The Politics of Business Shareholders Vote on Corporate Campaign Contributions in the US

By Warren Richey, writer of The Christian Science Monitor | The Christian Science Monitor, April 23, 1997 | Go to article overview

The Politics of Business Shareholders Vote on Corporate Campaign Contributions in the US


Warren Richey, writer of The Christian Science Monitor, The Christian Science Monitor


Campaign finance goes to a vote in the US this week - not on Capitol Hill but in the business community.

Shareholders of at least seven major American corporations have the opportunity to sound off on money their companies gave politicians and political causes in 1996 elections.

The first vote comes at the annual shareholders' meeting of Torchmark, an insurance giant based in Birmingham, Ala. Similar votes follow, through May, for DuPont, Exxon, Federated Department Stores, AT&T, US Airways, and Viacom. Hundreds of thousands of corporate dollars poured into Democratic and Republican campaign coffers last year. But until now, few had asked shareholders - who own the contributing companies - about those contributions. Experts in shareholder activism, however, say campaign finance sits low on the agenda for most investors. "The majority of shareholders care more about corporate performance {earnings, profits, dividends}, than who they are contributing to," says Louis Thompson, president of the National Investor Relations Institute in Vienna, Va. "Shareholders understand ... legitimate business expenses like lobbying, and they are willing to defer to management," adds Nell Minow, co-author of three books on shareholder activism. "Shareholders are such a widely diverse group," she adds, "that it would be difficult to ... send a unified message." For more than 90 years it has been illegal in the US for corporations to contribute directly to candidates for federal office. Over the years, corporations found legal loopholes to funnel their money to candidates. No US corporations have been charged with wrongdoing during 1996, but contributions reached new levels as businesses used political action committees and soft dollar contributions to support candidates, parties, and causes. Many corporations view political support and lobbying as a cost of doing business, a kind of political insurance in advance of difficult regulatory or tax issues. …

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