The Hon. President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, D.C. 20500
Dear Mr. President:
We are writing to you as a group of institutional investors deeply concerned about the risks presented by corporate political spending, to support you in signing the proposed executive order that would require full disclosure of campaign spending and contributions by business entities that seek federal government contracts. We strongly support this effort to ensure that the government contracting process is free of “pay to play” relationships.
As fiduciaries, we have been working for more than five years to engage corporations in which we hold stock on their direct and indirect political spending. We have urged hundreds of companies to adopt board oversight and commit to full disclosure of all political contributions made from the corporate treasury, including payments to trade associations and other tax exempt entities that are used for political purposes. Shareholder proposals seeking this level of disclosure and accountability averaged 30% support in the 2010 proxy season, a very strong endorsement from the investor community. In 2011, shareholder resolutions seeking such disclosure and oversight are being voted at over 50 company stockholder meetings. We believe such transparency helps protect investor interests and also is the responsible path to take.
In the wake of the Supreme Court’s Citizens United decision, investors have increasingly engaged companies on their policies and practices regarding independent expenditures. We have found that in light of the significant risks involved, a growing number of companies have stated they are not interested in engaging in such spending, and several, including IBM, Wells Fargo, Colgate-Palmolive, UNUM and Microsoft, have adopted formal policies to prohibit or restrict it.
These efforts seeking disclosure have been successful with many leading companies. Currently, 85 large public companies, including more than half in the S&P 100, have committed to disclosure of their political spending policies, the details of the spending, and oversight. These companies are, presumably, already in compliance with the major parts of the proposed executive order, demonstrating that this is feasible.
We note that the U.S. Chamber of Commerce has stated it will use a range of options to stop this executive order. Ironically, many major companies that are Chamber members or sit on the Chamber Board already implement political spending disclosure and oversight, and a number of these also disclose payments made to trade associations. At least a third of the S&P 100 publicly disclose such payments.
As investors, we work to address the social and environmental implications of our investment decisions, and of corporate behavior. Corporate political activity presents significant risks to shareholder value, in the form of legal, reputational and operational risks. We have also addressed the risk that companies are financing issues or candidates that are at odds with their formal policies and values, such as company policies favoring a strong legislative approach to climate change, or those providing equal opportunities or establishing a commitment to diversity for their workforce.
Corporate political transparency allows investors to put together a more complete picture of the various risks to our investments. As broadly diversified investors, we must also keep an eye on the risks to our economy, our electoral process, and our political system that are presented by undisclosed and unaccountable corporate political spending.
Louis Brandeis said it best: “Sunlight is the best of disinfectants.” Time has proven Brandeis right, again and again.
We strongly support your proposed executive order and urge you to sign it as soon as possible.
Adam M. Kanzer
Managing Director & General Counsel
Domini Social Investments LLC
Senior Vice President
Director of ESG Shareowner Engagement
Walden Asset Management, a division of Boston Trust & Investment Management
On behalf of their organizations and the following institutional investors and investor coalitions collectively managing more than $130 billion:
Boston Common Asset Management
Senior Vice President
Sustainability Research and Policy
Calvert Investment Management, Inc.
Rian Fried, President
Clean Yield Asset Management
Ruth Rosenbaum, PhD
CREA: Center for Reflection, Education and Action
Dr. Dominique Biedermann
George R. Gay, CFP®, AIF®
Chief Executive Officer
First Affirmative Financial Network, LLC
Senior Vice President|
Green Century Capital Management
President and CEO
Forrest Hill, PhD
Senior Portfolio Manager
Harrington Investments, Inc
Interfaith Center on Corporate Responsibility
Investor Environmental Health Network
Sean Morgan, President
Christine Jantz, CIO & Portfolio Manager
Jantz Morgan LLC
Marie J. Gaillac
Corporate Responsibility Corporation
Joyce K. Moore, CHFC, LUTCF
Joyce Moore Financial Services
Jeffrey Scales, CFP®, AIF®
JSA FINANCIAL GROUP
Peter W. Krull
Krull & Co.
Susan Smith Makos
Director of Social Responsibility
Mercy Investment Services, Inc.
Barbara Jennings, CSJ
Midwest Coalition for Responsible Investment\
ESG Analyst/Director of Shareholder Advocacy
Miller/Howard Investments, Inc.
Lance Lindblom, President and CEO
Nathan Cummings Foundation
Michael Kramer, AIF®
Managing Partner & Director of Social Research
Natural Investments LLC
Julie N.W. Goodridge, CEO
NorthStar Asset Management, Inc.
Julie Fox Gorte, Ph.D
Senior Vice President for Sustainable Investing
PaxWorld Management LLC
Sr. Pamela Buganski, SND
Sisters of Notre Dame of Toledo, OH
Roberta Mulcahy, ssj
Socially Responsible Investment Coordinator
Sisters of St. Joseph of Springfield MA
Social Equity Group
Lars M. Lewander
Spring Water Asset Management, LLC
Thomas E. Ellington, II
The Sustainability Group at Loring, Wolcott & Coolidge Trust LLC
Director, ESG Research & Shareholder Advocacy
Trillium Asset Management
Senior Associate, Wealth Manager
Veris Wealth Partners
W.G. Voorhes Trust
Zevin Asset Management