As the 2020 proxy season unfolds, this is the moment to assess the real impact of corporate political spending, the heightened risk companies and our society face, and what more needs to be done to address it.

The amount and consequences of company spending shouldn’t be underestimated. The common misperception is that individuals and private companies are the dominant donors. The Center for Political Accountability (CPA) undertook the first look into the sources of money for and the impact of spending by six partisan “527” committees that have reshaped state and national politics over the past decade. They included the Republican and Democratic governors’ associations, state legislative campaign committees, and attorneys general associations. Here’s what we found:

From 2009 to 2018, public companies and their trade associations accounted for almost half—46 percent or $594 million—of the $1.3 billion raised by the groups.
During the same period, individuals contributed 22 percent, private companies 16 percent, and unions under 10 percent.

A Wall Street Journal headline—“For Big Companies, Much of Politics Is Local”—underscored CPA’s findings. The accompanying article said the impact of corporate money was amplified because the political committees targeted their spending on key states and races.

What have been the consequences? Attacks on efforts to address climate change, women’s reproductive rights and LGBTQ rights, and gerrymandering that sometimes is racially driven.

These outcomes conflict with the donating companies’ core values and positions and pose serious risks to their reputations and bottom lines. Companies today confront a hostile environment. CPA polling on public attitudes toward corporate political spending reinforces its message to companies about the risk their spending poses. CPA is working with the George Washington University School of Political Management, which included six of our questions in a late September 2019 GW Politics/YouGov poll. Here are the key findings:

77.7 percent of respondents strongly or somewhat agreed with the statement “Corporations have too much power over elections and policymaking in the United States today.”
75.8 percent of respondents strongly or somewhat agreed with the statement “Corporations should be required to publicly disclose all their political spending on a quarterly basis.”

How have companies been responding? The 2019 CPA-Zicklin Index, the annual benchmarking of the political disclosure and accountability policies of the S&P 500 (these companies are the major spenders), found:

The number of companies with the best political disclosure and accountability policies (scores of 90 or above) jumped to 73, a 160 percent increase over 2015 when the Index was expanded to cover the S&P 500;
Three-fifths of the S&P 500 have some form of political disclosure; and
Over half of the S&P 500 have board oversight of their political spending.

CPA will expand its effort to make political disclosure and accountability uniform and universal and change how companies approach spending. This proxy season, its resolution has been or is set to be filed at 34 companies. The goal is to file at least 40 to build on last year’s 13 agreements and record average vote of 36.4 percent.

Bruce Freed
President, Center for Political Accountability

Dan Carroll
Vice President for Programs, Center for Political Accountability