Shareholders say “dark money” can corrupt democratic institutions without full transparency

May 29, 2020 News

– Call on ExxonMobil to provide more details on political, electoral contributions

By Kiana Wilburg

In acknowledgement of the fact that oil money can corrupt democratic institutions, shareholders have challenged ExxonMobil’s hierarchy to make more detailed disclosures on the company’s political and electoral contributions.
A proposal in this regard was proffered on Wednesday during ExxonMobil’s Annual Shareholders Meeting. Speaking on the proposal was Tim Brennan, Special Advisor on responsible investing at the Unitarian Universalist Association (UUA).

Tim Brennan, Special Advisor on responsible investing at Unitarian Universalist Association

ExxonMobil’s CEO and Chairman, Darren Woods

Brennan requested that the company report to shareholders on policies and procedures for making political contributions with corporate funds and on election related contributions and expenditures, including indirect funding of elections and trade associations. The Special Advisor said that one of the UUA’s seven principles calls for the upholding of the democratic process. In this regard, he said, “We are deeply concerned that excessive spending and dark money in elections can corrupt democratic institutions and undermine public trust, especially if it comes without full transparency. Furthermore, we believe that transparency and accountability and corporate spending to influence elections are in the best interest of shareholders.”
Expounding further, the shareholder noted that the Center for Political Accountability Zicklin Index, benchmarks the political disclosure and accountability policies and practices of leading U.S. public companies. With a middling score of 61 out of 100 in 2019, he said that Exxon showed some improvement but still scored poorly on disclosure of election spending that goes beyond the minimum mandated by law.
Brennan said that these payments are often referred to as “dark money” because the connection between the donor, that is, the company and the candidates is hidden from public view.
In addition to this, Brennan said that the Zicklin Index report reveals that Exxon does not disclose entire categories of payments intended to influence elections, such as independent expenditures, indirect contributions through trade associations and payments to so called social welfare organizations. The shareholder said that such admissions can make it appear that the company has something to hide.
Brennan also noted the fact that Exxon had argued that it is meeting the minimum legal standard which it believes is sufficient. In doing so, however, Brennan strongly contended

that the company is setting a very low bar for itself. The shareholder stressed that disclosing direct and indirect election related spending, as this proposal requests, would bring the company in line with a growing number of leading companies, including peers such as ConocoPhillips, Able Energy and Apache Corporation.
“If Exxon has nothing to hide, transparent disclosures should show that its election spending is being done in the company’s and shareholders’ best interest and is aligned with company values and public positions. This would protect its reputation and shareholder value,” Brennan stated. He then called for other shareholders to vote in favour of the proposal.
In response, ExxonMobil’s CEO, Darren Woods, said that the board agrees that transparency and accountability are important components of the company’s political spending. To date, he said that ExxonMobil has expanded the details of its oversight process as well as lobbying activity on its website. Woods said, too, that their site also discloses the company’s political activity guidelines, as well as multi-year contributions to candidates and political organizations.
“We fully comply with all disclosure requirements under Federal and state laws, which we believe are sufficient to ensure disclosures and transparency, and provide a consistent and equitable standard for all reporting entities,” the CEO stated.
Woods concluded that the company’s political contributions are subject to strict internal review processes, including approval by the Chairman and an annual review by the Board. For these reasons, he said that the Board recommended a vote against the proposal.

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