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Nathan Newman on March 2, 2006 - 3:40pm
Unions members have an established right to get a refund on the portion of their union dues devoted to politics. Yet shareholders have no right for a refund for corporate spending on politics. A bill in California is seeking to rectify this double standard by requiring corporations to list political contributions made in California and allow shareholders to receive back the pro rata share of that spending if they demand it. The bill, SB 1354, is sponsored by state Sen. Joe Dunn (D-Orange County), who argues, "We're looking for fairness in how corporations and unions handle political donations." But the bill would also help shareholders end corporate secrecy over such political spending, which often conceals a host of other management misuse of shareholder money. As a report by the Center for Political Accountability detailed last year, political giving by companies like Enron, WorldCom, and Global Crossing "were part of a pattern of risky and sometimes illegal behavior that ultimately sank the companies and cost shareholders hundreds of billions of dollars." More transparency in political contributions by corporations would alert shareholders to companies that use political fixes to cover up fundamental problems in their business operations. In the ideal, representatives of shareholders like mutual funds would be pushing transparency themselves, but as a report by Common Cause detailed. mutual fund leaderships systematically refuse to vote for shareholder resolutions demanding disclosure of political contributions by corporations. So it's left up to our government representatives to assure that political giving by corporations is transparent and that shareholders have the right to opt out and get their money back from political giving with which they disagree.