Shareholders at some of the nation’s top companies–including International Business Machines Corp. and PepsiCo, Inc– are questioning their firms’ involvement in efforts by the U.S. Chamber of Commerce to change U.S. foreign bribery laws.
In shareholder resolutions filed Friday, a group of socially-conscious investors asked the companies to review their roles at the lobbying powerhouse.
The group asked: Should businesses with strong codes of ethics serve on the board of an organization that is attempting to rewrite anti-corruption laws and is engaged in partisan battles?
The Chamber allocated about $50 million in the 2010 elections to unseat candidates who voted for healthcare reform and others. As Just Anti-Corruption first reported, the Chamber recently ramped up its lobbying efforts to tighten the Foreign Corrupt Practices Act.
The investors pointed to those efforts and asked IBM, Pepsi and others to more closely monitor how their money is spent.
“The Chamber recently has been an advocate of weakening the [FCPA] that addresses accounting transparency and concerns related to bribery of foreign officials,” the group of investors, led by the Boston-based Walden Asset Management, said. “It is difficult to see how these positions are good for IBM or business generally.”
In an interview last week, Timothy Smith, who heads shareholder engagement at Walden, said that position is at odds with the company’s corporate history. ”From 25 years ago, IBM had a very strong policy on bribery and people would be fired if they tried,” he said.
Smith said he sees a disconnect between company policies and the Chamber position. “Their position is strongly stated by top executives in the board. Now, at the same time, the Chamber is trying to lobby to reduce the impact,” he said.
IBM agreed to pay $10 million last month to settle charges that it bribed government officials in China and South Korea with cash and gifts in exchange for computer contracts, in violation of the FCPA.
Officials from IBM and Pepsi did not immediately respond to requests for comment.
Religious investors, pension funds, and others often submit shareholder resolutions challenging business practices. A group of nuns, for example, challenged executive pay policies at Goldman Sachs Group, Inc. earlier this month.
But the new resolutions targeting companies for their Chamber activities may be among the first to mention the FCPA.
The investors asked the companies to provide information about whether their boards and senior managers monitor the political activities of the trade associations they belong to.
The group also asked the companies to evaluate possible risk to their reputations and assess whether campaigns by the Chamber and others conflict with the companies’ corporate responsibility policies.
Pfizer Inc. also recently reviewed its policies after receiving a resolution challenging its role in trade associations, Smith said, and implemented a new prohibition on the use of corporate money for political spending.