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Tenet Healthcare Corp
State Street Corp
Two years after the Supreme Court ruled that companies could spend unlimited amounts to support candidates, some boards of directors are putting restrictions on their company’s political contributions. A lot of their angst goes back to the summer of 2010, when Target (TGT) came under attack for giving $150,000 to a Minnesota super PAC supporting Tom Emmer, a gubernatorial candidate who vehemently opposed gay marriage. The resulting public outcry overshadowed the retailer’s prior support for such events as Minneapolis’s gay pride parade. Liberal groups called for a nationwide boycott of the chain, and customers posted online videos of themselves returning products to Target stores. Not until Chief Executive Officer Gregg Steinhafel formally apologized to employees did the public-relations debacle end.
No company wants to wind up the next Target. Super PACs and other groups are expected to spend $1 billion on this year’s election, and some boards—under pressure from shareholders—are adopting policies that force executives to reveal which candidates and issues they’re putting money behind. Target’s “an example that I think will be around for a long time,” says Dan Bross, senior director of corporate citizenship at Microsoft (MSFT), which doesn’t give money to super PACs. Halliburton (HAL) directors decided this year to tell investors which trade associations it belongs to and to disclose what portion of its dues goes toward campaigns. Hershey (HSY) is disclosing contributions even to groups that are allowed by law to keep donors secret. Tenet Healthcare (THC), State Street (STT), Chubb (CB), Safeway (SWY), and Kroger (KR) also told stockholders they would adopt or strengthen disclosure policies this year.
“I want to be as transparent as possible,” says Dan Amos, CEO of Aflac, which has just begun disclosing its contributions to outside groups. This year the insurer sent $55,000 to the U.S. Chamber of Commerce, which plans to spend at least $50 million supporting GOP candidates. Aflac also contributed $286,153 to America’s Health Insurance Plans, a group that gave the Chamber $86 million to fight President Obama’s health-care law. Aflac’s disclosures haven’t reflected badly on it so far, says Amos. “We’re willing to face the backlash.”
Earlier this year a group of shareholders called for directors of WellPoint (WLP) to resign, saying the health insurer hid spending that went to fight Obamacare—a violation of its policy to report certain political contributions. Kristin Binns, a company spokeswoman, wouldn’t comment on the dispute.
According to the Sustainable Investment Institute, which tracks corporate governance policies, in 2010 five Standard & Poor’s (MHP) 500 companies pledged to reveal to investors whether they gave money to super PACs and other outside groups. Today, 38 companies have such policies. That means hundreds of corporations can still pump money into this year’s elections in secret. Says Bross: “Few companies want to be seen as ideological.”
The bottom line: Companies can spend unlimited sums to support candidates, but some boards are forcing them to disclose the contributions.