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 The previously unreported move would make Wal-Mart the first
constituent of the Dow Jones Industrial Average to break out state
expenditures at that level of detail, drawing attention to spending
that in some states reaches hundreds of thousands of dollars.
Wal-Mart's move could chart a course for others, just as rival
retailers followed suit when it raised worker pay earlier this year.
While federal guidelines are uniform and fairly detailed, disclosure
at the state level varies widely and information can be difficult to
find, undermining attempts at oversight by outside groups. At the
same time, gridlock in Congress has shifted the focus of some
corporate lobbying to the states, raising the importance of
transparency, disclosure advocates said.
Wal-Mart's decision to make state lobbying information more
accessible is "exceedingly important" because spending at the state
level can rival or exceed federal lobbying expenditures and also
because of the company's size and influence across the corporate
sector, said Timothy Smith, director of socially responsible
investing at Walden Asset Management, which has backed several
shareholder proposals seeking improved disclosure.
Since the first shareholder proposals targeting lobbying first
appeared in 2011, there have been 143 resolutions on the ballots at
80 companies, and support has risen to an average of 29.2 percent of
votes this year, according to proxy adviser Institutional
Shareholder Services.
Wal-Mart's move falls short of what Zevin Asset Management sought
when it submitted a shareholder resolution for wider disclosure at
Wal-Mart, including any "indirect lobbying" through organizations
like the U.S. Chamber of Commerce. Wal-Mart will not change its
disclosure policies on trade associations, spokesman Randy Hargrove
said.
Zevin Director Sonia Kowal said she withdrew the proposal as a sign
of "good faith" after Wal-Mart agreed to aggregate state
disclosures. She said she would resubmit the proposal next year.
Kowal said she has found Wal-Mart to be responsive to shareholder
engagement "perhaps because they see disclosure of corporate
involvement in politics as being increasingly important to investors
and that interest is not likely to diminish."
Wal-Mart will not report any information not already available in
state disclosures. But within a few months it plans to start
providing a tally for spending in each state with a link to the
relevant filing, aiming to make it easier for investors to find the
information, Hargrove said.
"We take our commitment to provide additional transparency into our
political engagement seriously," Hargrove said, noting that Wal-Mart
already provides links to quarterly federal lobbying reports on its
website, among other steps.
BYZANTINE DISCLOSURE
The act of aggregating state data into a readable format is a
significant step because the "Byzantine" manner in which the data is
captured and made available online effectively buries information at
many states, said Denise Roth Barber, managing director at the
National Institute on Money in State Politics, which itself has
struggled to build a comprehensive database of state spending.
"Given the wide disparity of disclosure laws and how that
information is provided to the public it is nearly impossible to
find this information out on your own," she said, adding the move by
Wal-Mart could prod others to disclose more. "It would be impressive
for Wal-Mart to provide that information in one place."
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In 2014 Wal-Mart spent $7 million on lobbying at the federal level,
making it one of the largest corporate spenders. It was active in
targeting issues like labor, tax and trade, including the
Trans-Pacific Partnership trade pact being pushed by President
Barack Obama, public filings show.
The biggest corporate spenders include Comcast and Google at about
$17 billion each, according to the Center for Responsive Politics.
States such as California and Wisconsin require relatively detailed
disclosure including payments to lobbyists and what bills were
lobbied on. In several states like Georgia the reporting of lobbyist
compensation is not mandatory, meaning only typically smaller
outlays, such as dinners with legislators, are available. In some
cases figuring out what was spent can prove tricky, requiring
digging into reports from multiple lobbyists in formats decipherable
only to the trained eye.
Filings from California show Wal-Mart paid lobbyists $319,000 last
year to advocate on its behalf on various laws, including some tied
to wages and other labor issues. Spending in Texas, which only
requires the disclosure of a range, may have been as high as
$315,000, filings show.
While pleased with the move on state disclosure, Zevin's Kowal said
shareholders want greater transparency on all spending, including
trade associations and tax-exempt organizations writing model
legislation.
When Zevin submitted its proposal last year, it cited concerns over
Wal-Mart's involvement with the Chamber of Commerce in part because
the association had reportedly lobbied against the Foreign Corrupt
Practices Act.
Bruce Freed, president of the Center for Political Accountability,
believes that in general corporate disclosure on political spending
and lobbying has been improving. But he says the picture will remain
incomplete until contributions to organizations like the Chamber of
Commerce and social welfare groups exempt from reporting donors are
disclosed.
"In the end what you really are looking for are the spending figures
that are not disclosed, and that includes the major trade
associations," Freed said.
(Reporting by Nathan Layne. Editing by David Greising, Peter
Henderson and John Pickering)
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