Center for Political Accountability
For Immediate Release
February 28, 2008
Directors strongly support corporate political spending disclosure, question whether contributions
help companies, CPA poll finds
Washington, D.C. – By strong majorities, directors expressed support for a set of reforms to bring greater transparency to corporate political spending. Two thirds (66%) of directors said that recent corporate scandals involving political activities have “damaged the public’s confidence and trust in corporate America.” A similar majority (60%) agreed that reforms were necessary to “protect companies from risk,” according to a poll released today.
The poll (access results here) found that 88 percent of directors favor public disclosure of their companies’ political spending. Significantly, 76 percent agreed that “corporations should also be required to disclose payments made to trade associations and other tax exempt organizations which are used for political purposes.” Trade associations and 501(c)(4) groups – also known as non-profit “social welfare” organizations – are playing a larger role in political spending in the 2008 election. They are not required to publicly disclose the source of their money.
Two thirds (66%) of directors have concluded that political advocacy and spending did not result in “instances of favorable legislative, regulatory or tax treatment” of their company and/or industry.
Commissioned by the Center for Political Accountability (CPA), the survey is the first in-depth look at director attitudes on corporate political spending. It was conducted by Mason-Dixon Polling & Research, a leading non-partisan public opinion firm. Based on interviews with 255 directors between February 4 and 15, 2008, the poll has a margin of error of +/- 6 percentage points. It is available at www.politicalaccountability.net. The findings were presented today at a conference on Money, Politics and Corporate Risk co-sponsored by the Wharton School’s Zicklin Center for Business Ethics Research, Baruch College’s Zicklin School of Business and the CPA.
The survey was taken as the U.S. heads in the most expensive election in history. The presidential race alone is expected to cost well over $1 billion, and billions more will be spent on congressional, gubernatorial, state legislative, attorney general and state supreme court contests. Business is a major political funder. The U.S. Chamber of Commerce alone announced plans in January to spend more than $60 million on this year’s election.
“This poll underscores director support of the simple proposition that there should be disclosure and board oversight of company political spending,” said CPA executive director Bruce F. Freed. “What’s important is that director oversight of that activity be knowledgeable, critical and independent. This is essential to protect both their companies and their shareholders.”
According to Larry Harris, principal of Mason-Dixon, “The findings of this survey clearly document that directors see the risk to corporations and shareholders and overwhelmingly support reforms to reduce this risk by bringing greater transparency and board oversight to corporate political activity.”
The survey found a wide gap between directors’ professed and actual knowledge of campaign finance laws and disclosure requirements. While 75 percent said they were familiar with the governing laws, 88 percent did not know that companies are not required to disclose all their political spending. 87 percent were unaware that trade associations are not required to disclose their members and the beneficiaries of their political expenditures, and 77 percent were unaware that c4s are not required to disclose their contributors or the beneficiaries of their spending.
Other key survey findings include:
57 percent did not consider additional reporting requirements and disclosure in corporate political spending to be too burdensome or costly.
86 percent said they were familiar with their company’s political advocacy and activities, including fundraising.
62 percent said directors should oversee company political spending, and 57 percent said the board of directors should approve a company’s political expenditures.
56 percent said that their company provides directors with reports on the company’s political spending.
The results of the survey are in line with a CPA/Mason-Dixon poll of American shareholders which found that an “overwhelming majority” of shareholders were concerned that company political spending “puts corporations at legal risk and endangers” shareholder value. A similar majority wanted companies to adopt political disclosure and accountability. The earlier survey is available at http://www.politicalaccountability.net/files/CPA-Mason-Dixonsurvey.pdf.
Center for Political Accountability
Founded in November 2003, the CPA is a non-partisan, non-profit advocacy organization whose mission is to bring transparency and accountability to corporate political spending. Through the efforts of the CPA and a broad coalition of shareholder advocates, 43 leading US public companies have agreed to disclose and have their boards oversee their political activity