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DiNapoli: New York State Common Retirement Fund Reaches Agreements With Portfolio Companies on Political Spending

August 21, 2020

Three major U.S. companies have agreed to fully disclose their political spending under agreements reached with the New York State Common Retirement Fund (Fund), New York State Comptroller Thomas P. DiNapoli announced today.

Agreements were reached with: VF Corp., the maker of clothing lines such as The North Face and Timberland Simon Property Group Inc., the largest shopping mall operator in the United States; and Brown-Forman Corp., the maker of Jack Daniel’s whiskey. As a result, shareholder resolutions filed by the Fund with these companies were withdrawn.

“Lack of transparency and accountability on political spending may put companies’ reputations and profits at risk and can threaten long-term shareholder value. Investors should know if companies are using corporate funds for political purposes, especially now in an election year with bitter political divisions on display,” said DiNapoli, trustee of the Fund. “I commend VF, Simon Property Group and Brown-Forman for taking this step and encourage more companies to do the same. Public disclosure is always in the best interest of shareholders.”

Since the 2010 U.S. Supreme Court's Citizens United ruling striking down certain restraints on corporate political spending, DiNapoli has made it a priority to engage the Fund's portfolio companies urging disclosure of their political spending. The shareholder proposals filed by the Fund ask companies for comprehensive and public reports that list their corporate contributions to any campaign on behalf of (or in opposition to) any candidate for public office, or to influence the general public with respect to an election or referendum.

According to the report “Collision Course,” authored by the Center for Political Accountability on political action committee (PAC) spending, citing data gathered by the Center for Responsive Politics, companies are the “dominant source of political money.” PAC activity, though only one type of political money, provides a valuable indicator of the amount of influence applied by companies and other groups. Between the 2008 and 2018 federal election cycles, business PACs accounted for between 68.6 percent ($310 million in 2009-10) and 72.8 percent ($379 million in 2013-14) of all PAC spending in federal elections.

Companies are not required to disclose the full extent and nature of these expenditures. These agreements remedy this lack of transparency.

Shareholder proposals on political spending disclosure for the 2020 proxy season have been filed with:

  • VF Corp. – Withdrawn with agreement
  • Simon Property Group, Inc. – Withdrawn with agreement
  • The Brown-Forman Corporation – Withdrawn with agreement
  • Royal Caribbean Cruises Ltd. – Proposal received 32 percent support from shareholders
  • CMS Energy Corporation – Proposal received 34 percent support from shareholders
  • Duke Energy Corporation – Proposal received 39 percent support from shareholders

2019 Political Spending Proposals and Agreements:

  • The Kroger Co. – Withdrawn with agreement
  • Sysco Corp. – Withdrawn with agreement
  • Hilton Worldwide Holdings Inc. – Withdrawn with agreement
  • CMS Energy Corp. – Proposal received 34 percent support from shareholders
  • Wynn Resorts Limited – Proposal received 34 percent support from shareholders
  • Royal Caribbean Cruises Ltd. – Proposal received 34 percent support from shareholders
  • Duke Energy Corporation – Proposal received 36 percent support from shareholders
  • Simon Property Group, Inc. – Proposal received 37 percent support from shareholders
  • NextEra Energy, Inc. – Proposal received 49 percent support from shareholders

NYS Common Retirement Fund’s Political Spending and Lobbying Disclosure Engagement

Since 2010, the Fund has filed over 150 shareholder proposals on political spending and lobbying disclosures, and 45 companies have adopted or agreed to adopt such disclosure, including Bank of America Corp., Delta Airlines and PepsiCo Inc.

About the New York State Common Retirement Fund

The New York State Common Retirement Fund is the third largest public pension fund in the United States. The Fund holds and invests the assets of the New York State and Local Retirement System on behalf of more than one million state and local government employees and retirees and their beneficiaries. The Fund has consistently been ranked as one of the best managed and best funded plans in the nation.