Amid intensifying shareholder pressure on companies to be more transparent about their political spending, Goldman Sachs has moved to prevent its shareholders from voting to force executives to disclose their efforts to influence politicians, according to corporate documents reviewed by International Business Times. The banking behemoth, which has been boosted by taxpayer-financed bailouts and has landed former executives in key government jobs, asked federal regulators to bless its attempt to block the initiative in a letter sent to the Securities and Exchange Commission an agency now chaired by a former outside attorney for Goldman Sachs whose spouse also worked at the bank.
Goldmans request to the SEC comes in response to shareholders proposed resolution to require the bank to release an annual report documenting the policies governing the companys lobbying, and disclosing all payments made by the company for direct and indirect lobbying of public officials.
Between 2010 and 2016, Goldman has spent more than $26 million on federal lobbying, on top of what it spent at the state level where disclosure is uneven or absent, wrote the Unitarian Universalist Association (UUA), which represents more than 1,000 religious organizations and has spearheaded the resolution. The group also said the bank does not comprehensively disclose its memberships in and payments to powerful lobbying groups -- even as at least one of those groups has lobbied the National Economic Council headed by former Goldman president Gary Cohn.
We are concerned that Goldman's lack of lobbying disclosure presents significant reputational risks, wrote UUA in its November 2017 statement justifying the resolution. Absent a system of accountability, company assets could be used for objectives contrary to Goldman's long-term interests.
On December 28, Goldman Managing Director Beverly OToole sent a letter to the SEC telling regulators that it planned to bar the resolution from appearing on its annual proxy statement -- a move that would prevent other Goldman shareholders from voting on the initiative. In asking the SEC to approve such a move, the bank argued that the company already discloses much of its lobbying. It also asserted that the initiative relates to lobbying expenditures that total less than 0.2 percent of the companys annual revenues -- or less than $15 million.
The company's lobbying expenditures are not significant, OToole asserted. While the company engages in certain lobbying activities, primarily policy advocacy at the U.S. federal level, that it feels may be in the best interests of the Company its clients and shareholders, the company is not a lobbying firm, and its ultimate responsibilities to its clients and its shareholders are to continue to innovate and operate regardless of the result of any particular lobbying effort.
Citing an SEC rule governing what can and cannot be excluded from shareholder proxy statements, OToole concluded that the small amount of expenditures, broadly defined, related to such (lobbying) activities underscores the lack of significance to the company when considered as compare to the standard in the rule.
Goldman currently has policies in place that limit campaign contributions to an employee-funded Political Action Committee (PAC), according to a 2017 report on corporate political disclosures from the Center for Political Accountability and the Wharton School of Business. The reports authors also note that Goldman prohibited trade associations and 501(c)(4) nonprofits from using the companys payments on election spending. These rules, however, cover contributions to candidates and committees, not money spent on lobbying.