Who’s getting Wal-Mart’s money?
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Who’s getting Wal-Mart’s money?
KAI RYSSDAL: There were some interesting things about Henry Paulson’s nomination the other day. Another Goldman Sachs guy running the Treasury. That he’s such a serious environmentalist. And how he chooses to make his political donations. Just a couple of hours after he was tapped we knew what politicians Paulson had given money to. Which party. How much. The whole thing. The law says individual contributions have to be disclosed. Corporate donations do, too. But some Wal-Mart shareholders don’t think their company’s living up to the spirit of the law. They’ve got a resolution on the agenda at Wal-Mart’s annual meeting tomorrow. The world’s biggest retailer would have to reveal all political payments made with corporate funds. Marketplace’s John Dimsdale reports on a growing trend.
JOHN DIMSDALE: Resolutions forcing corporate disclosures of political contributions have been gaining popularity over the last two years. They usually get around 10 to 20 percent support. Last year’s effort at Wal-Mart received 9 percent.
This year, for the first time, the movement is endorsed by Institutional Shareholder Services, which advises investors on how to vote their proxies. That’s welcome news for the Center for Political Accountability, which has spearheaded the political contribution disclosure drive. Bruce Freed is the Center’s co-director.
BRUCE FREED: You’re beginning to get a recognition on the part of institutional investors and others that political spending by companies carries significant risks. And they want to know where the companies are spending their money and they want their board of directors to oversee that.
Tomorrow’s Wal-Mart resolution is sponsored by the Teamsters. The union’s secretary treasurer, Tom Keegel, says the company’s political contributions have hurt shareholder investments.
TOM KEEGEL: We know that they’ve made significant contributions to the Texas Conservative Coalition, actually whose policies fly in the face of Wal-Mart’s non-discrimination policies for sexual orientation. And of course from our perspective, our pension funds and other worker funds, we take umbrage to our funds being used for the Texas coalition because of its support for the right-to-work laws.
Most companies — including Wal-Mart — oppose the disclosure requirement. Wal-Mart would not give us an interview to explain the board of directors’ opposition, but said in a written statement the company already reports its political donations in various federal, state and local regulatory filings.Tom Keegel of the Teamsters says those disclosures don’t tell the whole story.
KEEGEL: Out of their corporate treasury they spent $2 million on politics last year. But what we don’t know is the amount of money that’s contributed to trade associations. We don’t know how much money is spent in state legislatures. Because the fact of the matter is they make significant contributions in the states where they do business.
With shareholders already clamoring for more information on everything from executive salaries to environmental policies, Charles Elson, the director of the University of Delaware’s Center for Corporate Governance, says its time for companies to be more open about their political activities.
CHARLES ELSON: If it’s a good donation, and it benefits the company or benefits the interests of the company, then the shareholders ought to know about it. And if you’re afraid to disclose it, frankly, that suggests to the shareholders that maybe you believe that what you’re doing is not the best thing long-term for the company.
The sponsors of tomorrow’s resolution don’t expect it to pass. But they say the issue is getting traction and it’s only a matter of time before board members change their attitudes. Ten companies, including McDonalds, have responded to shareholder pressure by posting more information on their websites about contributions to candidates and issue advocacy organizations.
In Washington, I’m John Dimsdale for Marketplace.
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