Today, the Center for Political Accountability (CPA), a non-partisan group working to create transparency and accountability with corporate political spending, announced that they are leading a nationwide shareholder initiative to address the lack of disclosure of certain kinds of political giving by banks receiving TARP money.
The initiative, supported by 23 shareholder advocates, is calling on 19 companies that received more than $1 billion in TARP funds to disclose and require board oversight of their political spending with corporate funds. Only three financial groups — Prudential Financial Services, American Express and Capital One — have agreed to do so. Bruce Freed, CPA’s executive director, said that, as a matter of course, banks should be open and above board with their political spending. This is especially true now that they have received huge amounts of bailout funds from the government. Unfortunately, many have resisted. “A safe and sound financial system must be based on transparency and accountability,” he said.
The CPA-lead initiative sent each bank a letter calling for disclosure of political spending (including soft money contributions and payments to trade associations and other tax exempt groups used for political purposes) to help rebuild shareholder and public trust in financial services institutions. Unfortunately, the banking industry has lagged behind other industries in adopting disclosure. As of mid February, CPA reports, more than 52 leading U.S. public companies, including more than one-third in the S&P 100, have disclosed political giving, including Merck, Dell, General Electric, Pfizer, Hewlett Packard, FirstEnergy, Procter & Gamble and Aetna.
The initiative sent letters to the following institutions: Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, PNC Financial Services, Regions Financial Corp, SunTrust Banks, Fifth Third Bancorp, BB&T, Bank of New York Mellon, KeyCorp, CIT Group, Comerica, State Street, Marshall & Ilsley, Northern Trust, Zions Bancorporation and Huntington Bancshares.
It’s outrageous that the Congress didn’t include a provision in the Emergency Economic Stabilization Act passed last fall that would require disclosure of this type of political spending. And it’s doubly outrageous that the banks are refusing to disclose as due course of receiving public funds.