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Political spending and corporate money in politics is a highly contentious issue, made more prominent in light of the 2010 Citizens United Supreme Court case that affirmed companies’ rights to make unlimited political expenditures to independent groups. In the 2012 election year, we expect even more media and public attention to corporate spending to influence elections. Experts predict that an unprecedented amount of money will be spent in the 2012 election season.

Recent polls highlight the public’s disapproval. In a June 2010 Harris poll, 85% of voters said that corporations “have too much influence over the political system today….” In February 2010, an ABC News/Washington Post poll found that 80% opposed Citizens United, noting, “the bipartisan nature of these views is striking in these largely partisan times.”

Corporate political contributions can backfire on a corporation’s reputation and bottom line. In 2010, Target and Valero received unwanted attention, consumer boycotts, and protests for their support of controversial candidates and ballot measures. In a Harris Poll released in October 2010, a sizable portion (46)% of respondents indicated that if there were option, they would shop elsewhere if they learned that a business they patronized had contributed to a candidate or a cause that they oppose.

According to the Institute for Money in State Politics, Bank of America’s political spending on the state and federal levels totaled over $2.1 million in 2007-2008. However, this figure does not include payments to trade associations or other tax-exempt organizations that may channel corporate money to political ends.

Many trade associations that receive corporate contributions spend vast sums in electoral politics; these payments are not required to be disclosed. For example, the U.S. Chamber of Commerce pledged to spend between $50 and $75 million in the 2010 election season, and announced that it would work to unseat any member of Congress who voted for healthcare reform.  According to Public Citizen, only 32% of groups broadcasting electioneering communications in the 2010 primary season revealed the identities of donors in their Federal Election Commission filings, down from nearly 100 percent in the 2004 and 2006 cycles.

Increasingly, companies such as IBM, Colgate Palmolive, Wells Fargo and others are adopting policies prohibiting spending of political funds directly or indirectly to influence elections.

Given the risks and potential negative impact on shareholder value, the proponents believe Bank of America should adopt a policy to refrain from using treasury funds in the political process.

RESOLVED:

The shareholders request that the board of directors adopt a policy prohibiting the use of corporate funds for any political election or campaign.

SUPPORTING STATEMENT:

We believe this policy should include any direct or indirect contribution that is intended to influence the outcome of an election or referendum. It should also prohibit the use of trade associations or non-profit corporations from channeling our company’s contributions or membership dues to influence the outcome of any election or referendum.

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 1.    Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.

 2.    Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

 a.     An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and

 b.    The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.

      The report shall be presented to the board of directors or relevant oversight committee and posted on the company’s website.

Stockholder Supporting Statement

            As long-term shareholders of Chubb Corp., we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

            Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

            Chubb Corp. contributed at least $415,000 in corporate funds since the 2002 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.) 

            However, relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading companies, including Merck, MetLife and Microsoft that support political disclosure and accountability and present this information on their websites.

            The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.

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 1.    Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.

 2.    Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

 a.     An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and

 b.    The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.

The report shall be presented to the board of directors or relevant board oversight committee and posted on the Company’s website.

Stockholder Supporting Statement

            As long-term shareholders of Halliburton, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

            Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

            Relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading companies, including Prudential, US Bancorp and Wells Fargo that support political disclosure and accountability and present this information on their websites.

            The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets.

            In 2011, this proposal received support from more than 46% of shares voted. We urge you to vote  For this critical governance reform.

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 1.    Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.

 2.    Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

 a.     An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and

 b.    The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.

The report shall be presented to the board of directors or relevant board oversight committee and posted on the Company’s website.

Stockholder Supporting Statement

            As long-term shareholders of CenturyLink, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

            Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

            CenturyLink contributed at least $1.3 million in corporate funds since the 2006 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.) 

            However, relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading companies, including Exelon, Merck and Microsoft that support political disclosure and accountability and present this information on their websites.

            The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.

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 1.    Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.

 2.    Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

 a.     An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and

 b.    The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the Company’s website.

Stockholder Supporting Statement

As long-term shareholders of Ford Motor, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.  

Ford Motor contributed at least $1.9 million in corporate funds since the 2002 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.) 

However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations for political purposes. This would bring our Company in line with a growing number of leading companies, including Merck, Microsoft and Prudential that have adopted disclosure and accountability of their political spending.

The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.

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1. Company policy and procedures governing the lobbying of legislators and regulators, including that done on the Company’s behalf by trade organizations. The disclosure should include both direct and indirect lobbying and grassroots lobbying communications.

2. A listing of payments (both direct and indirect, including payments to trade organizations) used for direct lobbying as well as grassroots lobbying communications, including the amount of the payment and the recipient.

3. Membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of the decision making process and oversight by the management and the Board for (a) direct and indirect lobbying contribution or expenditure; and (b) payment for grassroots lobbying expenditure.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that: (a) refers to specific legislation, (b) reflects a view on the legislation and (c) encourages the recipient of the communication to take action with respect to the legislation. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant oversight committee of the Board and posted on the Company’s website.

Supporting Statement

Under the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission, corporations are considered persons having the right to express opinions on public policy issues. However, corporations can exert significantly greater influence than single individuals or groups and may promote interests unknown and contrary to the interests of their own shareholders.

For example, many companies in the health care industry have told their shareholders they are in basic support of the federal health reform law known as the Affordable Care Act, albeit with a desire for necessary changes. However, many of these corporations are members of groups such as the U.S. Chamber of Commerce, the American Legislative Exchange Council (“ALEC”) and other organizations which are actively working to eliminate the Affordable Care Act.

It is important that our Company’s lobbying positions, as well as processes to influence public policy, are transparent. Public opinion is skeptical of corporate influence on Congress and public policy. Questionable lobbying activity may pose risks to our Company’s reputation when controversial positions are embraced. Hence, we believe full disclosure of UNH’s policies, procedures and oversight mechanisms is warranted.

UNH has spent nearly $23 million from 2008 through Q1 2011 on direct federal lobbying activities, according to public records. These figures may not include its grassroots lobbying to directly influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures to influence legislation or regulation and UNH does not disclose contributions to tax-exempt organizations that write and endorse model legislation, such as a $50,000 contribution to ALEC’s 2011 annual meeting (http://thinkprogress.org/politics/2011/08/05/288823/alec-exposed-corporations-funding/).

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         1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.

         2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:

              a. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political    contributions or expenditures as described above; and

              b. The title(s) of the person(s) in the Company responsible for the decision(s) to make the political contributions or expenditures.

         The report shall be presented to the board of directors or relevant oversight committee and posted on the company’s website.

Stockholder Supporting Statement

         As long-term shareholders of State Street, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

         Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

         Relying on publicly available data does not provide a complete picture of the Company’s political spending. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In some cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations used for political purposes. This would bring our Company in line with a growing number of leading companies, including Prudential, US Bancorp and Wells Fargo that support political disclosure and accountability and present this information on their websites.

         The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.

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Political spending and corporate money in politics is a highly contentious issue, made more prominent in light of the 2010 Citizens United Supreme Court case that affirmed companies’ rights to make unlimited political expenditures to independent groups. In the 2012 election year, we expect even more media and public attention to corporate spending to influence elections. Experts predict that an unprecedented amount of money will be spent in the 2012 election season.

Recent polls highlight the public’s disapproval. In a June 2010 Harris poll, 85% of voters said that corporations “have too much influence over the political system today….” In February 2010, an ABC News/Washington Post poll found that 80% opposed Citizens United, noting, “the bipartisan nature of these views is striking in these largely partisan times.”

Corporate political contributions can backfire on a corporation’s reputation and bottom line  In a Harris Poll released in October 2010, a sizable portion (46)% of respondents indicated that if there were option, they would shop elsewhere if they learned that a business they patronized had contributed to a candidate or a cause that they oppose. In 2010, Target Corporation was subjected to consumer boycotts, and protests for their support of a controversial candidate whom 3M also supported.

According to the Center for Political Accountability, 3M has spent approximately $1.5 million in corporate funds to political activities since 2002. However, this figure does not include payments to trade associations or other tax-exempt organizations that may channel corporate money to political ends.

Many trade associations that receive corporate contributions spend vast sums in electoral politics; these payments are not required to be disclosed. For example, the U.S. Chamber of Commerce pledged to spend between $50 and $75 million in the 2010 election season, and announced that it would work to unseat any member of Congress who voted for healthcare reform.  According to Public Citizen, only 32% of groups broadcasting electioneering communications in the 2010 primary season revealed the identities of donors in their Federal Election Commission filings, down from nearly 100 percent in the 2004 and 2006 cycles.

Increasingly, companies such as IBM, Colgate Palmolive, Wells Fargo and others are adopting

policies prohibiting spending of political funds directly or indirectly to influence elections.

Given the risks and potential negative impact on shareholder value, the proponents believe 3M should adopt a policy to refrain from using treasury funds in the political process.

RESOLVED:

The shareholders request that the board of directors adopt a policy prohibiting the use of corporate funds for any political election or campaign.

SUPPORTING STATEMENT:

We believe this policy should include any direct or indirect contribution that is intended to influence the outcome of an election or referendum. It should also prohibit the use of trade associations or non-profit corporations from channeling our company’s contributions or membership dues to influence the outcome of any election or referendum.

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that the shareholders of Procter & Gamble (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:

1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary political contributions and expenditures not deductible under section 162 (e)(1)(B) of the Internal Revenue Code, including but not limited to contributions to or expenditures on behalf of political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code and any portion of any dues or similar payments made to any tax exempt organization that is used for an expenditure or contribution if made directly by the corporation would not be deductible under section 162 (e)(1)(B) of the Internal Revenue Code. The report shall include the following:
   1. An accounting of the Company’s funds that are used for political contributions or expenditures as described above;
   2. Identification of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure; and
   3. The internal guidelines or policies, if any, governing the Company’s political contributions and expenditures.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the company’s website to reduce costs to shareholders.

SUPPORTING STATEMENT

As long-term shareholders of Procter & Gamble, we support transparency and accountability in corporate spending on political activities. These activities include direct and indirect political contributions to candidates, political parties or political organizations; independent expenditures; or electioneering communications on behalf of a federal, state or local candidate.

Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with recent federal ethics legislation.  Absent a system of accountability, company assets can be used for policy objectives that may be inimical to the long-term interests of and may pose risks to the company and its shareholders.

Procter & Gamble contributed about $673,000 in corporate funds since the 2002 election cycle.  (CQ’s PoliticalMoneyLine:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.)

However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures.  For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political contributions, including payments to trade associations and other tax exempt organizations. This would bring our Company in line with a growing number of leading companies, including Pfizer, Aetna and American Electric Power that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.

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“A good portion of our dialogues and resolutions resulted in agreements with companies to improve policies and provide more transparency,” said Matthew Patsky, CEO of Trillium. “Both are helpful in assessing the environmental, social and governance risks and their financial impact on shareholders.”

Trillium’s ESG program addressed a wide range of concerns in 2011, including climate change and fossil fuel dependency, indigenous peoples’ rights, discrimination in the workplace, community-level impacts of industrial and energy production, and a free and open Internet.

Environmental Advocacy

Roughly half of Trillium’s engagements in 2011 focused on the environment or environmental health matters.

Concerned with the risks associated with the controversial practice of hydraulic fracturing, Trillium filed a shareholder proposal at energy company Anadarko Corporation (APC), which has a large interest in the Marcellus Shale.  “Following a productive dialogue, we withdrew a shareholder proposal when the company agreed to expand and improve its public reporting on hydraulic fracturing. There’s more to be done and we’ll continue to advocate at Anadarko and other companies for increased transparency and the safest practices,” said Shelley Alpern, Director of ESG Research and Shareholder Advocacy.

Dialogue with Costco (COST), the warehouse-style consumer products retailer, produced another constructive outcome. The company produced and released to Trillium and Green Century Funds a substantially improved seafood sustainability policy. “Costco will discontinue selling twelve wild species identified as ‘at great risk’ by the Marine Stewardship Council, up from seven,” said Susan Baker, Senior Research Analyst at Trillium. “The company is also partnering with reputable nongovernmental organizations to come into compliance with best practice standards for shrimp and salmon aquaculture.”

We were able to withdraw a shareholder proposal that we filed with food distribution company   Sysco Corporation (SYY) after the company agreed to participate in the Carbon Disclosure Project, the Carbon Disclosure Project Water Survey, and to fully develop its sustainability strategy to include areas such as water scarcity and sustainable agriculture. “We look forward to the ongoing dialogue with the company as we continue to meet with its senior executives in the months to come,” commented Jonas Kron, Director of ESG Research and Shareholder Advocacy.

Trillium also took steps to help ward off the construction of the proposed Pebble Mine in Bristol Bay Alaska. Proposed by the U.K.-based Anglo-American (AAM.SW), Pebble Mine, if built, will be the largest open pit mineral mine in North America. It would generate billions of tons of mining waste to be held behind a system of dams (equivalent to the Three Gorges dams in China) in a highly earthquake-prone area – and one that serves as the breeding grounds for the largest sockeye salmon run in the world. Currently the Environmental Protecting Agency (EPA) is reviewing the proposed mine to determine whether it should veto the project under its Clean Water Act authority. In April Trillium organized a group of shareholders representing $170 billion of assets under management to publicly issue a joint statement calling for the agency to protect this vitally important national resource.  “Within 48 hours of publication, EPA staffers in charge of the review requested a meeting with Trillium. At that meeting we had ample time to express our concerns and were pleased at how seriously they were taken,” Kron said.

 
Corporate Political Spending

In 2011, shareholders expressed their deep discomfort with corporate political spending more strongly than ever before. In the spring, forty-six percent (46%) of votes cast by Halliburton (HAL) shareholders supported our proposal for greater transparency and oversight at the energy services company, as did 44% of the vote at State Street (STT). And for the first time, a resolution of this type filed at mobile phone company Sprint Nextel (by the New York Employees Retirement System) received a majority vote.

These votes were a fitting cap to a proxy season that started early last August, when Trillium was part of a shareholder group that responded promptly to the revelation that a number of Minnesota-based companies had given substantial contributions, via a business front group, to a gubernatorial candidate with extreme anti-gay views. As protestors demonstrated at its stores, Target Corporation (TGT) became the focus of a nationwide boycott that received generous media attention during a slow news month. Within days of the initial revelations, Trillium filed shareholder resolutions at Target, Pentair (PNR), Best Buy (BBY) and 3M (MMM) calling for a review of existing political donations policies and tighter oversight of the reputation and other risks incurring from them.

“These ill-considered donations represented a betrayal of these companies’ commitment to valuing diversity, and illustrated the widening reach of corporations in the wake of Cititzens United,” said Alpern, referring to the 2010 Supreme Court decision that removed significant barriers to corporate political involvement. With the exception of 3M (where our resolution gained 31% of the vote), the resolutions were eventually withdrawn at all of the companies after they demonstrated that they had reviewed and improved their oversight of political contributions and the procedures in place for vetting potential recipients. A multiyear national shareholder campaign coordinated by the Center for Political Accountability has resulted in the adoption of best practices in politicaldisclosure by 85 companies, of which 50 are in the S&P 100.

 
Conflict Minerals

Trillium took part in a meeting with the Securities and Exchange Commission (SEC) to discuss proposed rules on conflict minerals mandated by the passage of the Dodd-Frank Financial Reform Act.  Conflict minerals are those whose proceeds finance fighting by armed groups in war-torn regions, particularly the Democratic Republic of the Congo (DRC). “We were gratified to see several of our recommendations included in the SEC’s recently proposed new rules,” said Susan Baker. In February, Trillium was part of an investor coalition representing nearly $200 billion assets that released a statement calling on companies to condemn the use of minerals whose trade promotes the conflict in the DRC and take immediate steps to ensure that these minerals are not used in their products.

With other socially responsible and faith-based investors, Trillium also lobbied for the passage of landmark legislation in California (SB 861) that will forbid companies that do not comply with disclosure requirements under the SEC’s conflict mineral rules from bidding on state contracts for goods and services. The legislation passed the Senate on June 1 and is currently pending in committee.   

 
Internet Privacy and Freedom of Expression

CenturyLink (CTL), the nation’s third largest telecommunications company, finally owned up to its responsibilities regarding Internet privacy and freedom of expression. Trillium’s well-supported 2009 and 2010 shareholders proposals (both received about 30% of the vote) had asked the company to report on how it would avoid violating Internet users’ privacy, after it was revealed to be in business with an online advertising company that secretly monitored Internet users’ browsing activities. In exchange for the withdrawal of our resolution this year, CenturyLink agreed to incorporate privacy and freedom of expression responsibilities into its governing documents.

Trillium’s 2011 shareholder proposals on what is called “net neutrality” at AT&T (T), Verizon (VZ) and Comcast (CMCSA) were excluded from the companies’ ballots with permission from at the Securities and Exchange Commission, on the grounds that they focused on a matter of “ordinary business.”   We were pleased, however, that the SEC’s decision was roundly criticized by U.S. Senators Al Franken (D-MN) and Ron Wyden (D-OR). In March, they wrote to SEC Chairman Shapiro to object to the decision, asserting “Whether the government will preserve and protect today’s free and open Internet is the telecommunications and free speech issue of our time.”

 
LGBT Workplace Policies

In 2010, we worked with the Equity Foundation to file a shareholder proposal at Gardner Denver (GDI), asking the manufacturer to recognize sexual orientation and gender identity expression in its nondiscrimination policy; it garnered the support of 49% of shareholder votes. “To our surprise, it was necessary to re-file the proposal in 2011; the resubmission was successful in spurring the company to adopt our policy recommendation and we subsequently withdrew the proposal,” said Jonas Kron. “In contrast, Lowes Corporation (LOW) responded very positively and quickly to our request, and now its 200,000 employees are protected by an up-to-date policy that includes gender expression.”

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About Trillium Asset Management, LLC

Boston-based Trillium Asset Management, LLC is the oldest independent investment advisor devoted exclusively to sustainable and responsible investing. We believe examining environmental, social, and governance factors as an integrated part of the investment process can lower portfolio risk and help identify the best managed companies. With close to $1 billion in assets under management, we have been managing equity and fixed income investments for high net worth individuals, foundations, endowments, religious institutions, and other non-profits since 1982. A leader in shareholder advocacy and public policy work, our goal is to deliver both impact and performance to our investors.

 2011 Shareholder Proposals

Bolded items indicate a “lead filing,” where Trillium Asset Management, LLC leads a coalition of shareholder advocates; all others are where we have co-filed in collaboration with other lead filers.  

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Led by Trillium and Walden, 21 investors sponsored a shareholder resolution at Target urging the Board to institute a comprehensive review of Target’s political contributions, including criteria for donations to candidates and how such donations might have a negative impact on Target’s reputation.

“This is at least one more company going on record expressing their preference to be kept out of that line of political spending,” said Shelley Alpern, vice president at Trillium Asset Management Corp., one of the investors that led the push for more transparency at Target.

Click here to read the LA Times article.
Click here to read the press release issued by Trillium and Walden.

Target and Best Buy made contributions of $150,000 and $100,000, respectively, to MN Forward.  After the contributions were disclosed in state filings, Target in particular drew the ire of retail consumers, gay rights organizations, and those concerned with the proliferation of corporate political spending in the aftermath of the US Supreme Court’s Citizens United decision in 2010. A nationwide boycott ensued. Target’s CEO Gregg Steinhafel issued an apology, but the company did not ask for its funds to be returned.

The contributions also disturbed the company’s shareholders. Trillium Asset Management (“Trillium”), Walden Asset Management (“Walden”), the Calvert Group and Domini Social Investments, quickly filed shareholder proposals at Target, Best Buy and Pentair and 3M as well,  two other companies that gave large donations to MN Forward. Numerous shareholders joined in co-filing the resolutions, including foundations, religious investors, additional investment firms and individuals.

The shareholders of Ford Motor (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:

1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:
   1. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and
   2. The title(s) of the person(s) in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the Company’s website.

SUPPORTING STATEMENT

As long-term shareholders of Ford Motor, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.  Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws.   Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

Ford Motor contributed at least $1,921,037 in corporate funds since the 2002 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.) 

However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations for political purposes. This would bring our Company in line with a growing number of leading companies, including Aetna, American Electric Power and Microsoft that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.

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The shareholders of Halliburton (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:

1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:
   1. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and
   2. The title(s) of the person(s) in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the Company’s website.

SUPPORTING STATEMENT

As long-term shareholders of Halliburton, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

Halliburton contributed at least $204,000 in corporate funds since the 2002 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.)

However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. In many cases, even management does not know how trade associations use their company’s money politically. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax exempt organizations for political purposes. This would bring our Company in line with a growing number of leading companies, including Aetna, American Electric Power and Microsoft that support political disclosure and accountability and present this information on their websites.

The Company’s Board and its shareholders need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.

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The Supreme Court’s Citizens United decision in January 2010 legalized the use corporate funds to pay for ads supporting or opposing candidates directly and to contribute to state or local elections.

In July 2010 Pentair donated $100,000 to MN Forward, a group created in the wake of the Supreme Court decision to collect donations by corporations (Wall Street Journal (8/7/10) to influence the outcome of 2010 state races. MN Forward focuses on economic policies and appears to ignore a candidate’s other positions in making endorsements and contributions. MN Forward has made campaign contributions to a Minnesota gubernatorial candidate who is a vocal opponent of same-sex marriage and full parenting rights for same-sex households. This triggered demonstrations, petitions, boycotts and considerable negative publicity for Target and Best Buy, which also made significant contributions to MN Forward.

The shareholders believe this example illustrates the risks posed by corporate political expenditures, whether made directly or indirectly, and the serious reputational consequences that could negatively affect the company and shareholder value.

Corporate political spending is of increasing concern to investors and corporations.  Over 75 S&P 500 companies now disclose political expenditures on their website, including half of the S&P 100. Shareholder resolutions urging such disclosure averaged more than 30% in favor of the resolution in 2010, indicating strong investor concern.

In the aftermath of Citizens United, we believe the Board should review Pentair’s policies and practices regarding political spending and report results to shareowners, with particular attention to the potential risk of such contributions to our company’s reputation and competitiveness. As long-term shareholders of Pentair, we support transparency and accountability regarding direct and indirect political contributions to candidates, political parties, political organizations or ballot referenda; independent expenditures; and electioneering communications on behalf of a federal, state or local candidate.

RESOLVED

The shareholders request that the independent members of the Board of Directors provide a comprehensive report on Pentair’s:

1. Policies and procedures for political contributions and expenditures (direct and indirect) made with corporate funds, and the process for assessing their potential impacts on the company’s public image, sales and profitability;
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include the following:
   1. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and
   2. The title of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be disclosed to shareholders by Sept 2011.

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The shareholders of State Street (“Company”) hereby request that the Company provide a report, updated semi-annually, disclosing the Company’s:

1. Policies and procedures for political contributions and expenditures (both direct and indirect) made with corporate funds.
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include:
   1. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and
   2. The title(s) of the person(s) in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be presented to the board of directors’ audit committee or other relevant oversight committee and posted on the Company’s website.

SUPPORTING STATEMENT

As long-term shareholders of State Street, we support transparency and accountability in corporate spending on political activities. These include any activities considered intervention in any political campaign under the Internal Revenue Code, such as direct and indirect political contributions to candidates, political parties, or political organizations; independent expenditures; or electioneering communications on behalf of federal, state or local candidates.

Disclosure is consistent with public policy, in the best interest of the company and its shareholders, and critical for compliance with federal ethics laws. Moreover, the Supreme Court’s Citizens United decision recognized the importance of political spending disclosure for shareholders when it 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.” Gaps in transparency and accountability may expose the company to reputational and business risks that could threaten long-term shareholder value.

State Street contributed at least $160,600 in corporate funds since the 2002 election cycle.

However, relying on publicly available data does not provide a complete picture of the Company’s political expenditures. For example, the Company’s payments to trade associations used for political activities are undisclosed and unknown. The proposal asks the Company to disclose all of its political spending, including payments to trade associations and other tax-exempt organizations for political purposes. This would bring our Company in line with a growing number of leading companies, including Prudential, US Bancorp and Capital One that support political disclosure and accountability and present this information on their websites.

This past year the Company reviewed its policies and we commend them for seriously considering these issues. However, the Company has not changed its policies and its Board and shareholders still need complete disclosure to be able to fully evaluate the political use of corporate assets. Thus, we urge your support for this critical governance reform.

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The Supreme Court’s Citizens United decision in January 2010 legalized the use of corporate funds to directly pay for ads supporting or opposing candidates and to contribute to state or local elections.

3M contributed at least $1.4 million in corporate funds since the 2002 election cycle. (CQ:  http://moneyline.cq.com/pml/home.do and National Institute on Money in State Politics: http://www.followthemoney.org/index.phtml.)

In September 2010, 3M donated $100,000 to MN Forward, a group created in the wake of the Supreme Court decision to collect donations by corporations (Wall Street Journal (8/7/10) to influence the outcome of 2010 state races. MN Forward focuses on economic policies and appears to ignore a candidate’s other positions in making endorsements and contributions. MN Forward made campaign contributions to a Minnesota gubernatorial candidate who is a vocal opponent of same-sex marriage and full parenting rights for same-sex households. This triggered demonstrations, petitions, boycotts and considerable negative publicity for Target and Best Buy, which also made significant contributions to MN Forward.

The shareholders believe this example illustrates the risks posed by corporate political expenditures, whether made directly or indirectly, and the serious reputational consequences that could negatively affect the company and shareholder value.

Corporate political spending is of increasing concern to investors and corporations. Over 75 S&P 500 companies now disclose political expenditures on their website, including half of the S&P 100. Shareholder resolutions urging such disclosure averaged more than 30% in favor in 2010, indicating strong concern. As long-term shareholders of 3M, we support transparency and accountability regarding direct and indirect political contributions to candidates, political parties, political organizations or ballot referenda; independent expenditures; and electioneering communications on behalf of a federal, state or local candidate.

In the aftermath of Citizens United, we believe the Board should review 3M’s policies and practices regarding political spending and report results to shareowners, with particular attention to the potential risk of such contributions to our company’s reputation and competitiveness.

RESOLVED

The shareholders request that the independent members of the Board of Directors provide a comprehensive report on 3M’s:

1. Policies and procedures for political contributions and expenditures (direct and indirect) made with corporate funds, and the process for assessing their potential impacts on the company’s public image, sales and profitability;
2. Monetary and non-monetary contributions and expenditures (direct and indirect) used to participate or intervene in any political campaign on behalf of (or in opposition to) any candidate for public office, and used in any attempt to influence the general public, or segments thereof, with respect to elections or referenda. The report shall include the following:
   1. An accounting through an itemized report that includes the identity of the recipient as well as the amount paid to each recipient of the Company’s funds that are used for political contributions or expenditures as described above; and
   2. The title of the person or persons in the Company who participated in making the decisions to make the political contribution or expenditure.

The report shall be disclosed to shareholders by Sept 2011.

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Political spending by companies is increasingly controversial, heightened by the recent Citizens United Supreme Court decision, which allows companies to make independent expenditures in favor of or in opposition to, a candidate’s election campaign.

Corporate expenditures supporting a contentious 2010 ballot initiative suspending California’s Global Warming Solutions Act added fuel to the controversy, as did Target and Best Buy contributions for a controversial candidate for Governor in Minnesota.

Over the last five years, corporate political spending has become a major investor concern. Investors asked hundreds of companies to disclose their policies establish board oversight and disclose all direct and indirect expenditures for political purposes. More than seventy-five S&P 500 companies now disclose their political expenditures and policies on their website. Shareowner proposals urging such disclosure averaged more than 30 percent of votes in 2010, indicating strong investor support.

Many companies are updating their political spending policies. For example, Morgan Stanley stated it will not make direct or indirect independent political expenditures.

Left out of many company commitments, however, is transparency around payments to trade associations and other tax-exempt groups for political purposes.

IBM is on the board of the US Chamber of Commerce, which announced it will spend $75 million in political campaigns in 2010. The Chamber, allegedly on behalf of the business community, lobbies, speaks publicly and puts political dollars to work which effectively challenge IBM’s positions on environmental issues. IBM has strong environmental policies and urges companies in its supply chain to follow suit.

Yet as a Chamber board member, it is our understanding that IBM does not seek to influence or challenge the Chamber’s environmental positions.

IBM also has clear policies prohibiting political spending, but does not challenge the Chamber on its partisan political activities. These inconsistencies could be harmful to IBM’s reputation.

The Chamber’s website states: “Directors determine the U.S. Chamber’s policy positions on business issues and advise the U.S. Chamber on appropriate strategies to pursue. Through their participation in meetings and activities held across the nation, Directors help implement and promote U.S. Chamber policies and objectives.” As a Chamber board member IBM certainly may be perceived as supporting its policies.

RESOLVED

Shareholders request that the independent Board members institute a comprehensive review of IBM’s political spending policies and oversight processes, both direct and indirect, including through trade associations, and present a summary report by September 2011. The report may omit confidential information and limit costs. Items for review include:

1. Review and disclosure of any direct and indirect expenditures supporting or opposing candidates, or for issue ads designed to affect political races, including dues and special payments made to trade associations, such as the U.S. Chamber of Commerce, or political and other organizations that can hide any contributions.
2. Risks and responsibilities associated with serving on boards of and paying dues to trade organizations when positions of the trade association contradict the company’s own positions.
3. Management and board oversight processes for all political spending, direct or indirect.

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The Target web site appears to have a thoughtful, transparent process for reviewing political spending, with its disclosure of oversight and 2008 contributions over $5,000.

The web site states “before any contribution is made, we determine that it is consistent with our business interests and under the circumstances, is an appropriate means of advancing our public policy position.”

However, in July 2010 Target donated $150,000 to a political group, Minnesota Forward, which actively supports a candidate for Governor who is a vocal opponent of same-sex marriage, as well as full parenting rights for same-sex couples.

Ironically, Target has been known for forward-looking policies and benefits for gay and lesbian employees, having an explicit policy that bans discrimination based on sexual orientation and offering domestic partner benefits.

The Minnesota Forward contribution resulted in a major national controversy with demonstrations, petitions, threatened boycotts and considerable publicity. Within one week Target CEO Gregg Steinhafel apologized in a letter to employees.

After the Supreme Court’s Citizens United decision, companies may now use corporate funds to pay for ads supporting or opposing candidates directly and to contribute to state or local elections. Previously this was illegal.

According to the Wall Street Journal (8/7/10), Minnesota Forward was created in the wake of the Supreme Court decision to collect donations by corporations. While Minnesota Forward focuses on candidates with tax and business policies it supports, it appears to ignore a candidate’s broader social or environmental positions in making endorsements and contributions.

Since Target management is using shareholder monies for this and other political contributions, we believe it would have been prudent to undertake a comprehensive review of the implications of such contributions for our company’s reputation and business competitiveness before donating $150,000. We are concerned that management may use the open door of the Citizens United decision to intervene in numerous controversial political contests that could harm the Target brand.

Therefore, in the aftermath of Citizens United, we believe the Board should re-evaluate Target’s policies and practices regarding political spending and disclose to shareowners what new policies will be instituted.

RESOLVED

The shareholders request that the independent members of the Board of Directors institute a comprehensive review of Target’s political contributions and spending processes including:

• The criteria used for such contributions and the broader impact contributions may have on the company’s reputation, public image with consumers and business sales and profitability, including how hoped-for benefits are balanced with the broader costs of endorsing a candidate whose policies may conflict with Target’s publicly expressed values;
• Direct or indirect contributions to candidates and issue ads aimed at affecting political races;
• Support for ballot initiatives at the state level;
• Contributions through trade associations such as the U.S. Chamber of Commerce, and tax exempt organizations (e.g. 501(c)4s and 527s) which can redistribute contributions for political purposes without having to disclose such transactions; and
• Oversight processes by management and the Board.

The report may omit confidential information and costs may be limited.

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