The Hon. President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500
RE: Take action on money in politics; immediately issue an executive order to promote transparency in corporate political spending
Dear President Obama:
Investors have been seeking full disclosure of the funds corporations spend to influence elections for more than ten years, but with increasing urgency since the U.S. Supreme Court’s ruling in Citizens United v. FEC, which exponentially amplified the risks of this spending:
As the dominance of undisclosed corporate spending continues to corrupt our democracy, corporate political transparency is imperative for the efficient functioning of our capital markets and as a risk management tool for shareholders, corporate management, and directors.
We urge you in the strongest terms to issue immediately an executive order requiring full disclosure of political spending by business entities receiving federal government contracts, and furthermore require federal contractors to affirmatively certify that they are in compliance with 52 U.S.C. 30119 ban on direct or indirect political contributions.
An executive order shining a light on political spending by contractors would attack the perception and the reality of such “pay-to-play” arrangements. It need simply require that every federal contractor disclose its political spending and that of its senior management and affiliated political action committees post-contract award. By requiring this, the public may judge for themselves whether contracts are being awarded and administered based on merit rather than political favors, as the Court in Citizens United desired.
Corporate political transparency is necessary for the efficient functioning of our capital markets and as a risk management tool for shareholders, corporate management, and directors. Corporations claim this spending is necessary to protect their interests, but shareholders have no way to monitor these activities, or assess their risks.
In addition, trade associations and similar groups have become significant conduits for ‘indirect’ corporate political spending. These organizations are not required to disclose the source of their funding, often leaving companies in the dark about the use of their money as well as exposing them to unnecessary and dangerous risks.
Disclosure will help us distinguish between companies that compete and win through superior products and services, and those, like Enron, that merely appear to do so due to gain superior access to lawmakers and push anti-public interest and environmental positions.
The executive order would also require them to disclose the outside spending that was authorized by the Supreme Court in Citizens United. The majority in Citizens United properly noted that disclosure requirements “do not prevent anyone from speaking.” The justices also declared that:
“Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so- called moneyed interests.”
The flip side of transparency is secrecy and the specter of hundreds of millions of dollars in secret campaign cash coming from companies that derive much of their wealth from government contracts. In order to keep in check actual or perceived corruption in government contracting, it is imperative that there be full disclosure of campaign contributions and expenditures by federal government contractors.
An Executive Order on government contracting would be just one modest step toward fundamental reform – but nevertheless a significant move forward.
We the People desperately need your leadership to preserve our democracy. Please act now.
As You Sow
Bonwood Social Investments
Catalyst Fund / Liberty Hill Foundation
Christensen Global Fund
Clean Yield Asset Management
George B. Storer Foundation
Incourage Community Foundation
Jessie Smith Noyes Foundation
John Merck Fund
Merck Family Fund
Penney Family Fund
Rockefeller Brothers Fund
The Educational Foundation of America
The Nathan Cummings Foundation
Trillium Asset Management
Wallace Global Fund
Zevin Asset Management, LLC
Read the full press release on the Confluence Philanthropy website.
Click here for more quick reads featuring interesting articles on philanthropy and impact investing.