October 28, 2011
The Center for Competitive Politics
ALEXANDRIA, Va. – The Center for Competitive Politics (CCP) has issued a formal response denouncing many of the findings in the newly-released CPA-Zicklin Index of Corporate Political Disclosure and Accountability, a report generated by the Center for Political Accountability (CPA) in conjunction with the Carol and Lawrence Zicklin Center for Business Ethics Research at The Wharton School of the University of Pennsylvania.
The Index, touted by Bruce Freed of the Center for Public Accountability (CPA) as offering “the first comprehensive portrait of how S&P 100 companies are navigating political spending both as to disclosure and board oversight since Citizens United,” makes the case that more comprehensive disclosure regulation is necessary at a time when “everyone expects massive hidden spending to influence elections,” says Freed.
Brad Smith, founder of CCP, begs to differ with Freed and, as one person who is presumably part of “everyone,” offers another opinion on the matter. “CPA is basically a group of former union and Democratic Party staffers funded by left-wing donors. They have no obligation to worry about the actual interests of shareholders, and nothing suggests that they have the best interest of the business community at heart,” Smith says. “We at CCP believe that corporate management and directors have an obligation to do what is in the best interest of their shareholders, and should plan their political activity – or lack of such activity – based on that trust, not the exhortations of a non-profit whose leaders simply oppose political speech by the business community.”
This response comes on the heels of CCP’s release last week of a report on Activist Investing that is intended to dispute claims made by some groups that corporations and businesses should be wary of the “economic risks” posed by engaging in political speech.
The report, currently posted on CCP’s website, is an attempt to document the efforts of some groups to engage in what is known as “corporate democracy,” or the managed and directed attempt to convince businesses that they put themselves at market risk by speaking out politically.
Allen Dickerson, CCP’s Legal Director and author of the Activist Investing report, notes that the Index erroneously claims that the call for further disclosure comes from the shareholders Freed and CPA purport to be protecting.
“Decisions about political activity are like any other business decision — they involve risk, which varies from company to company and industry to industry. It is misleading to suggest that shareholders are demanding these changes. In fact, when shareholders are approached with resolutions authored by CPA and others, those resolutions are routinely and resoundingly defeated,” he notes.
CCP hopes their response to today’s report will help spawn a serious national discussion concerning the role of businesses and their speech in democracy. Politics should return to its persuasive roots, evaluating fully-debated arguments on their merits rather than allowing partisan actors to win by default.