The indirect political spending of the S&P 100

The Center for Political Accountability and Wharton’s Zicklin Center for Business Ethics recently released a report evaluating the political spending and disclosure practices of the S&P 100. They’ve come up with the “CPA-Zicklin Index” which evaluates factors such as disclosure of various categories of spending, whether the company has a policy on corporate political spending, and board oversight practices. 

The big picture is that more companies seem to be restricting and disclosing certain political spending. The commentary I've seen to date mainly emphasizes this aspect of the report's findings (here, here, and here).

But what I find most interesting are the report’s numbers on indirect political spending policies and practices:

 --“Seventy-five companies do not explicitly prohibit independent expenditures, or they leave open the possibility of such spending. Of these, 11 companies disclose their independent expenditures or say they will disclose if they engage in this spending. Sixty-four do not disclose details of their independent expenditures or are unclear in their policies.” 

--Only 43 companies in the S&P 100 disclose information about their payments to trade associations and to other tax-exempt groups that were used for political purposes, and that information is incomplete. 

--“Of the 53 companies that have a board committee oversee their corporate political spending, only 10 state on their websites that the committee also reviews the company’s indirect expenditures made through trade associations and other tax-exempt groups.”

In short, lots of large companies may be making independent expenditures, payments to trade associations or tax-exempt groups for political purposes, and little of it is disclosed. 

This isn't exactly a surprise. We saw from the 2010 mid-term election that money from independent groups has soared. According to a report by the Campaign Finance Institute after the 2010 mid-term election, independent expenditures and electioneering communications by non-party groups increased 130% from 2008. Election law scholar Richard Hasen has an interesting new essay, which points out that 2012 will be the first presidential election since Watergate in which a significant portion of election money may be secret to the public, but not necessarily to the beneficiaries of the spending.

Are changes to corporate political spending meaningful without restrictions or disclosure of independent expenditures and payments to trade associations or tax-exempt groups?

--Elizabeth Pollman