“The Center for Political Accountability (CPA)…founded in 2003, is in fact a recipient of hundreds of thousands of dollars from George Soros’s Open Society Institute.” Kimberly A. Strassel, The Wall Street Journal, June 1, 2012, p. A11
“Said to be the world’s thirty-eighth richest man, George Soros possesses about $7 billion in net worth, $11 billion in investments, and his foundations disperse more than $400 million a year for a variety of causes ranging from euthanasia and abortion to legalization of recreational drugs and Left-wing political power building. His political philosophy is drawn from some rather balmy ideas about ‘open society’ expressed by Karl Popper, under whom Soros studied in 1948 at the notorious left-wing London School of Economics. For Professor Popper, an atheist, nothing was ‘self-evident. Drawing on Popper’s teaching, Soros concluded that the U.S. Declaration of Independence, rather than based on so-called ‘self-evident truths,’ is but a statement of ‘our imperfect understanding’ of the world around us. Hence, America’s founding documents are disposable in what Soros believes is our godless society.” Robert Chandler, Shadow World, p. 339
The outfits warning companies about the risk of political contributions are themselves the source of the risk.
Kimberly A. Strassel, The Wall Street Journal, June 1, 2012, p. A11
Chances are, you’ve never heard from Bruce Freed. That’s because the founder of the Center for Political Accountability (CPA) is far busier ensuring you never hear from corporate America.
At least not when it comes to political free speech. In the growing liberal war against corporate free speech, its highest-grade weapon these days is “transparency.” By pushing disclosure, the left can tee up companies for activist boycotts, protests and other actions designed to make political engagement as painful as possible. Think of this not as disclosure in the name of voter education, but disclosure in the name of mugging.
Cue Mr. Freed’s outfit. While the White House and Democratic politicians have been writing their own proposals to force corporate tell-alls, CPA has taken the lead on the boardroom side. The group’s particular mission is ginning up shareholder resolutions that demand more corporate political disclosure. Thanks to it and a handful of activist allies, the number of such political spending proposals was up 50% this year among Fortune 200 companies, accounting for 21% of all the shareholder proxies.
The center’s particular skill is in presenting itself as nothing more than a selfless advocate of “good governance.” Mr. Freed roams the corporate halls, lecturing one and all on the need for “responsible” political spending and warning of the “risk” that companies face by not instituting “board oversight” of its political dollars. “Risk” is the kind of word that grabs CEO attention.
Mr. Freed has also been busy creating the facade of a movement. To listen to CPA, there is a groundswell of support among institutional investors for corporate political disclosure. This in turn, CPA insists, has resulted in a rush by companies to get on board with best practices. Everybody is doing it, goes the center’s line, and those who don’t are bad actors.
Some companies are buying this, with little investigation into CPA or its motives. While pitching itself as just another campaign-finance watchdog, the center, founded in 2003, is in fact a recipient of hundreds of thousands of dollars from George Soros’s Open Society Institute.
Mr. Freed worked for years for Capitol Hill Democrats, and most of the center’s staff hails from the liberal-party machine. Its attorney, Karl Sandstrom, once served as general counsel for the Democratic National Committee. Chief financial officer Michael Novelli was in 2008 an Obama campaign director for Maryland. Peter Hardin, one of CPA’s writers and editors, moonlights for another Soros-funded operation, Justice at Stake.
If you dig into the proxy proposals, you’ll find that most have been pushed by the same three or four groups, including CPA and activist investor groups like NorthStar Asset Management, Trillium and Walden Asset Management. Those voting for the proposals are also the usual suspects, such as union pension funds. Not one of the proxies passed this year.
As for “transparency,” the CEO world has mostly been played for dupes. The CPA tactic is to invite companies to voluntarily adopt some greater disclosure and avoid a proxy fight. The group then touts these concessions to other companies, to gull the same result.
Mr. Freed also likes to reference the “Zicklin Index,” which scores companies on their political disclosure. This index ostensibly comes from the Zicklin Center at the Wharton School of Business. Less known is that Messrs. Freed and Sandstrom both sit on Zicklin’s advisory board and helped create the ranking.
In a conversation, Mr. Freed repeated that his group is only interested in “good corporate governance.” He says that while he works with other activist groups, it doesn’t mean CPA “agrees with everything they do.” He also insists that his group has never “challenged” a company’s “right” to give political money.
Then again, the great ruse of this campaign is that the very organizations that claim to want to help corporate America manage its “risk” are themselves the source of the risk.
In a conference call earlier this year that included CPA, Walden, a member of Afscme (the union giant) and others, Christine Jantz of NorthStar acknowledged that her group wanted to highlight “ill-considered” contributions like those to politicians who are “actively working” against gay rights. It was exactly that kind of highlighting that facilitated the liberal protest and boycott against Target Corp., for donating to a Minnesota Republican gubernatorial candidate in 2010.
Having made direct contributions a liability, the groups can concentrate efforts on “disclosure” to third-party trade groups like the Chamber of Commerce. While Mr. Freed claims to believe in a company’s right to donate, he nonetheless had this advice in a piece he wrote for a Conference Board publication this winter: “There is no substitute for a clear policy of not giving money to third-party groups for purposes of political spending.”
CPA and other groups understand that if companies are too wary to contribute directly, but also see “risk” in giving to a trade group, they truly will have lost any free-speech rights. Now all that’s left is for corporate America to catch on to this double-game.
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A version of this article appeared June 1, 2012, on page A11 in the U.S. edition of The Wall Street Journal, with the headline: The Corporate Disclosure Ruse.