Study Examines Corporate Disclosure of Political Spending

In its January 2010 "Citizens United" decision, the Supreme Court lifted all but a handful of restraints on corporate spending on politics.

How have companies responded? Are they spending on politics? And, if they are, how are they navigating disclosure, board oversight and the associated risks?

A new study from the Center for Political Accountability, in conjunction with the Carol and Lawrence Zicklin Center for Business Ethics Research at the Wharton School of the University of Pennsylvania, gives us some intriguing insights.

I found the results encouraging. The research, which is the first of its kind since Citizens United, revealed that many leading companies are taking steps to increase corporate political transparency and accountability. They are disclosing political spending and working to safeguard shareholders from its potential risk.

In fact, based on seven key indicators, the CPA-Zicklin Index identified the following S&P 100 companies as the top 10 for political transparency and accountability: Colgate-Palmolive Co., Exelon Corp., International Business Machines, Merck & Co. Inc., Johnson & Johnson, Pfizer Inc., United Parcel Service Inc., Dell Inc., Wells Fargo & Co. and EMC Corp.

Here's a look at a few additional findings:


Fifty-seven of the S&P 100 companies, or almost three-fifths of the largest publicly traded companies in the US, disclose on their websites their direct corporate political spending and have adopted board oversight, or they prohibit spending corporate cash on politics. The two companies that prohibit such spending are Colgate-Palmolive and IBM.


About one-third (32 companies, all) place some restrictions on how their money can be used politically including the two companies, Colgate-Palmolive and IBM, that decline to spend corporate funds on political activity.


Forty-three companies disclose some information about their indirect spending through trade associations or other tax-exempt groups, including 501(c)(4)s.


Twenty-four of the S&P 100 companies state on their websites that they will not make independent expenditures, as Citizens United allows.

"Our findings are striking. They offer hope for increasing corporate political transparency and accountability at a time when everyone expects massive hidden spending to influence elections," said CPA president Bruce Freed."When CPA opened its doors eight years ago, few companies, if any, disclosed their political spending. Today, the CPA-Zicklin Index shows that the largest companies have heard the public outcry and are responding. S&P 100 companies are making voluntary disclosure of political spending a mainstream practice. A significant number of companies recognize the risk associated with political spending and a growing number are not taking advantage of Citizens United, at least directly."