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Religious Shareholders Stump for Union Super PACs

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Hoo boy … this campaign season is exhausting enough already without reporting the efforts of religious shareholder activist groups uniting to undo the U.S. Supreme Court’s Citizens United decision. But, to quote Michael Corleone in the third Godfather film: “Just when I thought I was out, they pull me back in!”

Joining the anti-Citizens United religious shareholders are public-sector unions, riding high after the eight-justice Supreme Court split evenly this week on Friedrichs v. California Teachers Association. The split decision ensures that public-sector unions may continue to collect compulsory union dues. Any honest guesses as to how this money will be spent must include political activity.

For its part, religious shareholder activists As You Sow continue to hold up their end of the bargain, openly working with unions to squelch opposition voices. Although AYS proxy resolutions on corporate political activity have fallen from a record high of 139 in 2014 to 98 resolutions thus far this season, readers may rest assured, as AYS warns in its 2016 ProxyPreview:

More will likely emerge as the year progresses, from the broad coalition of investors and allied public interest groups that wants [sic] companies to disclose more on how they spend on elections and lobbying, with oversight from boards of directors.…

Investor concern about corporate political activity predates the landmark 2010 Citizens United U.S. Supreme Court decision that opened up new avenues for corporate spending; the campaign was started more than a decade ago by the Center for Political Accountability (CPA), which developed the model shareholder proposal still in use for disclosure of election spending. Members of the umbrella Corporate Reform Coalition, which includes many shareholder proponents but a range of other reformers as well, will be active in the upcoming proxy season. The coalition continues to press for mandated election spending disclosure by way of a proposed SEC [Securities and Exchange Commission] mandate but to date has been stymied; this year it is seeking to influence votes at mutual fund companies on the subject and has targeted Vanguard, which in the past has voted often with management.

That sound readers hear is your writer’s eyes pirouetting in their sockets. AYS has targeted nine companies this proxy season – Alphabet, American Airlines Group, AT&T, CenterPoint Energy, Emerson Electric, Raytheon, Spectra Energy, Travelers and Verizon Communications – with multiple resolutions pertaining to political spending and lobbying. The ProxyPreview continues:

The lobbying transparency campaign begun in 2012 is coordinated by Walden Asset Management and the American Federation of State, County and Municipal Employees (AFSCME). For the last three years, political spending reformers and climate change activists also have been asking energy companies about their support for public policies that could mitigate global warming, tying together the two main themes of recent proxy seasons, but these resolutions for the most part are filed ‘to make a point’ but withdrawn before they go to votes.

Seriously? How is this responsible investor behavior? Readers will note also that a ProxyPreview sidebar, authored by John Keenan, corporate governance analyst, AFSCME Capital Strategies (page 29 for those interested), reports:

[A] coalition of 66 investors have filed at least 50 proposals for 2016 which ask companies to disclose their lobbying, including federal and state lobbying, payments to trade associations and third parties used for indirect lobbying, and any payments to tax exempt organizations that write and endorse model legislation. Since 2011, more than 80 investors have filed over 200 shareholder proposals seeking lobbying disclosure. During that time, the proposals have averaged more than 25 percent support while also leading to over 40 withdrawal agreements for improved disclosure.

Followed by these disingenuous howlers:

Investors believe lobbying disclosure safeguards corporate reputation and protects shareholder value. One concern is reputational risk associated with controversial political spending or third party involvement. Companies with a high reputational rank perform better financially, and executives find it much harder to recover from reputation failure than to maintain reputation. The 2016 proposals continue to focus on risks of membership in the American Legislative Exchange Council (ALEC), a tax-exempt organization that convenes state lawmakers and corporations to adopt model laws that include Voter ID and climate change denial. Highlighting a need to manage reputational risks of third party involvement, more than 100 companies have publicly announced leaving ALEC.

It’s hard to imagine Keenan writing this with a straight face. Because, you know, corporations looking out for the best interests of companies, employees, shareholders and all that, for Keenan, seemingly inconsequential stuff. But here’s the rub: Keenan represents a public-sector union, which means his group produces nothing as opposed to private-sector unions employed by the companies whose political activity keeps Keenan awake at night.

Why, after all, would Keenan care? Following Occam’s Razor, the simplest answer is usually the best: AFSCME operates as a political Super PAC, and shutting down opposing views, policies and candidates is their goal. As noted by Mitch Hall in The Federalist this week:

Indeed, some seem to think Citizens United is just another unfair loophole for the nation’s richest companies to use to their advantage. But the Supreme Court’s ruling gave regular individuals and, more importantly, labor unions the exact same right to give as much as they want to political action committees.

In fact, as the Seattle Times reports, nearly half of the top 20 organizational contributors to super PACs so far in 2016 have been unions or their affiliates, not big businesses.

Of course, AFSCME isn’t the only public-sector union affiliated with the nominally faith-based AYS. Others include the California State Teachers Retirement System, NYC pension funds and the City of Philadelphia Public Employees Retirement System. AYS is doing the hump work for the super PAC unions.

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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. He was managing editor of The Heartland Institute's InfoTech & Telecom News from 2010-2012. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2011 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 five 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 Flint, Mich., with his wife Katherine.

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