A shareholder resolution at MAXIMUS, an outsourcing company that provides business process services to government health and human services agencies, calls for comprehensive disclosures of lobbying activities.
Union-linked pension fund representative CtW Investment Group will present a resolution calling for the disclosure at MAXIMUS’s annual meeting tomorrow (March 17).
MAXIMUS is a healthcare services company that contracts with federal and local governments on Medicaid and Medicare operations. CtW said that the Council of Institutional Investors has pledged support for the proposal.
The proposal calls for the company to disclose: its policies and procedures regarding lobbying, all lobbying payments, membership of lobbying groups, such as ALEC, and payments to them as well as a description of board oversight of such payments.
A letter accompanying the resolution details some of the lobbying payments the group has been able to identify, including: “Between 2010 and 2018, MAXIMUS has spent over $4.6 million on federal lobbying. As recently as 2014, MAXIMUS also lobbied in 33 states which have a complex array of cumbersome, delayed, or even absent mechanisms through which such lobbying expenses are disclosed.” State spending, from 2011-2018, included $1.9 million lobbying in New York, and between $1.4 million and $2.6 million in Texas.
The letter also says that the company is “already grappling with multiple allegations of misclassifying workers, failing to provide adequate health benefits, and interfering with legally protected employee activity”. Further risk incurred by failing to disclose its lobbying expenditures “seems unwarranted”, it says. MAXIMUS is also engaged in foreign lobbying, such as its efforts to obtain contracts in the UK for Work Capability Assessments contracts, which test disabled persons applying for benefits.
In an email to RI, Richard Clayton, Research Director at CtW, stressed the special importance of the resolution at companies like MAXIMUS with heavy public contracting: “Public contractors like MAXIMUS are especially vulnerable to reputational risks. MAXIMUS has already drawn critical attention, especially for its attempts to put a thumb on the scale in healthcare services policy. That’s why it’s crucial for shareholders to know how MAXIMUS is spending millions in lobbying and whether it participates in trade association lobbying.” In theory, public contractors are especially vulnerable to having reputational risk translate into lost business, since elected officials will be especially sensitive to those risks.
The letter focuses on peer disclosures of political and trade association spending taken from the CPA-Zicklin index [Center for Political Accountability] because it is difficult, if not impossible, to find comprehensive data on lobbying disclosure. However, two areas covered by the resolution – business association dues and contributions to tax-exempt organizations are included in the CPA-Zicklin index figures. These show that many of MAXIMUS’ peers, companies that are competing for business with the same government departments, are already making these disclosures.
In its statement of opposition to the resolution, MAXIMUS says that the disclosures will put it at a competitive disadvantage to its rivals unless they also make the disclosures. The company also makes the argument that its lobbying is already disclosed by law.