At Alliant’s annual meeting on July 31st 65% of shares were voted in favor of the ICCR-sponsored proposal on increased transparency on company’s state and federal lobbying activities. That’s an exceptionally high vote for a shareholder-sponsored proposal, today investorsin Alliant Techsystems (ATK) an aerospace and defense contractor and gun manufacturer, voted in favor of a shareholder request for greater transparency on the company’s lobbying activities.
The proposal was filed by the Province of St. Joseph of the Capuchin Order who are members of the Interfaith Center on Corporate Responsibility, a coalition of faith-based and socially responsible investors who have been engaging the defense sector on human rights and other issues of corporate responsibility for over 30 years – including the manufacture and selling of land mines. ATK is a major producer of large and small ammunition, missiles, warheads and “weaponized special mission aircraft.” ATK recently acquired the Caliber Company, the parent company of the Savage Sports Corporation for $315 million. Savage is one of the world’s largest and oldest arms manufacturers, specializing in shotguns and bolt-action rifles. According to Sr. Susan Mika of the Socially Responsible Investment Coalition:
ICCR members have been filing resolutions with defense contractors and weapons manufacturers practically since the organization’s inception in the 70s. We’ve seen too many recent episodes of violence involving guns to be complacent both in terms of national policy and corporate responsibility. We remain invested in these companies in the hopes of transforming their practices, including their aggressive lobbying against stricter gun control legislation.
Said Fr. Michael Crosby, lead filer and ICCR board director,
Our province of Capuchin Franciscans has been very concerned for over a decade with some of the businesses of Alliant Tech, particularly land mines, as this is a weapon that continues to kill and maim innocent people around the world. This concern is only exacerbated when the company moves into guns and then lobbies heavily to thwart legislation that would regulate their use.
ATK sits on the board of the National Shooting Sports Foundation. Since 2011, this trade group has spent over $1.6 million in lobbying, reportedly ‘to defeat background checks, magazine limits, and the assault-weapons ban renewal.’ Continued Crosby,
As ATK shareholders we have maintained that we have a right to know how lobbying funds are being deployed to determine whether these activities are in alignment with our company’s stated mission and values. Today, our fellow shareholders made it clear that they are in agreement.
ICCR members encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation, both directly and indirectly, as a question of good corporate governance. According to Senate reports, ATK spent approximately $2.92 million in 2011 and 2012 on direct federal lobbying activities yet ATK does not disclose its trade association memberships, payments or the portions used for lobbying on its website.
We believe such disclosure is in stockholders’ best interests because, absent any transparency, company assets could be used for objectives contrary to ATK’s long-term interests. Today’s investor vote is resounding confirmation that we are not alone in this belief.
A similar proposal at CF Industries Holdings, Inc. presented on May 14, 2013 on behalf of the New York State Common Retirement Fund got an even higher vote, 66%. New York Comptroller Thomas DiNapoli won the widest margin ever in a shareholder vote in favor of a resolution forcing corporate disclosure of political giving.
With these two votes, is the tide shifting? Next year could be huge for proxy proposals requiring political disclosures. Shareholder proposals related to political spending or lobbying have been introduced more often than any other proposal type in 2013, constituting 20 percent of all proposals. Expect even more next year with more wins.
The debate about political spending continues to heat up with House Republicans calling on the SEC to ignore a petition that attempted to put into place the disclosures Justice Kennedy thought already existed when he wrote the 2010 Supreme Court decision in Citizens United v. Federal Election Commission, which rolled back restrictions on political spending and assumed shareowners would be watchdogs with respect to their own companies.
Proponents of disclosure say shareowners need to know precisely how a company is spending money on politics in order to assess if the spending exposes them to reputational, business or legal risks.
About 12 percent of S&P 500 companies now voluntarily disclose at least some of the so-called “dark money” contributions they make to 501(c)(4) “social welfare” nonprofit groups, which are not required to reveal their donors. Such groups frequently lobby the federal government and have together spent tens of millions of dollars advocating for and against political candidates since the Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission.
Another 6.4 percent of S&P 500 companies have voluntarily disclosed that they don’t contribute to 501(c)(4) nonprofits at all, according to the first-of-its-kind study, which the nonpartisan Center for Political Accountability is producing.
An even greater share of corporations — more than one-fourth — report at least some payments they make to nonprofit trade associations. Trade groups sometimes engage in political advocacy or electioneering activities and also aren’t legally compelled to disclose their donors.
The study shows a slow shift toward transparency, said Bruce Freed, the Center for Political Accountability’s president.
Shareholder pressure, changes in corporate governance standards and publicity from the Center for Political Accountability’s more detailed and annual corporate transparency index of S&P 200 companies contribute to this shift, said Freed, whose Washington, D.C.-based organization works to promote “responsible corporate political activity, protect shareholders and strengthen the integrity of the political process.”