A report published today criticizes companies that refuse to disclose information about their political spending on their websites.  The non-profit Center for Political Accountability and the Zicklin School at Wharton annually rank all companies in the S&P 500 on their political disclosure practices, based on a 70-point metric.  The more information companies disclose on their websites, the more points they get.  This year’s report marks the second consecutive year for which the CPA-Zicklin Index has surveyed the full S&P 500.

While these disclosures are not required by law, the CPA-Zicklin Index has found success over the years at using the Index as a tool to pressure companies to either disclose more information about their political expenditures or to cut-off the spending altogether.

This year’s Index is no different, finding incremental improvement over last year’s report.  According to the 2016 report, the average overall score rose slightly this year from 33.93% in 2015 to 36.73%.  Citing this regular year-over-year increase, the report emphasizes that it can be used to identify “persistent basement-dwellers, those companies lagging behind in taking reasonable steps to safeguard themselves and shareholders against the acknowledged risks posed by corporate spending on politics.”  As a result of the attention given to the issue by this year’s report, those companies may find themselves the targets of name-and-shame campaigns, adverse publicity, shareholder proposals, or even litigation.

But companies should not read too much into the trend towards increased disclosure.  Forty-nine companies still received a score of “zero,” and 152 companies received scores of 10% or less, down only slightly from 156 in 2015.  And some of the increase in the average score may simply be a result of low-scoring companies who were surveyed for the first time in 2015 deciding to move to the middle-of-the-pack.  Moreover, most companies still receive no credit in two key categories, both of which are primary CPA-Zicklin focus areas: Less than half disclose any information about trade association dues payments and less than a third disclose information related to contributions to so-called 501(c)(4) groups.

The report, perhaps unintentionally, also makes clear that corporate political disclosure is not a panacea to “dark money.” The Index repeatedly touts a “strong and growing trend among S&P 500 companies” towards increased disclosure and claims that disclosure “is becoming common practice.”  At the same time, the Index warns of a potentially record-breaking year for “dark money” spending and “long-term trends” documenting “sharply escalating dark money in politics.”  But the increase in political disclosure by major public companies strongly suggests that the increase in “dark money” spending is not coming from large multinational corporations.

Photo of Zachary G. Parks Zachary G. Parks

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside…

Zachary Parks advises corporations, trade associations, campaigns, and high-net worth individuals on their most important and challenging political law problems.

Chambers USA describes Zachary as “highly regarded by his clients in the political law arena,” noting that clients praised him as their “go-to outside attorney for election law, campaign finance, pay-to-play and PAC issues.” Zachary is also a leading lawyer in the emerging corporate political disclosure field, regularly advising corporations on these issues.

Zachary’s expertise includes the Federal Election Campaign Act, the Lobbying Disclosure Act, the Ethics in Government Act, the Foreign Agents Registration Act, and the Securities and Exchange Commission’s pay-to-play rules. He has also helped clients comply with the election and political laws of all 50 states. Zachary also frequently leads political law due diligence for investment firms and corporations during mergers and acquisitions.

He routinely advises corporations and corporate executives on instituting political law compliance programs and conducts compliance training for senior corporate executives and lobbyists. He also has extensive experience conducting corporate internal investigations concerning campaign finance and lobbying law compliance and has defended his political law clients in investigations by the Federal Election Commission, the U.S. Department of Justice, Congressional committees, and in litigation.

Zachary is also the founder and chair of the J. Reuben Clark Law Society’s Political and Election Law Section.

Zachary also has extensive complex litigation experience, having litigated major environmental claims, class actions, and multi-district proceedings for financial institutions, corporations, and public entities.

From 2005 to 2006, Zachary was a law clerk for Judge Thomas B. Griffith on the United States Court of Appeals for the District of Columbia.

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