April 29, 2011- It's no secret that corporate political contributions are highly controversial, but a lot of that controversy comes from these donations' very secrecy. As corporations try to keep their political donations under wraps, they face a surge of shareholders demanding to know just where that money's going.

After all, if you've invested in a publicly traded company, wouldn't you want to know whether it's supporting politicians, causes, or agendas with which you disagree?

Politics and proposals
ProxyMonitor.org, which tracks shareholder resolutions and vote tallies at Fortune 100 companies, has been keeping score of donation disclosure and other hot-button issues. The group reports that political spending now enjoys a groundswell in interest among shareholder proposals.

From 2008 through 2010, only 19% of shareholder proposals dealt with political spending. So far in 2011, interest in that topic has nearly doubled, now comprising 35% of social policy resolutions.

Last year's Citizens United Supreme Court case, coupled with high-profile cases at Target (NYSE: TGT ) and Best Buy (NYSE: BBY ) , have all sparked renewed interest in corporate political spending. Word of Target and Best Buy's contentious campaign donations prompted boycotts, consumer uproar, and shareholder scrutiny.

Despite deeper interest in these issues, proposals related to political spending aren't gaining majority support from voting investors so far. Only 21% of Citigroup (NYSE: C ) investors supported a proposal requesting a political contribution report. At IBM (NYSE: IBM ) , requests for reports outlining political contributions and lobbying policy received 31% and 29% support, respectively.

Shareholders at Pfizer (NYSE: PFE ) , Valero Energy (NYSE: VLO ) , and AT&T (NYSE: T ) are also voting on such proposals; results of their votes haven't been posted yet, since Pfizer and Valero met late this week, and AT&T meets today.

Free speech vs. honest speech?
Given the tallies so far, few investors seem to agree with activist shareholders' increasing demands for political contribution transparency — but they should. Whether or not you agree with how your company makes donations, that information will prompt more intense furor and more harmful repercussions if companies don't disclose it openly and promptly.

Boycotts threaten companies' brands, and ultimately, their sales and financial success. Consumers also have every right to know whether a business supports agendas they don't agree with, and to make their purchasing decisions accordingly. And let's face it — it's always worse when somebody sneaks around, rather than just owning up to things.

A new White House plan to require that government contractors disclose their political contributions has added a new wrinkle political contribution controversy. The Chamber of Commerce, a lobbying group representing American businesses, already vocally opposes that plan.

The New York Times quoted the Chamber of Commerce's top lobbyist, R. Bruce Josten, who cited the "chilling effect" of Target's situation last year, and said that the proposed executive order would force businesses to endure harassment and protests related to their political spending disclosure.

Josten's argument sounds like a rehash of the "free speech" argument at the core of Citizens United. But seriously, I'm not seeing anybody trying to force corporations not to use their free speech in this way. I think people are simply asking them to be honest and transparent about what they're really saying, rather than trying to keep it hush-hush.



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