Citizens United and Pay 2 Play

Investors Seek Disclosure of Corporate Lobbying Expenses

Citizens United and Pay 2 PlayResolutions Filed at 53 Companies

Disclosure of corporate lobbying expenses remain top shareholder proposal topics for 2015, as more than 60 investors have filed proposals with more than 50 companies asking for reports that include federal and state lobbying payments, political contributions and/or payments to trade associations used for lobbying and payments to any tax-exempt organization that writes and endorses model legislation.

In 2014, resolutions relating to corporate political and lobbying expenses of a company were among the most common shareholder proposal put forth during the proxy season for the fourth consecutive year, and it is expected that these will be among the most popular shareholder proposal topics for 2015 proxy season. The bulk of political spending resolutions fall under two categories, either requesting disclosure of lobbying expenditures or seeking disclosure of political contributions.

Reflecting investors’ interest in disclosure of corporate lobbying expenses, a rulemaking petition at the Securities and Exchange Commission (SEC) to require disclosure of corporate political spending has received a record level of support for SEC rulemaking, with more than 1,100,000 comment letters submitted – the vast majority in support.

Take Action: Please ask your mutual fund to support these proposals and vote for them yourself if you own any stock directly. See how you can join those calling on the SEC to require such disclosures at the bottom of this post. 

Proponents of corporate lobbying expenses resolutions believe that disclosure allows shareholders to evaluate whether lobbying is consistent with a company’s expressed goals and is being done in the best interests of the company and shareholders. Corporate reputation is an important component of shareholder value, and controversial lobbying activity can pose serious reputational risks. 

One large disclosure gap is undisclosed company payments to trade associations used to lobby. Trade associations do not have to disclose their members or source of funds used for lobbying, and the amounts are substantial. Undisclosed trade association payments used to lobby allow companies to influence policy anonymously. The amounts of corporate contributions that trade associations spend on lobbying are very large. For example, the Chamber of Commerce spent $124 million to lobby in 2014 and has spent over $1 billion on lobbying since 1998. To ensure company payments used by trade associations are being monitored, investors are asking companies to disclose all of their payments to trade associations that are used to lobby.

The proposals seeking disclosure of corporate lobbying expenses also continue to focus on reputational risks from involvement in the American Legislative Exchange Council (ALEC). ALEC is a tax-exempt organization that convenes state lawmakers and corporations to approve model legislation that has included controversial bills on Voter ID, anti-immigration, reversing state regulations on renewable energy and blocking EPA regulation. Reflecting the importance of companies managing  reputational risks of third party memberships, more than 100 companies have announced leaving ALEC, including Ameren, eBay, Emerson Electric, Facebook, Google, Microsoft, Northrop Grumman, Occidental Petroleum and Yahoo. Prominent continuing ALEC members receiving 2015 proposals include: AT&T, Chevron, Comcast, Dominion Resources, ExxonMobil, Honeywell, Time Warner Cable and United Parcel Service.

Opponents of disclosing corporate lobbying expenses, which have included many of the largest trade associations, have claimed that disclosure is a form of silencing speech. [Kenneth Doyle, “Chamber Fights Back Against Pressure to Disclose Corporate Political Spending,” BNA, December 5, 2014.] Yet disclosure does not prohibit corporate lobbying but instead enables shareholders to evaluate whether the lobbying is in the best interests of the company and shareholders. Undisclosed political spending can present reputational risk, and shareholder proponents are seeking lobbying disclosure to ensure that boards of directors are monitoring this risk.

In Citizens United v. FEC the US Supreme Court noted that shareowners could “determine whether their corporation’s political speech advances the corporation’s interest in making profits” and could discipline directors and executives who use corporate resources inconsistently with shareowner interests. However, unless shareowners have information about a company’s political speech and expenditures we will be unable to know whether such speech “advances the corporation’s interest in making profits” and will be unable to discipline directors and executives. See Citizens United: Five Years Later.

This is the fifth year proposals asking for disclosure of corporate political and lobbying expenses were filed by investors. In 2014, 60 proponents filed 49 lobbying disclosure proposals, and the 38 proposals went to vote averaging 26 percent support. In 2013, 70 proponents filed 50 proposals, and the 40 that went to vote averaged 25 percent support. For 2012, 46 proponents filed 38 proposals, and the 20 that went to vote averaged 24 percent. And in 2011, the AFSCME Employees Pension Plan filed six proposals and the five that went to vote averaged 24 percent. The proposals have led many companies to improve their lobbying disclosure, leading to settlements and improved disclosure at more than 35 companies.

Sixty-five investors joined in filing and co-filing disclosure of corporate lobbying expenses resolutions. This initiative is coordinated and supported by AFSCME and Walden Asset Management, a division of Boston Trust & Investment Management Company.

Resolutions Seeking Disclosure of Lobbying Expenses

  • Alexion Pharmaceuticals (ALXN)  
  • Ameren (AEE)
  • American Express (AXP)
  • Apple (AAPL)
  • AT&T (T)
  • Bank of America (BAC)
  • BlackRock (BLK)
  • Boeing (BA)
  • Capital One Financial (COF)
  • Celgene (CELG)
  • CenterPoint Energy (CNP)
  • Charles Schwab Corporation (SCHW)
  • Cheniere Energy (LNG)
  • Chevron (CVX)
  • Citigroup (C)
  • Comcast (CMCSA)
  • ConocoPhillips (COP)
  • CONSOL Energy (CNX)
  • Devon Energy (DVN)
  • Dominion Resources (D)
  • DuPont (DD)
  • Eastman Chemical (EMN)
  • Emerson Electric (EMR)
  • Exelon (EXC)
  • Express Scripts (ESRX)
  • ExxonMobil Corporation (XOM)
  • Facebook (FB)
  • First Energy (FE)
  • GEO Group (GEO)
  • Goldman Sachs (GS)
  • Google (GOOG)
  • Home Depot (HD)
  • Honeywell (HON)
  • IBM (IBM)
  • JPMorgan Chase (JPM)
  • Lockheed Martin (LMT)
  • Marathon Oil Company (MRO)
  • Marathon Petroleum (MPC)
  • MasterCard (MA)
  • Monsanto (MON)
  • Morgan Stanley (MS)
  • Motorola Solutions (MSI)
  • Philip Morris (PM)
  • Pinnacle West Capital (PNW)
  • Raytheon (RTN)
  • Spectra Energy (SE)
  • Time Warner Cable (TWC)
  • Tyson Foods (TSN)
  • United Parcel Service (UPS)
  • Valero Energy (VLO)
  • Wal-Mart (WMT)
  • Walt Disney Company (The)(DIS)
  • Wells Fargo & Company (WFC)

Filers of Corporate Lobbying Expenses Resolutions

Public Pension Funds

  • State of Connecticut Treasurer’s Office
  • New York State Common Retirement Fund
  • City of Philadelphia Public Employees Retirement System

Labor Pension Plans and Organizations

Asset Management Companies

  • Domini Social Investments
  • First Affirmative Financial Network
  • Green Century Funds
  • Nelson Capital
  • Pax World Fund
  • Sonen Capital
  • Sustainability Group, Loring, Wolcott & Coolidge
  • Trillium Asset Management
  • Walden Asset Management
  • Zevin Asset Management


  • Brainerd Foundation
  • Center for Community Change
  • Edward W. Hazen Foundation
  • Haymarket People’s Fund
  • Lemmon Foundation
  • Max and Anna Levinson Foundation
  • Merck Family Fund
  • Needmor Fund
  • New Economy Project
  • Oneida Tribe of Indians Trust Fund for the Elderly
  • Russell Family Foundation
  • Swift Foundation
  • Tides Foundation

Non-Profit Institutional Investors

  • As You Sow
  • Manhattan Country School

Religious Filers

  • Benedictine Sisters Charitable Trust, Boerne, TX
  • Benedictine Sisters of Baltimore – Emmanuel Monastery
  • Benedictine Sisters of Mount St. Scholastica
  • Benedictine Sisters of Virginia
  • Community Church of New York
  • Congregation of Sisters of St. Agnes
  • Congregation of the Sisters of Charity of the Incarnate Word, San Antonio
  • Congregation of the Sisters of St. Joseph of Brighton
  • Convent Academy of the Incarnate Word
  • Everence Financial
  • First Parish in Cambridge – Unitarian Universalist
  • First Unitarian Congregational Society in Brooklyn
  • Friends Fiduciary Corporation
  • Glenmary Home Missioners
  • Maryknoll Fathers and Brothers
  • Mercy Investment Services
  • Missionary Oblates of Mary Immaculate
  • Providence Trust
  • Province of St. Joseph of the Capuchin Order
  • Sisters of Notre Dame
  • Sisters of Notre Dame de Namur-Boston
  • Sisters of St. Francis of Philadelphia
  • Sisters of the Holy Family, CA
  • Trinity Health
  • Unitarian Universalist Congregation at Shelter Rock
  • Unitarian Universalist Association
  • Unitarian Universalist Service Committee


  • Bill Fleming
  • Gwendolen Noyes
  • Ronald Trimmer

Take Action: Ask the SEC to Require Disclosure of Corporate Lobbying Expenses

Please send e-mails in support of the petition to The public is encouraged to submit comments on proposed rules. Here your options.

All submissions should refer to File Number 4-637. This file number should be included on the subject line if e-mail is used and that is the method I recommend. To avoid duplication or work at the SEC, use only one method. The Commission will post all comments on petitions on the Commission’s Internet website. Comments are also available in the Commission’s Public Reference Room, 100 F Street, NE, Washington, DC, 20549, on official business days between the hours of 10:00 am and 3:00 pm.

Your petition can say something as simple as the following:

Ms. Elizabeth M. Murphy, Secretary
Securities and Exchange Commission
100 F Street, Northeast
Washington, D.C. 20549
Re: File Number 4-637.

Dear Ms. Murphy:

I am an individual investor concerned with how the corporations I invest in are spending corporate funds on political activities. I write in support of a petition by the Committee on Disclosure of Corporate Political Spending, File Number 4-637. In Citizens United v. FEC the US Supreme Court noted that shareowners could “determine whether their corporation’s political speech advances the corporation’s interest in making profits” and could discipline directors and executives who use corporate resources inconsistently with shareowner interests.

However, unless shareowners can easily access information about a company’s political speech and expenditures we will be unable to know whether such speech “advances the corporation’s interest in making profits” and will be unable to discipline directors and executives. The rulemaking sought by the petitioners would address that issue by giving shareowners the information we need to hold the managers and directors of our companies accountable.


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