For 2024, more than 30 shareholder proposals have been filed asking for lobbying disclosure reports that include federal and state lobbying amounts, payments to trade associations and 501(c)(4) social welfare groups used for lobbying and payments to tax-exempt organizations that write and endorse model legislation.

State Lobbying Disclosure “Black Hole”

A new study found almost no major U.S. companies provide their investors with state lobbying disclosure, with 98 percent of the S&P 500 failing to disclose state-specific lobbying totals to shareholders. While federal lobbying data are easy to find, company disclosure of state lobbying remains a key need for investors as the data are scattered among a byzantine system of different disclosure regimes.

Senators Ask SEC to Mandate Lobbying Disclosure

The investor demand for lobbying disclosure recently attracted political support, with Senate Banking Committee Democrats writing a letter to the SEC urging it to issue a rulemaking to require companies to disclose their lobbying to shareholders. The senators noted that investors are largely kept in the dark regarding the policy campaigns they are indirectly funding.

Unlimited Undisclosed Spending Presents Risk

In addition to state spending, investors often face a blind regarding third-party lobbying. Undisclosed, unlimited company payments to trade associations and social welfare groups present risks, including reputational damage for lobbying that contradicts company positions and financial fines and regulatory sanctions for illegal payments. FirstEnergy was fined $230 million for funneling $60 million through a social welfare group in an Ohio bribery scandal that also resulted in indictments of company executives.

Train Safety under the Microscope

Norfolk Southern’s lobbying in Ohio has come under scrutiny after the train accident in East Palestine. A recent report found its federal lobbying spending increased 30 percent in the year since the accident. Investors are left wondering whether lobbying against safety rules has been in the company’s best interest.

Ongoing Demand for Tech Companies to Disclose

Investors refiled proposals at Alphabet, Amazon and Meta, which together list more than 1,000 trade associations, social welfare groups and non-profits receiving support but fail to disclose their payments and amounts used for lobbying to controversial groups like the Federalist Society attacking environmental, social and governance investing, the climate denialist think tank Competitive Enterprise Institute and the "anti-trans fear mongering" Independent Women’s Forum.

2024 Lobbying Disclosure Campaign – Misalignments Abound

In addition to dark money risks, lobbying misalignments remain a concern for investors when company lobbying contradicts company public positions. The 2024 proposals highlight lobbying misalignments on issues including climate, workers’ rights, rail safety, drug pricing, corporate taxation, antitrust, public health and voting rights. Banks, manufacturing, pharmaceutical, tech, telecom and utilities are among the industries receiving proposals.

John Keenan
Corporate Governance Analyst, AFSCME Capital Strategies