MGM dark money is the subject of my first political disclosure proposal submitted for 2020. Dark money corrupts elections throughout the country. In the Supreme Court’s decision Citizens United, Justice Kennedy wrote, “Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.” Kennedy apparently assumed political contributions by corporations were already being posted on the Internet. Some were, but mostly on a voluntary basis. See Letter by SEC Commissioner Robert J. Jackson, Jr. to Congresswoman Maloney for background.
SEC Proposed Rules Will Delay Disclosure of Corporate Dark Money
Without legislation or new regulations, the only way to require corporations to disclose political contributions is for shareholders at each corporations to request their company to do so. More than one million Americans asked the SEC to require such disclosures. Not only has the SEC refused to promulgate such a rule, the SEC is now trying to make it more difficult to make such requests through shareholder proposals.
Read, A Trump Administration Plan that Could Boost Corporate ‘Dark Money’ in Elections. Under the proposed rule, I would have to wait until 2022 to file my MGM dark money proposal. Interestingly, the SEC’s proposed rules to make such shareholder proposals more difficult are based, at least in part, on “Fishy Letters” in support of the change ginned up by the Main Street Investors Coalition. That Coalition is an astroturf “grassroots” organization created by the National Association of Manufacturers to oppose what it calls the “politicization” of the investment process. Like it or not, investments are already politicized. MGM dark money should be disclosed, as should dark money contributions from all corporations.
MGM Dark Money Shareholder Proposal
Resolved, shareholders of MGM Resorts International (“MGM” or “Company”) hereby request the Company provide a report, updated semiannually, disclosing the Company’s:
- Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.
- Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
- The identity of the recipient as well as the amount paid to each; and
- The title(s) of the person(s) in the Company responsible for decision-making.
The initial report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
As long-term shareholders of MGM, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.
Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
Publicly available records show MGM has contributed at least $53,000,000 in corporate funds since the 2010 election cycle (CQMoneyLine: http://moneyline.cq.com; National Institute on Money in State Politics: http://www.followthemoney.org).
However, relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including McDonald’s Corp., Darden Restaurants Inc., and Yum Brands Inc., which present this information on their websites.
Proposals on this topic at Cognizant Technology Solutions, and Macy’s passed last year, despite board opposition. MGM’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.
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Vote for Political Disclosures
I will be filing similar proposals at several other companies, as will other shareholders. Please vote FOR all such proposals, when given the opportunity,