Following the Corporate Campaign Money

With political conventions almost here, questions remain of what corporations should do about disclosing campaign contributions. It's an issue that CEOs can't ignore.

One group with ideas is the Washington-based Center for Political Accountability, a non-partisan, non-profit group that is pushing corporations to develop in-house standards for political giving and disclosure.

"We want transparency and accountability and of course, good ethics," executive director Bruce Freed told me in a telephone interview.

Freed's group is trying to educate companies about the benefits of full disclosure and is encouraging boards of directors to take a pro-active approach in insisting on knowing how a company chooses its funding beneficiaries and where the money actually goes.

That doesn't just stop with direct contributions to parties or candidates but involves trade associations such as the U.S. Chamber of Commerce, which all together have amassed a $100 million warchest for the 2008 elections, according to the National Journal. Freed's group has called for greater scrutiny of such giving.

Another strategy the Center is undertaking is to energize shareholders to demand corporate funding accountability through shareholders resolutions. This is the same approach used by activists for shareholder democracy and environmental issues. Freed says that this past proxy season, annual meetings saw resolutions calling for better disclosure of political giving get votes in the 20 to 30 percent range. While not enough for resolutions to pass, percentages that large are enough to put political giving on a company's radar screen.

So far, the Center has counted about 52 large companies that have adopted political disclosure rules, including Aetna, General Electric, Xerox, Pfizer, Prudential Financial and others, Freed says. The same group of companies tends to be progressive on issues such as shareholder democracy, he notes. Some companies that have refused to adopt such rules are coal firm Massey Energy, which is notorious for pouring money into state campaigns in coal states and information giant The McGraw-Hill Companies, Freed says.

One gray area involves 527 contributions and Political Action Committee (PAC) funding. So far, Barack Obama's campaign hasn't accepted PAC funding, Freed says, but individual corporate executive are free to make contributions, along with soft money.

As the election season approaches, The Corner Office will be watching where the money is going.

(Image by Shark Attacks via Flickr, CC 2.0)