Political Contributions

Shareholders know little about corporate gifts to political parties and groups. Under current political donation disclosure rules, companies are not required to report political donations. Only political contribution recipients must report them. This makes it difficult for shareholders to learn about or track these expenditures. The problem is exacerbated by the fact that many boards of directors conduct little serious oversight of these expenditures.

Corporate executives have substantial discretion in the political contributions they make with corporate funds. The absence of company disclosure and oversight by boards of directors gives them license to direct those funds as they please.

We believe a significant amount of money has been used to finance agendas that are antithetical to the interests of companies and their shareholders. For example, SBC Communications, Bell South, Union Pacific and Altria Group have contributed to Americans for a Republican Majority, a group which in turn funds groups like the Traditional Values Coalition who are opposed to gay rights. This agenda conflicts with the stated policies of the donor companies, who have committed to prohibiting discrimination in hiring based on sexual orientation and provide benefits to same sex partners. Some even fund special programs for gay and lesbian employees.

Absent a system of accountability, corporate executives will be free to use company assets for political objectives that are not necessarily shared by and may be inimical to the interests of companies and their shareholders.

Some leading companies including companies like Morgan Stanley, Johnson & Johnson and Pfizer have agreed to publish their corporate political contribution policies and contributions.

It is extremely important for a media company like Clear Channel to disclose the recipients of its political contributions.

The company has been criticized by lawmakers, recording artists and the public for its perceived dominance of the radio industry. Critics charge that that as a result radio has become less competitive, more commercialized, has much less local content, and devotes fewer resources to local journalism. Many stations now offer only preprogrammed music and a disembodied recording of an announcer from another part of the country
controlled by computer.

The Dixie Chicks were allegedly barred from some stations because of their political views. The London Times reported that Clear Channel distributed a list of 150 songs that its member stations were instructed to censor
following the terrorist attacks of September 11th. Media reports said Clear Channel stations organized rallies in support of US troops at a time when the public was polarized over the prospect of war with Iraq, and anti-war
protests were widespread. It is important to know whether the company was using its dominant market position to further a political agenda. Disclosure of the recipients of its spending could shed further light on this issue.

The Center for Political Accountability is a non-profit group that seeks to bring transparency to corporate giving and make management accountable for their company's contributions. For the last three years, the center has
offered templates for shareholder proposals asking companies to disclosure their contributions and the policies that justify the giving. For more information on CPA's efforts, click here.