Paul Hodgson: How an SRI firm is working with Walmart on lobbying disclosure

Zevin Asset Management is getting retailer to raise its game

Zevin Asset Management, the SRI specialist, recently withdrew its lobbying disclosure proposals at Walmart and CenterPoint after coming to an agreement with each firm. Retailer Walmart has agreed to post its federal lobbying totals annually.
Power company CenterPoint has agreed to a number of initiatives: to summarize its lobbying policy and oversight procedures; to disclose its membership in named trade associations and 501( c ) (4) organisations above a $50,000 threshold. 501( c ) (4)s are named after the paragraph of the US tax code that governs them, they are limited tax exempt organisations that can engage in lobbying as long as this is not their primary purpose. CenterPoint will also link to its federal lobbying reports through (impossible to navigate) government websites.
The withdrawal comes on the heels of a similar resolution filed at CenterPoint by Zevin last year. This received the support of 44% of shareholders; a result that “surprised” the company, which then indicated that it would think about making the disclosures. A call with the company at the end of the summer last year did not result in any progress, nor did an e-mail in December, so Zevin refiled the resolution. However, in order to get the proposal off the ballot, CenterPoint agreed to the disclosures and the resolution was withdrawn.
It is also not the first time that Zevin has engaged Walmart on lobbying disclosures. Last year, it also withdrew a resolution at Walmart after it took the precedent of disclosing the amounts it spends on lobbying state by state, making it the first company in the US to do so. Many companies make disclosures surrounding federal level lobbying expenditures, and, in fact, this put Walmart for a time, until the latest concession, in the unusual position of disclosing more data on lobbying spending at the state level than it did at the federal level.

The disclosures surrounding state spending by Walmart are worth a closer look. A report posted on the investor page of Walmart’s website lists amounts that are required to be disclosed by individual state. Note that Walmart does not disclose what it actually spends state by state but simply what it is required to disclose according to the regulations currently in place in each state. This produces some very odd disclosures, as we shall see.In addition, up until the most recent concession, Walmart also provided links to Congressional and Senate databases recording federal lobbying expenditures, in the same way that CenterPoint has agreed to. As we have said, these sites are opaque. It is much easier to go to the Center for Responsive Politics website and search there, as staff have done all the grunt work of collation.
Sonia Kowal, President at Zevin, said of last year’s concession: “Walmart did not want the resolution on the ballot and so was amenable to a compromise in exchange for a withdrawal. We were surprised that the compromise they chose was to disclose their state by state lobbying payments.” While it has now decided to disclose its federal expenditures too, it is still resistant to disclosing trade association payments. Kowal surmised that the company’s reasoning behind not disclosing trade association spending was because it did not want to make public such payments because of fears competitors might see that the store was getting into other areas of sales and products. She added that state level lobbying was likely “dwarfed by indirect trade association and perhaps even grassroots lobbying at lower levels such as spending on persuading towns to allow new Walmart stores to be opened there.”
So now let us look at the limits to the extent of Walmart’s disclosures. Twenty-three states, for example, do not require lobbying payments to be disclosed, so spending recorded for them is not representative of actual amounts. Walmart recorded that it spent $14.32 [no, that is not a misplaced decimal point], or the equivalent of about £10 or €13, in Georgia and West Virginia, two of the states that don’t require the disclosures. The largest amounts recorded were in California ($319,000) and Maryland ($274,000), states where disclosure regulations are relatively robust.
Zevin was also in dialogue, both in person and by phone, with Walt Disney about increasing its lobbying disclosures – again as a result of filing a shareholder resolution – but Kowal said that the company was intransigent and that the resolution would go to a vote on March 3 (today). “Disney is very opposed to trade association disclosures,” she added.
With this being an election year, it is likely that there will be yet more proposals on both the issue of lobbying disclosures and on the disclosure of political contributions, it is also likely that support for them among shareholders will rise.