Aflac Inc. and Chubb Corp. are among a growing number ofcompanies revealing their corporate contributions, some of whichmay go to nonprofits and trade associations spending millions ofdollars on U.S. elections without disclosing their donors.

A study out today found 45 of 88 companies providing informationabout corporate donations, up from 36 a year earlier.

The trend toward corporate disclosure runs counter to a growthin campaign spending by nonprofits that don't have to identifytheir donors. Even as Republicans on the U.S. Federal ElectionCommission and in Congress block efforts to force nonprofits toidentify their donors, some corporate contributors are voluntarilydisclosing their support.

“It shows forward movement,” said Bruce Freed, president of theCenter for Political Accountability, which conducted the study withthe University of Pennsylvania Wharton School's Zicklin Center forBusiness Ethics Research. “Companies are showing that they considerthis to be important. They're acting on their own.”

Freed's Washington-based group is among those advocating forgreater disclosure of corporate contributions. By forcing companiesto identify where their money is going, executives have to answerto shareholders and directors about their corporate contributionsto outside groups that may not have the best interests of thecompany at heart.

For example, four of the seven biggest sellers of birth controldrugs and devices, including Merck & Co. Inc. and Pfizer Inc.,gave to a trade association that financed efforts to electRepublican lawmakers seeking to limit access to those products.

And Target Corp. faced a boycott by gay rights groups in 2010after the company donated $150,000 to a business group supportingMinnesota Republican gubernatorial candidate Tom Emmer, who opposedsame-sex marriage.

“Disclosure leads a company to think three or four times,” Freedsaid. “You do have some investors who will raise questions.”

A coalition of organizations has asked the Securities andExchange Commission to require publicly traded companies todisclose their donations to nonprofits.

Squandered Money

“A lot of the research shows that the money tends to besquandered following the political biases of the CEO,” said CraigHolman of Public Citizen, a Washington-based advocacy group thatfavors stronger disclosure rules. “The objective is not to preventpolitical expenditures; it's to make sure those expenditures arereasonable and for the benefit of the company itself.”

Former Federal Election Commission Chairman Bradley Smith calledit “a bad thing” for groups to pressure companies into disclosingtheir donations, especially when shareholders “regularly defeat”such proposals.

“Many corporations are feeling pressure from faux 'shareholderrights' groups to adopt such policies, or to exit the politicalarena entirely,” said Smith, chairman and co-founder of the Centerfor Competitive Politics, an Alexandria, Virginia-based group thatopposes campaign finance regulations.

The growth in spending by nonprofit groups that hide theirdonors is a byproduct of the Supreme Court's 2010 Citizens Uniteddecision, which removed restrictions on corporate and unionspending on behalf of candidates.

Senate Republicans have blocked legislation that would haverequired all groups spending money on campaigns to identify theircontributors, and the FEC has deadlocked along party lines, 3-3, onconsidering rules to require such disclosure.

Such organizations as U.S. Chamber of Commerce; Crossroads GPS,founded with the help of Karl Rove, former chief politicalstrategist for President George W. Bush; and Priorities USA, puttogether by ex-aides to President Barack Obama, have spent $97million on the 2012 elections, surpassing the $79 million theyspent for 2008, according to the Center for Responsive Politics, aresearch group in Washington that tracks campaign spending.

Some companies have disclosed their support of nonprofits,including Chevron Corp. and Prudential Financial Inc., both ofwhich helped fund the U.S. Chamber of Commerce. The oil companies'trade group, the American Petroleum Institute, helped fundAmericans for Prosperity, a nonprofit backed by energy executivesCharles and David Koch that this year has spent $31 million to helpelect Republican candidates.

Corporate Donations

Columbus, Georgia-based Aflac will start revealing corporatedonations to outside groups, said Jon Sullivan, a spokesman. Thecompany's website said Aflac will report contributions of more than$50,000 to trade groups and other nonprofits.

Warren, New Jersey-based Chubb for the first time disclosedcontributions of more than $1 million to trade groups, including$425,000 to the Chamber of Commerce and its legal reforminstitute.

Campaign finance lawyer Jim Bopp Jr., who has sued to overturndisclosure requirements, said he has no problem with companiesacting on their own, without a government mandate.

“It should be up to the companies,” he said. “If they think theyget a competitive advantage by disclosing their contributions, weare fine with that. That's the marketplace.”

The nonprofits spending millions on political campaigns alsohave been targeted by New York State Attorney General EricSchneiderman, who has sought tax returns from those groupsincorporated as social welfare organizations so they can keep theirdonors secret.

“The recent activities of some tax-exempt organizations andbusinesses have been matters of great concern to New York,”Schneiderman wrote in a letter sent yesterday to Senator OrrinHatch of Utah, the top Republican on the Senate Finance Committee,and House Ways and Means Committee Chairman Dave Camp ofMichigan.

The two Republicans, whose party's candidates have benefittedfrom $79 million in nonprofit spending compared with $15 millionfor Democrats, earlier objected to Schneiderman's efforts to obtaintax returns directly from the organizations.

In a letter sent last week, the lawmakers told Schneiderman torequest the information from the Internal Revenue Service, not fromthe groups themselves.

Bloomberg News

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