Guest Column: Urging shareholders to vote money out of politics
By Leslie Samuelrich
President, Green Century Capital Management
and Dev Gowda
Advocate, Illinois PIRG (Public Interest Research Group)
Free speech in America just got a lot more expensive. The recent McCutcheon Supreme Court decision has widened the floodgates through which special interest money can now flow. This decision, coming on the heels of the corporate spending opened by Citizens United in 2010, will make it even more challenging for ordinary citizens and U.S. consumers to make their voices heard. These consumers, however, are also often shareholders, and are increasingly concerned that their investments are being used by companies to gamble in the political process and drown out the consumer voice.
That’s why next month, as companies hold their annual meetings across the country to showcase their achievements, they also will need to answer to shareholders whose funds have been spent on controversial public policy issues. Environmentally responsible investor Green Century Capital Management and consumer protection group U.S. PIRG are calling on Kraft Foods to stop spending shareholder funds to influence the outcome of political elections.
Companies that spend millions undermining key environmental and consumer protection initiatives risk alienating their consumer base and face significant brand and reputational risks.
In 2012, Kraft Foods was the fifth-largest contributor to “No on Prop 37” in California, which would have let consumers know if their food contained genetically modified organisms (GMOs). When more than 90 percent of U.S. consumers believe products that contain GMOs should be labeled,1 Kraft’s decision to spend millions blocking its customers’ ability to make informed food purchases seems to be a poor business decision. Kraft shareholders saw how the media depicted companies’ opposition to the initiative as anti-transparency and as preventing informed consumer choice, and are bringing a common-sense proposal for consideration to Kraft executives and shareholders.
There is reason to believe that shareholders’ concerns will be heard. The public overwhelmingly disapproves of corporate money in politics, with more than 80 percent of Americans across party lines agreeing that there is “too much money in politics,” according to a 2012 Bannon Communications poll.1 In this context, it follows that corporations that spend millions of dollars to influence politics face significant financial risks associated with taking on controversial policy positions that alienate their consumer base.
Just because the courts say that a company can spend unlimited amounts of dollars does not mean it should, and shareholders and the public have good cause to be concerned when companies do. Rather than spend millions of dollars drowning out the voice of their customers, Kraft should respect the old adage that the “customer is always right” and keep shareholder funds out of politics.
Leslie Samuelrich is the president of Green Century Capital Management. Founded in 1991 by the state Public Interest Research Groups (PIRGs), Green Century Capital Management is an investment advisory firm that manages two fossil fuel-free mutual funds.
Dev Gowda is the advocate for Illinois PIRG (Public Interest Research Group). The Public Interest Research Group is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.
From the May 7-13, 2014, issue