In January 2010, the United States Supreme Court issued a controversial decision in the case Citizens United

v. Federal Election Commission, allowing for unlimited spending by corporations and corporate interests in our local, state and national elections. As a result of this ruling, corporations and special interests poured more money into the 2010 midterm elections than almost any other election in U.S. history. Since Citizens United, an increasing number of companies have decided to strengthen disclosure of political spending, voluntarily limit their spending, and increase board oversight. However, many other companies have not embraced these reforms. Less than one-third of S&P 500 firms guarantee that their board has oversight responsibility for their company’s political spending. Even then, 90% of that board’s action is a post-hoc review of what management has done.1 With the 2012 presidential elections on the horizon, PACs, SuperPACs and corporations are preparing to devote millions of corporate dollars to influence voters. As you shop this holiday season, consider how the money you spend may promote corporate influence in the upcoming election. This guide provides information about corporate transparency and accountability in political spending, so you can be an informed consumer this holiday season.

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Methodology: The companies presented in this holiday shopping guide2 have been selected based on their rankings in the Baruch Index of Corporate Political Disclosure (“Baruch Index”) and the CPA-Zicklin Index of Corporate Political Accountability and Disclosure (“CPA Index”). Although the criteria for these indices vary, both examine the policies of S&P 100 companies according to their level of public disclosure and transparency with respect to political spending. The ten “low ranking” ( ) companies were selected because each scored between 0 and 20 (out of a possible 100) on both indices. The two “high-ranking” ( ) companies were selected because each scored above 80 (out of a possible 100) on both indices. With the exception of the credit card industry, companies that do not produce or sell holiday items or merchandise were excluded from this guide.
Heidi Welsh & Robin Young, IRRC Institute & Sustainable Investments Institute, Corporate Governance of Political Expenditures: 2011 Benchmark Report on S&P 500 Companies, 2011, pg 21-22 [hereinafter “IRRC/SI2 2011 Report”]. 2 This holiday shopping guide includes S&P 100 holding companies that oversee and manage subsidiary consumer-facing companies, if they otherwise meet the criteria for inclusion, as set out in the methodology.
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It is not just where and what you buy that supports corporate political spending, it is how you buy as well
Think About The Credit Cards You Use:
Financial companies are “among the least likely to have any board oversight” in political spending.3 U.S. Bancorp, the financial-services parent of U.S. Bank, received a “Top-Tier” CPA Index score of 84/100.4 The firm’s Political Contributions Policy mandates that all contributions be “made publicly available on its corporate website.” The report and policy are reviewed and approved by the firm’s board of directors.5 As a result of this reporting and oversight, the Baruch Index found this firm to be “Transparent” (rated 81-100), and confirms that U.S. Bancorp’s policies and reports are “prominent” and “easy to find” on its website.6 MasterCard, Inc. is one of the most recognized brands in the world; yet MasterCard discloses very little about the company’s political spending. In 2010, MasterCard spent more than $4.5 million on lobbying.7 Spending on elections is not disclosed and MasterCard’s Board does not provide oversight for its political spending.8 As a result, MasterCard received the lowest possible CPA Index ranking (0/100) and was labeled “Opaque” by the Baruch Index.9
IRRC/SI2 2011 Report, pg 22. Center for Political Accountability, The CPA-Zicklin Index of Corporate Political Accountability and Disclosure: How leading Companies Navigate Political Spending in the Wake of Citizens United, 2011, pg 11 [hereinafter “CPA Index 2011”]. 5 U.S. Bancorp, Corporate Governance, U.S. Bancorp Political Contributions Report: January-June 2011. Avaliable at: http://bit.ly/us-bancorp. Last accessed, Nov. 23, 2011. 6 Donna Schepers & Naomi Gardberg, Baruch Index of Corporate Political Disclosure: 2010 Results, http://www.baruch.cuny.edu/baruchindex/BIResults.pdf. Last accessed, Nov. 14, 2011 [hereinafter “Baruch Index 2010”]. 7 Center for Responsive Politics. Online at www.opensecrets.org. It is unclear exactly how much total political spending originates from corporate treasuries. However, company expenditures for direct federal lobbying are well regulated and disclosed. IRRC/SI2 2011 Report, pgs 3-4. In order to illustrate the existence of corporate political spending, this holiday guide includes lobbying figures from the Center for Responsive Politics. 8 IRRC/SI2 2011 Report, pg 51. 9 Baruch Index 2010; CPA Index 2011.
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Many stores carry the same products and brands, but their political spending to influence elections is different
Compare Political Spending Policies Among the Nation’s Largest Retail Stores:
Amazon.com, the world's largest online retailer, is one of only five companies in the top-revenue tier of the S&P 500 that has no published policy on political spending practices.10 Policies aside, the internet-retail giant is no stranger to political spending; in 2010, the company spent over $2 million on lobbying.11 The CPA Index gave Amazon.com a score of 0/100 and the Baruch Index labeled Amazon’s corporate political disclosure “Opaque.”12 Wal-Mart is the largest private employer and retailer in the world. Wal-Mart had more than $6.1 million in 2010 lobbying expenditures.13 It has received the lowest possible CPA Index rating on corporate political accountability and disclosure (0/100). Wal-Mart was also labeled “Opaque” by the Baruch Index.14 CVS Caremark Corp. is one of the nation's largest retail pharmacy chains, with over 7,000 stores across 41 states. In 2010, the company spent nearly $9 million on lobbying, significantly more than its major competitors.15 Information about corporate political activity is “hidden or hard to find,” on the CVS Caremark website.16 On its website, the company states that it “seeks to be an effective participant in the political process.”17 It ranks in the bottom tiers of both the CPA and Baruch indices.18
IRRC/SI2 2011 Report, pg 16. Center for Responsive Politics. Online at www.opensecrets.org 12 CPA Index 2011; Baruch Index 2010. 13 Center for Responsive Politics. Online at www.opensecrets.org 14 Baruch Index 2010; CPA Index 2011. 15 Center for Responsive Politics. Online at www.opensecrets.org 16 Baruch Index 2010. 17 CVS Caremark, corporate website: http://info.cvscaremark.com/ our-company/corporate-responsibility/corporategovernance/other-practices. Last accessed, Nov. 28, 2011. 18 Baruch Index 2010; CPA Index 2011.
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Costco was the second largest spender on ballot measures in the S&P 500 in 2010 (more than $4.8 million in 2010 expenditures) and is one of five companies in the S&P 500’s top-revenue tier with no published policy on political spending practices.19 Costco does not disclose, and the firm’s board does not oversee, its political spending.20 As a result of these practices, the wholesaler scored 0/100 on the CPA Index and was labeled “Opaque” by the Baruch Index.21 Lowe’s Companies, Inc., which netted $2 billion in earnings in 2010,22 received a score of 0/100 in the CPA Index for its lack of transparency and accountability measures. The Baruch Index also found Lowe’s to be one of the least transparent S&P 100 companies, labeling it “Opaque.”23 Walgreen Co. is rated “Opaque” by the Baruch Index, while its CPA Index rating of 16/100 landed it in the lowest tier, below nearly 80% of the S&P 100 companies surveyed.24 Walgreen Co. spent almost $1.4 million on lobbying in 2010.25

IRRC/SI2 2011 Report, pgs 16 and 49. IRRC/SI2 2011 Report, pg 49. 21 Baruch Index 2010; CPA Index 2011. 22 Lowe’s Corporate Facts, media.lowes.com/press_file.cfm?presskit_id=1. Last accessed Nov. 28, 2011. 23 Baruch Index 2010; CPA Index 2011. 24 Baruch Index 2010; CPA Index 2011. 25 Center for Responsive Politics. Online at www.opensecrets.org
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Know about companies’ transparency & accountability policies before you buy.
Technology: International Business Machines Corp (IBM) develops computer hardware and software and sells pre-owned personal computer products.26 The CPA Index awarded the firm a perfect political accountability and disclosure score (100/100).27 The Baruch Index found IBM’s corporate political disclosure to be “Transparent” (rated 81-100), and recognized IBM as a corporate leader with regard to the firm’s disclosure of policies, procedures, structures, amounts, and recipients.28 Phone Services: Sprint Nextel Corp. In May 2011, 53% of the company’s shareholders voted against management and demanded reporting and accounting of the company’s direct and indirect political contributions, as well as details on the company’s decision making processes for this giving. The vote represented the largest majority vote on a political disclosure proposal opposed by management in the past four years, and one of the largest majority votes ever on the issue. Sprint Nextel achieved the lowest possible score (0/100) in the CPA Index on political accountability and disclosure and was ranked “Opaque” by the Baruch Index of Corporate Political Disclosure.29

IBM Certified Pre-owned PCs: Laptops, Desktops, Monitors and More, http://www304.ibm.com/shop/americas/content/home/store_IBMPublicUSA/en_US/icpepcs.html?lnk=mhpr. Last accessed Nov. 28, 2011. 27 CPA Index 2011. 28 Baruch Index 2010. 29 Baruch Index 2010; CPA Index 2011.
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Consumer Goods & Apparel: Colgate-Palmolive Co. may not be a manufacturer of traditional stocking-stuffers, but you’ll likely find their products in your kitchen or bathroom this holiday season. Colgate-Palmolive, which produces and distributes a broad range of oral, home, personal, and pet-nutrition consumer products such as Colgate, Ajax, Irish Spring, and Science Diet, received a perfect accountability and disclosure score (100/100), according to the CPA index.30 The Baruch Index found the company to be “Transparent” (rated 81-100), and recognized Colgate-Palmolive as one of only six S&P 100 firms with “no corporate political contributions at state and federal levels.”31 Walt Disney Co. was a top spender ($1.4 million) on ballot measures in 2010, which is noteworthy, given the company’s lack of political-spending disclosure or board political-spending oversight.32 Disney also spent almost $3.9 million lobbying in 2010. The media conglomerate received a 0/100 score according to the CPA Index, and was considered “Opaque” by the Baruch Index,33 which noted that Walt Disney’s political contribution data is “hidden or hard to find” should a consumer attempt to search for such information on Disney’s website.34 NIKE, Inc. The sportswear and equipment supplier received the lowest possible CPA Index rating (0/100) and was also labeled “Opaque” by the Baruch Index.35 Nike, Inc. spent almost $500,000 lobbying in 2010.36 Berkshire Hathaway, which owns the Fruit of the Loom and Russell Athletic lines, was rated “Opaque” by the Baruch Index, and received the lowest possible CPA Index score (0/100).37 Billionaire Chairman & CEO Warren Buffett’s multinational conglomerate holding company is also one of only five top-revenuetier S&P 500 companies with no published policy on its political spending practices.38

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CPA Index 2011. Baruch Index 2010. 32 IRRC/SI2 2011 Report, pg 49. 33 Baruch Index 2010; CPA Index 2011. 34 Baruch Index 2010. 35 Baruch Index 2010; CPA Index 2011. 36 Center for Responsive Politics. Online at www.opensecrets.org 37 Baruch Index 2010; CPA Index 2011. 38 IRRC/SI2 2011 Report, pg 16.
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