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The Disclosure Police Target Walmart

3:38 PM, Jun 5, 2014 • By MICHAEL WARREN
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Poor Walmart. The Arkansas-based retail giant just can’t catch a break. On Wednesday, employees began striking across the country, demanding higher wages. The move is the latest in a long-standing battle between the company and labor interests. And on Friday, labor’s allies in the world of activist investment are hoping to open up another front by convincing Walmart to disclose its membership with trade groups.

Walmart

On June 6, Walmart shareholders will convene on the campus of the University of Arkansas for their annual meeting. As they do with publicly traded companies across the country, activist shareholders will be there as well to propose an innocuous-sounding “request for annual report on lobbying.” The proposal, if adopted by the shareholders, will require Walmart’s board to produce a report disclosing the money it spends on “direct or indirect lobbying” or “grassroots lobbying communications” as well as any of Walmart’s membership in tax-exempt organizations. The activists say they simply want “transparency and accountability”--and who can argue with that? No true shareholder-minded company would oppose such a proposal, right?

Walmart’s response urging shareholders to vote against the proposal is almost desperate. “Walmart already discloses information about its lobbying activities and procedures … as required by existing law, regulations, and Walmart policies,” it reads. The subtext: What more do you disclosure people want?

A lot more, as it turns out. Shareholder proposals like the one before Walmart aren’t intended simply to create transparency. The goal is to snuff out corporate political spending completely—to candidates, campaigns, and especially civic and trade organizations that engage in political activity. That’s the argument in a new paper from the Center for Competitive Politics, a think tank founded by a former commissioner of the Federal Elections Commission that says it works to “promote and defend First Amendment rights to free political speech, assembly and petition.” 

The CCP’s paper highlights a focused campaign by an alliance of activists, progressive lawyers, labor unions, socially- and environmentally-conscious investment funds, and left-wing media to push corporations to disclose their political spending and, ultimately, abandon all or most of that spending entirely. Take it from one of the activists himself. During an online seminar with like-minded activists earlier this year, Tim Smith of Walden Asset Management pointed out how efforts to get more disclosure from companies has encouraged those companies to drop their support for the American Legislative Exchange Council, which advocates for pro-business and conservative causes. Here’s Smith:

Of the companies receiving lobbying proposals, 22 of those companies have a reference in their resolution to the companies' involvement with ALEC. ALEC has most notably, recently teamed up with the Heartland Institute, a climate denying group, to call for a cessation of work done at the state level to support renewable energy. And as a result, there has been a strong pushback by investors for companies that are supporters of ALEC. It is my pleasure to report that over 80 companies have withdrawn, cut their ties, no more funding to ALEC—very prominent companies all the way from WalMart to GlaxoSmithKline. So that pressure will continue on companies that are supporters of ALEC.  So the lobbying and political spending resolutions go from general disclosure all the way to some very specific asks for companies to dig deep and look at what their trade association, or relations to groups like ALEC mean.

At the heart of the movement is the Center for Political Accountability and its founder, Bruce Freed. (Read more about Freed in a May 2013 article in THE WEEKLY STANDARD.)

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