Acton Institute Powerblog

The ‘Tragedy’ of the (Boston) Common

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BCAM-logo2Boston Common Asset Management bills itself as “a leader in global sustainability initiatives.” Why would an investment portfolio management company label itself with the appellation “Common” when it carries such negative baggage? As it turns out, BCAM embraces “common” as something positive.

From the BCAM website:

Beginning in 1634, the Boston Common served as a common pasture for cattle grazing. As a public good, the Common was a space owned by no one but essential to all. We chose the name Boston Common because, like the Common of old, our work stands at the intersection of the economic and social lives of the community.

Never mind all that John Locke hootie-hoot about private property being the cornerstone of a free society. Please ignore all the papal encyclicals from Pope Leo XIII’s Rerum Novarum onward that champion private property. Oh, yes, and completely disregard the U.S. Constitution, which codifies private-property rights, and pay no attention to the “tragedy of the commons” which inexplicably is ignored here.

One has to give BCAM credit, however, for consistency. They really, really despise privacy whether it’s property, political donations or corporate lobbying (although it’s also assumed they have no issue with the “penumbra of privacy” suddenly discovered in the U.S. Constitution by members of the Supreme Court after somehow every other legal mind overlooked it for nearly two centuries). Privacy for everything else apparently is subject to eradication in BCAM’s book.

BCAM – one of the many members of religious shareholder activist group the Interfaith Center on Corporate Responsibility – weighed-in on its efforts to “shine a light on corporate lobbying practices” the other day on The Huffington Post. BCAM Director of Shareowner Engagement Lauren Compere (who also is a member of the ICCR Governing Board) remarked:

The 2016 U.S. presidential election campaign is set to be the most expensive yet, with some sources suggesting a whopping $10 billion in total costs. The huge price tag of the campaigns have put issues of corporate political spending and lobbying to the forefront as we enter proxy season – the period when many companies hold their annual shareholder meetings, making lobbying one of the hottest topics on the agenda of investors.

Is that so? Try telling that to Jeb Bush, whose campaign burned through $130 million only to achieve also-ran status – and your writer has yet to hear any negative reputational fallout for the corporate contributors to his failed campaign. As for money buying votes, Ms. Compere has it upside down. This week’s presidential primary resulted in a victory for Donald Trump, who spent a whopping 13 cents per vote, while loser Bernie Sanders spent $9 per vote, accordingto a report from the Center for Public Integrity. Both campaigns, it should be noted, receive little to no corporate funding, anonymous or otherwise. CPI also reported Democrat Hillary Clinton spent $3.62 per vote.

Compere changes tack, and continues saying that private donations from corporations are bad because … well, you know … those funds might be used to challenge the nonexistent scientific consensus on climate change:

When companies do their political lobbying behind closed doors it threatens both our democracy and ultimately the credibility and trust in a company’s own brand.

A key part of an investor’s job is to know and understand risk. However in the U.S., as well as many other countries, there are no regulations requiring companies to publicly detail whether they have made direct payments to political parties, candidates, trade associations, special interest groups or lobbyists. This creates a lack of transparency, and increases the risk of corruption.

A lack of transparency also means that companies often don’t know what trade associations are doing on behalf of their members. Ford Motor Company is just the latest to join over 100 companies (including iconic brands Microsoft, PepsiCo, Mars, Wal-Mart, and Unilever), which have left the American Legislative Exchange Council (ALEC) which is involved in drafting model state legislation on gun control, Voter ID laws, Stand Your Ground laws, anti-immigration bills, blocking EPA regulations, and reversing state regulations on renewable energy. Similarly, a number of US companies have left the Chamber of Commerce which has spent over $1bn on lobbying since 1998. While new research from InfluenceMap indicates that major oil companies and their trade associations spent over $100m in 2015 on efforts to obstruct and delay climate policy.

Simply put, we believe it is in the best interests of shareholders for companies to be transparent and accountable about whether they use corporate funds to influence regulation – both directly and indirectly.

Wow. There’s so much to unpack above, but it quickly can be summed up as activist investors of a certain political stripe should use their influence to force corporations to stop any funding of groups or candidates they disagree with regardless whether those actions actually benefit the corporation in question or its other investors. As for InfluenceMap and its impeccable, unbiased “research,” it’s merely more of the same, as noted by the group’s “Mission” on its website:

InfluenceMap is driven by a desire to remove the political gridlock that has hindered the climate change issue since the Earth Summit in 1992, and has since prevented a meaningful global agreement. Whilst the current mood of sustainability-driven CEOs appears to be confident that business is rallying behind the path to appropriate action, policymakers are sceptical, suggesting corporate influence has, and continues to be, a major factor in holding back the policy process. We provide our stakeholders with an online tool to access information on this topic, supporting key engagers in their interactions with companies and corporate representatives. We point to and support the recommendations of a key report on corporate engagement with climate policy from three UN agencies entitled Caring for Climate. It states that corporations be transparent, align their political influences (internally and externally), support climate legislation, and to stop obstructing it.

That’s unbiased stuff, you betcha. Ms. Compere concludes:

A petition has been brought to the SEC asking for the development of rules that require public companies to disclose political contributions to shareholders. Yet, despite over 1.2 million letters submitted in support including institutional investors, leading academics, state treasurers, and even two former SEC Chairs Arthur Levitt and William Donaldson, Congress last year acted to prevent the SEC from implementing such a rule for the next year. A worrying decision, because when corporate lobbying and political contributions take place in the dark it is not only shareholder value that is put at risk, democracy itself is also weakened. And when that happens we all lose.

Worrying? To whom – other than activist shareholders attempting to muzzle opposing voices such as ALEC, the Chamber of Commerce and The Heartland Institute who dare express climate-change skepticism? What group will they target next should their disclosure efforts succeed? BCAM and ICCR might want to up their game when it comes to discussing unsettled science rather than adopting the disingenuous albeit easier route of stifling debate.

It appears Ms. Compere, BCAM and ICCR won’t be happy until all corporations are subject to Commons-era rules that reflect activist shareholders’ disdain for nearly everything private. Should they succeed, it truly would be a tragedy.

Bruce Edward Walker has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. Most recently, he was managing editor of The Heartland Institute's InfoTech & Telecom News. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2007 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past three years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Midland, Mich., with his wife Katherine.

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