Timothy Smith is Director of ESG Shareowner Engagement at Walden Asset Management and John Keenan is a Corporate Governance Analyst at the American Federation of State, County & Municipal Employees (AFCSME). This post is based on a recent publication authored by Mr. Smith and Mr. Keenan. Related research from the Program on Corporate Governance includes Shining Light on Corporate Political Spending and Corporate Political Speech: Who Decides?, both by Lucian Bebchuk and Robert Jackson (discussed on the Forum here and here), and Corporate Governance and Corporate Political Activity: What Effect Will Citizens United Have on Shareholder Wealth? by John C. Coates (discussed on the Forum here).
Corporate lobbying disclosure remains a top shareholder proposal topic for 2018. A coalition of at least 74 investors have filed proposals at 50 companies asking for lobbying reports that include federal and state lobbying payments, payments to trade associations used for lobbying, and payments to any tax-exempt organization that writes and endorses model legislation.
Corporate lobbying to influence laws and regulations affect all aspects of the economy, on issues from climate change and drug prices to financial regulation, immigration and workers’ rights. Over $3.3 billion in total was spent on federal lobbying in 2017, with companies spending about $2.6 billion. And companies also spend more than $1 billion yearly on lobbying at the state level. State lobbying is far less visible and transparent than federal lobbying. And trade associations spend over $100 million annually lobbying indirectly on behalf of companies. For example the U.S. Chamber of Commerce has spent over $1.4 billion on lobbying since 1998.
