disclosure of corporate lobbying and public policy expenditures as part of an orchestrated campaign to ultimately limit the business community’s ability to engage in political and policy debates. The Index is one of their tools designed to help achieve that goal.
In order to provide companies with the necessary information they may need to more fully understand the Index, the group behind its rankings and what the Index might mean for companies’ bottom lines and their shareholders, the U.S. Chamber of Commerce, the Business Roundtable, and the National Association of Manufacturers sent out a letter and three reference handouts to all members of the S&P 500. These materials are attached to this email for your background.
We hope you will also find this information helpful if your company is included in the Index or you received a proxy proposal advocating for political or lobbying spending disclosure in the future. Please feel free to contact me if you have any questions or would like more information about the points raised in any of the documents.
According to the Carlton Club’s 2014 tax return, Rickard is a board member of the Carlton Club alongside other major trade association directors, corporate lobbyists and public policy experts at top Washington law firms. These include former Direct Marketing Association President Linda Woolley, Cisco Senior Vice President of Government and Community Affairs Michael Timmeny, Grant Thornton’s Mary Moore Hamrick, General Mills’ Mary Catherine Toker and HSBC’s Kevin Fromer, among others.
Rickard’s note to the Carlton Club included a letter from the heads of the Chamber of Commerce, National Association of Manufacturers and Business Roundtable; a handout meant to discredit the Center for Political Accountability; recommendations for how to deflect activist investors seeking greater political disclosure from the company and a Wall Street Journal op-ed attacking CPA and the index.
The Chamber’s continued push against corporate transparency comes a year after the trade association retained the services of two former Securities and Exchange Commissioners, Paul Atkins and Kathleen Casey, now at the Washington consulting firm Patomak Partners, to argue against corporate political disclosure policies.