WASHINGTON – Labor unions facing a government order to disclose their election spending are using their clout as stockholders to try to extract new details about the corporate world's political giving.
Pension funds at the Service Employees International Union (search), the Central Laborers and the Teamsters are sponsoring shareholder resolutions that ask companies to make available to stockholders information about donations to political groups and other election spending.
Stockholders will consider the proposals at annual meetings starting later this month.
Teamster (search) pension fund spokesman Louis Malizia said a lot of corporate money goes into politics and that stockholders need easily accessible details to judge how well that money is spent.
He said that a Labor Department (search) requirement that unions, starting this summer, disclose their spending on election voter drives and other activities is not a factor in the effort.
"But I'd say that for many of the accounting standards and other disclosure standards, labor is held to a higher standard than the rest of corporate America," said Malizia, assistant director of the Teamsters' corporate affairs office. "This is just yet another example."
The Teamsters are sponsoring shareholder resolutions on the issue at IBM, SBC Communications, Verizon Communications and Wells Fargo. The Central Laborers' Pension, Welfare & Annuity Funds and SEIU Master Trust have similar proposals at about a dozen companies, from American Express to Waste Management.
Companies are not bound by the resolutions, but several urge shareholders to reject them nonetheless.
Chubb, Citigroup and Union Pacific, for example, say their political action committees already disclose spending information to the Federal Election Commission. Chubb and Citigroup also argue that disclosing business rationales for political donations as the resolutions ask could put them at a competitive disadvantage.
Though Union Pacific is urging a no vote, spokeswoman Kathryn Blackwell said the railroad typically puts in place resolutions that shareholders approve. The corporate board will decide after stockholders vote, she said.
U.S. Chamber of Commerce lobbyist Bruce Josten said many businesses oppose the disclosure resolutions because companies already are buried under new laws and government requirements.
"I think companies feel absolutely besieged with all this junk," said Josten, executive vice president of government affairs. He noted that the AFL-CIO fought the Labor Department rule on union disclosure.
Josten contends ample information is available about companies' political giving. Corporate PACs, which are financed with voluntary and limited donations from company employees, must file reports with the FEC on contributions and spending, for example.
Josten said he did not consider corporate donations to tax-exempt groups to be political giving.
The union pension funds disagree. They say there is no single place where shareholders can find political spending data. They also say that it is often unclear who makes PAC spending decisions or whether company money is used to operate the PACs.
Pension fund officials say company donations to nonparty political groups are particularly hard to find. Some groups file finance reports with the Internal Revenue Service, some to state or local agencies, and some not at all; corporations do not have to report such donations.
Fund officials also are concerned about the effect of the new campaign finance law.
Under the old law, companies and unions gave millions of dollars to the national Democratic and Republican parties, which had to disclose the money to the FEC. Unions gave almost exclusively to the Democrats; businesses gave to both parties but tilted Republican.
Corporations and unions are now banned from giving to the national parties, but they can donate to outside groups that are active in elections and may not have to report the money.
Meg Voorhes of the Investor Responsibility Research Center in Washington believes the new law and the upcoming elections are helping drive a surge in shareholder proposals on political spending. She counts about four dozen this year, compared with four last year and six in 2002.
Bruce Freed, co-director of the Center for Political Accountability, sees a plus for his cause even if the proposals fail.
"It raises the issue and it puts the companies on notice that this is an issue that they need to deal with," said Freed, whose group worked with the union funds on the resolutions.