Activists pressure US companies on political money

* Heavy U.S. Chamber of Commerce spending boosted GOP

* Activists target Pepsi, IBM, Pfizer, Accenture

* Harvard professor: Limit intermediary spending

By Ross Kerber

BOSTON, Nov 5 (BestGrowthStock) – Two social activist investment
groups said this week they have begun pressuring major U.S.
companies, including Pfizer Inc (PFE.N: ) and PepsiCo Inc (PEP.N: )
to review contributions to trade groups such as the U.S.
Chamber of Commerce.

The move comes amid growing controversy after a Supreme
Court decision earlier this year made it easier for companies
and unions to spend directly on individual candidates.

The U.S. Chamber — which lobbies on behalf of U.S.
businesses — was among a number of outside groups that spent
millions in the just-concluded midterm election campaign.
Analysts say the Chamber’s spending bolstered the wave of
Republican victories that allowed the party to retake control
of the U.S. House.

On Thursday, asset managers Walden Asset Management in
Boston and Domini Social Investments in New York said they
filed resolutions calling for independent directors to review
political spending at Pfizer and Pepsi, plus International
Business Machines Corp (IBM.N: ) and Accenture Public Ltd Co (ACN.N: ).

If accepted, the resolutions would be voted by shareholders
at annual meetings next spring. If passed, they are not
binding, meaning management can choose to ignore them.

In practice, such resolutions rarely achieve majorities.
But Walden and Domini — with about $3 billion under management
between them — have had some success in bringing debate around
issues such as having shareholders vote on executive pay. Last
month, U.S. regulators proposed the same idea.

A spokesman for Accenture said the company will review the
proposal. He added it does not give money to the Chamber’s
political efforts under a corporate policy barring such direct
spending on political activities.

A Pepsi spokesman said it will review the resolution, but
praised the Chamber as “an effective advocate of business.”

A Pfizer spokesman said it will consider the resolution and
that it “takes seriously all shareholder concerns.”

An IBM spokesman said the company would not comment.


The activists’ proposals ask each of the four companies to
review political spending and contributions, with an eye on
their own corporate rules against political spending.

Shareholders are likely to introduce more such measures as
similar legislation stalls in Washington, said Lucian Bebchuk,
a Harvard University law school professor who studies corporate

In a forthcoming paper, Bebchuk himself and co-writer
Robert Jackson of Columbia University argue that shareholders
should be given the chance to vote directly on political
contributions and that companies ought to be required to
disclose their spending to intermediaries.

Currently, when it comes to such support, “the interests of
(company) directors and executives may significantly diverge
from those of shareholders,” they write.

Money channeled through the U.S. Chamber of Commerce in
particular has become a flash point, as some companies and
investors have objected to the group’s stance on issues such as
pollution controls and health care.

In the just-concluded midterm elections, the U.S. Chamber
spent $32.8 million to influence Congressional races, more than
any other group except for the political parties themselves,
according to filings analyzed by the nonprofit Center for
Responsive Politics. Of that money, the overwhelming majority
helped Republicans, the group estimates.

Chamber of Commerce representatives said it has only tried
to oppose new laws on healthcare and pollution controls
proposed by Democrats in recent years and say by some measures
their spending still trails the support unions provide to

Chamber leaders praised the Republican gains on Tuesday,
but added via e-mail: “We did support quite a few pro-business
Democrats in this election.”

The shareholder resolutions resemble a law proposed in
March by Democratic Massachusetts Congressman Michael Capuano
that has not been voted on by the full House. The Chamber
opposed the law.
(Reporting by Ross Kerber; editing by Andre Grenon)

Activists pressure US companies on political money