Money & Politics | Daily Report

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At Occidental Petroleum's annual meeting in Santa Monica today, shareholders will vote on a proposal that would require the company to disclose its direct and indirect political spending. Shareholders at two other large California companies, Northrup Grumman and Charles Schwab, will vote on similar proposals later this month.

The issue of corporate political expenditures is surfacing at a number of annual meetings nationwide this year, partly in response to a January 2010 Supreme Court decision. The case, Citizens United v. Federal Election Commission, created new avenues for unlimited sums of corporate and union money to enter elections without being disclosed to the public.

After it came to light that Occidental Petroleum had contributed $300,000 to a campaign that would have effectively repealed California's strict emissions standards law, a group of shareholders jumped into action. In contrast to undisclosed contributions made possible by the Citizens United case, contributions to ballot committees must be reported in California.

Now a group of seven shareholders are asking the company to disclose all political expenditures, beyond those required by law. The proposal asks for a report of payments made to trade associations such as the U.S. Chamber of Commerce, social welfare organizations and political organizations. They are also seeking more information about the process the company uses to make its political expenditure decisions.

The Boards of Trustees of the New York City Pension Funds has submitted a very similar proposal for vote at Charles Schwab's annual meeting on May 17. In its statement of opposition, the company said it had contributed a total of $30,000 to local political action committees in San Francisco and does not contribute to federal election campaigns. Therefore, the company argues, the concerns expressed by the stockholder do not apply to the company's spending.

Like Charles Schwab, Northrup Grumman opposes the vote because there is “no discernible benefit to shareholders,” according to the company's proxy filing. “Any requirements related to disclosure of political contributions beyond current laws and regulations should apply to all participants in the political process, not just Northrup Grumman.”

The Center for Political Accountability, an advocacy group that has supported a number of shareholder proposals to disclose political spending over the past eight years, estimates that the average share of "yes" votes on corporate political spending disclosure proposals used to be 9 percent, but is now around 30 percent.

Some corporations have voluntarily agreed to disclose and require board oversight of their political spending with corporate funds, according to a list compiled by the advocacy group.  California-based Hewlett Packard was noted as one of the "Best in Disclosure." A recent review of the disclosure policies of large companies by the Los Angeles Times, however, shows that corporate transparency varies dramatically.

Last month, the SEC ruled that companies must allow shareholder proposals that seek an annual vote on corporate political expenditures. Home Depot had challenged a nonbinding proposal brought by a shareholder, but it will now go to a vote on June 2. The SEC’s ruling opens the door to similar proposals at other companies next year.