Disclosing More About Donations

Reynolds, Noble Energy join the ranks of companies that reveal their contributions to trade associations.

Reynolds American Inc. and Noble Energy Inc. have joined a growing number of companies disclosing their contributions to trade associations and other nonprofit groups that legally can keep their donors from public view.

A study to be released today reports that 84 of the 195 largest corporations in the Standard & Poor’s 500 Index have agreed to reveal their contributions to trade associations, an increase from 70 companies a year earlier. In addition, 51 companies, up from 31, have said they would disclose donations to other nonprofits.

Even as some groups fight efforts to make their donors public, companies are coming forward on their own, according to the report by the Center for Political Accountability and the University of Pennsylvania Wharton School’s Zicklin Center for Business Ethics Research.

“Companies say this is just good governance,” said Bruce Freed, president of the Washington-based accountability center, which encourages companies to disclose their political spending.

A spokeswoman for Winston-Salem, North Carolina-based Reynolds, Jane Seccombe, said the company’s disclosure policy evolved from discussions with a shareholder she declined to identify. The shareholder wanted “greater transparency,” she said.

Noble Energy is committed to doing “business with integrity and transparency and applies this commitment to its stakeholder interactions and public disclosures,” Arnold Johnson, the Houston-based company’s general counsel, said in an e-mailed statement.

The Securities and Exchange Commission is considering whether to move ahead on a proposed rule requiring all publicly traded corporations to reveal their political spending.

Spending by trade and other nonprofit groups on campaigns has increased since the U.S. Supreme Court’s Citizens United decision in January 2010 removed limits on independent corporate and union spending.

Such expenditures grew to $311 million in 2012 -- 85 percent on behalf of Republicans -- from $69 million in 2008, according to the Center for Responsive Politics, a Washington-based research group that tracks campaign expenditures.

Senate Republicans have blocked legislation requiring all groups spending money on campaigns to identify their donors. The Federal Election Commission, which has three Democratic and three Republican members, has deadlocked along party lines on whether to consider requiring such disclosure.


Boycott Threat

The U.S. Chamber of Commerce, the largest U.S. business lobby, also opposes rules that would force it to disclose contributors.

“The idea here is to bring these companies’ political spending -- which is free speech -- out into the open so they can be targeted for harassment and boycotts,” Chamber President Tom Donohue said in a Sept. 10 speech in Stamford, Connecticut.

Donohue has been joined by National Association of Manufacturers President Jay Timmons and Business Roundtable President John Engler in urging companies to resist pressure to disclose their contributions.

“The ultimate plan” by advocates of greater disclosure, the three said in an April letter, is “to intimidate companies into withdrawing from political engagement.”

Because of voluntary corporate disclosures and filings by nonprofits with the Internal Revenue Service, more of the chamber’s donors are being publicly identified. They include Noble Energy, which gave $82,500 last year, and Reynolds American, which contributed $45,000, according to information posted on both companies’ websites.

Donating $3 million to the chamber, Internal Revenue Service filings show, was Arlington, Virginia-based Freedom Partners, a nonprofit linked to billionaire energy executives Charles and David Koch.

The chamber spent $35.7 million on the 2012 elections primarily in support of Republicans, according to the Center for Responsive Politics.

Freedom Partners’ president, Marc Short, has been the Kochs’ Washington liaison, according to the center. Board members include Richard Fink, executive vice president of Wichita, Kansas-based Koch Industries Inc., and Kevin Gentry, a vice president of Koch’s lobbying arm, according to Freedom Partners’ website.

The group also gave $1.2 million to the National Association of Manufacturers and $2.5 million to the National Federation of Independent Business, a trade group representing small businesses.


Ad Spending

“If there is outside support that is aligned with the positions that we already have, those positions that our members have approved, then we will take advantage of that,” said Jean Card, NFIB’s vice president of media and communications.

Freedom Partners contributed $32 million to another Koch- linked group, Americans for Prosperity, which is running ads against President Barack Obama’s health-care law. AFP, which received $50,000 from Reynolds American, spent $36.4 million on behalf of Republicans in 2012, according to the Center for Responsive Politics.

Freed of the Center for Political Accountability said disclosure may keep companies from funding nonprofits whose political activities could anger consumers. Target Corp. faced a boycott by gay-rights groups in 2010 after donating $150,000 to a business group backing a gubernatorial candidate in Minnesota who opposed same-sex marriage.

“Target was viewed by companies as a reason for them to adopt serious disclosure and accountability policies,” Freed said. Companies can say, “we’d like to give but it’s going to be disclosed. That’s a reason that they’re not going to give.”


Bloomberg News


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