State Treasurer seeks rule change on corporate political activities

Treasurer Wheeler seeks transparency of corporate political spending Treasurer asks SEC to require reports to provide openness for shareholders such as Oregon
By Oregon State Treasurer

SALEM – State Treasurer Ted Wheeler is seeking increased transparency about corporate political spending, which will make companies more accountable to their shareholders.

The Treasurer sent a letter to the U.S. Securities and Exchange Commission today requesting new rules to require regular reporting by publicly traded corporations about political activity. A copy of that letter is attached. Shareholders such as the Oregon Public Employees Retirement Fund and Oregon Common School Fund have a right to know if their companies are spending heavily on lobbying, candidates and political activism, he said. Corporations have the right to be involved in political activity. The Treasurer is not asking the SEC to limit the ability of companies to engage in political speech, but rather to report the costs of it.

“Political activity is not free, and it makes absolute sense to give shareholders a clearer view,” Wheeler said. “Shareholders of any company have a right to know about the activities of the company they own, particularly when those actions – or even inaction – can impact the bottom line.”

In 2010, Target Stores donated $150,000 to a political group, Minnesota Forward, which supported a gubernatorial candidate who was critical of same-sex marriage. That decision resulted in picketers and a proposed national boycott of Target stores – in effect, a potential hit to profitability.

As of this year, 60 of the 100 firms in the S&P 100 voluntarily disclosed their political spending, up from less than 10 in 2005. But that means a substantial percentage of companies are not providing this information.

Thanks to campaign finance laws, candidates need to disclose who is giving them money. It should not be incumbent on individual shareholders to research across the nation to see which candidates or causes are receiving financial support. Also, some political spending, such as contributions through intermediaries, is often opaque and not always reported publicly. A uniform system of disclosure would resolve this barrier to transparency.

More transparency about corporate political spending won’t just assist institutional shareholders like Oregon. Individuals and families also will have more information when choosing how to invest.

In 2011, Oregon voted on 401 shareholder and company proposals related to political spending. The increase in the volume of political spending-related information indicates that this issue has become a priority for many shareholders, and for many companies.

“This is about openness, transparency and about providing accountability for shareholders,” Treasurer Wheeler wrote. “At the end of the day, that’s good business and it will be good for Oregonians.”

The State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. The office also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.

A copy of the letter is attached. Click here.