RESOLVED: The shareholders of Southern Company (“Company”) hereby request that the Company provide a report updated semi-annually disclosing:
Policies and procedures for political contributions (both direct and indirect) made with corporate funds. Monetary and non-monetary contributions to political candidates, political parties, political committees and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code including the following:
§ An accounting of the Company’s funds contributed to any of the persons described above;
§ The business rationale for each of the Company’s political contributions; and
§ Identification of the person or persons in the Company who participated in making the decisions to contribute.
This report shall be posted on the company’s website to reduce costs to shareholders.
As long-term shareholders of Southern Company, we support policies that apply transparency and accountability to corporate political giving. In our view, such disclosure is consistent with public policy in regard to public company disclosure.
Company executives exercise wide discretion over the use of corporate resources for political purposes. They make decisions without a stated business rationale for such donations. According to the Center for Responsive Politics (http://www.opensecrets.org/softmoney/index.asp), in 2001-02, the last fully reported election cycle, Southern Company contributed at least $963,957 in “soft dollar” donations.
Relying only on the limited data available from Federal Election Commission and the Internal Revenue Service, the Center for Responsive Politics, a leading campaign finance watchdog organization, provides an incomplete picture of the Company’s political donations. Complete disclosure by the company is necessary for the Company’s Board and its shareholders to be able to fully evaluate the political use of corporate assets.
Although the Bipartisan Campaign Reform Act enacted in 2002 prohibits corporate contributions to political parties at the federal level, it allows companies to contribute to independent political committees, also known as 527s.
Absent a system of accountability, corporate executives will be free to use the Company’s assets for political objectives that are not shared by and may be inimical to the interests of the Company and its shareholders. There is currently no single source of information that provides the information sought by this resolution. That is why we urge your support for this critical governance reform.