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EXCLUSIVE: Shareholders Call On Companies To Disclose ALEC Ties

By Eli Clifton  

"EXCLUSIVE: Shareholders Call On Companies To Disclose ALEC Ties"

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The American Legislative Exchange Council (ALEC) faces a run on its membership as Kraft, Pepsi, Coca-Cola, Intuit, the Gates Foundation and, as of yesterday, McDonald’s broke ties with the conservative organization. While some companies are refusing to distance themselves from ALEC’s involvement in Voter ID legislation and support for the “stand your ground” laws that may play a pivotal role in the defense of Trayvon Martin’s shooter, newly released SEC documents show that shareholders are increasingly uncomfortable with their companies’ involvement in the conservative organization.

Newly filed SEC documents show that shareholders at five publicly traded companies are launching their own resolutions, to be voted on at upcoming annual meetings in May, calling on the companies to disclose their contributions to tax-exempt organizations, like ALEC, that write and endorse model legislation.

At the UPS annual meeting on May 3, in Wilmington, DE, shareholders will vote on a proposal calling on the board to “authorize the preparation of a report, updated annually” disclosing the companies legislative and lobbying activities. A supporting statement reads:

UPS spent approximately $14 million in 2009 and 2010 on direct federal lobbying activities, according to disclosure reports. (U.S. Senate Office of Public Records). In 2010, UPS also spent at least $384,279 in 4 states that require lobbying expenditure disclosure (according to state disclosure reports). These figures may not include grassroots lobbying to influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures to influence legislation or regulation. And UPS does not disclose contributions to tax-exempt organizations that write and endorse model legislation, such as the company’s $25,000 contribution to ALEC’s annual meeting (http://thinkprogress.org/politcs/2011/08/05/288823/alec-exposed-corporations-funding/).

Such expenditures and contributions can potentially involve the company in controversies posing reputational risks.

The UPS board urged shareholders to “vote AGAINST the proposal” because “UPS already has effective policies for the appropriate disclosure and oversight of the Company’s lobbying and political activities.”

According to SEC filings, nearly identical proposals — all citing ThinkProgress’s Aug. 2011 story — will come up for votes at the May annual meetings of the Altria Group, Union Pacific, Peabody Energy and Kraft Foods. All of the boards recommended that shareholders vote against the proposals.

Altria and Peabody both contributed at the “Chairman” level to ALEC, requiring a $50,000 contribution per year. UPS contributed $25,000 (“Vice Chairman” level) and Kraft and Union Pacific each contributed $5,000 (“Director” level).

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