The Conference Board has issued an interesting report on “Corporate Political Spending.” The report addresses an increasingly high-profile issue for politically active public companies: demands from shareholders and interest groups that corporations publicly disclose all of their political and lobbying activities. Much disclosure is already required, of course, by federal, state and local campaign finance and lobbying laws. But this hasn’t stopped activists from seeking to pry open the corporate books to ferret out details that are not required by law to be reported.
As we previously reported here in InsidePoliticalLaw, a petition for rulemaking concerning corporate political contribution disclosure is pending at the SEC. Hundreds of thousands of comments have been filed with the SEC concerning the proposed rulemaking. In recent years, numerous shareholder proposals have been filed to compel certain public companies to disclose their political expenditures. This year is no exception. We expect the trend to continue, and we expect to see increasingly aggressive actions by institutional shareholders, both through shareholder proposals and through litigation.
The recent case brought by the New York State Common Retirement Fund (the public employees pension fund for New York State) against Qualcomm, seeking to compel production of Qualcomm’s internal books and records concerning political expenditures, could be a harbinger of things to come. (Full disclosure: Covington represented Qualcomm in that litigation.)
We have been advising a wide range of clients for several years on the rising wave of shareholder political disclosure demands. Given the high level of client interest in these issues, we will be holding a conference call on March 21, 2013, at 12:30pm Eastern, on the topic: “Shareholder Demands for Corporate Political Disclosure.” Invitations will be going out soon. My partner Keir Gumbs (a securities law and corporate governance guru, and a former SEC official) and I will provide a one-hour primer on the strategies being pursued by shareholders and activists against public companies.