The pro-business U.S. Chamber of Commerce is running a high-profile campaign to weaken the Foreign Corrupt Practices Act. But not everyone in the business world is happy about that.
Walden Asset Management — a division of Boston Trust & Investment Management Company — recently said IBM’s role in supporting the Chamber of Commerce is inconsistent with good corporate citizenship.
Walden said it was speaking for itself and “23 co-filers which include other investment firms, foundations, faith-based investors and Roman Catholic Health systems.” It said IBM supports the Chamber of Commerce financially and through membership on its board. And the Chamber, it said, is campaigning against environmental regulation, healthcare reform, and the Foreign Corrupt Practices Act.
IBM paid $10 million in March to settle civil FCPA charges brought by the SEC for FCPA violations in Korea and China. The company used phony training trips to make illegal payments to government officials, the SEC said, and more than 100 IBM employees in China were involved in the offenses there.
Last year, in a paper co-written by a former Enron prosecutor, the Chamber proposed creating a so-called “good-faith” defense for FCPA violations, limiting the application of respondeat superior, trimming back successor liability for acquiring companies, and narrowing the definition of “foreign official.”
The Chamber hired former U.S. Attorney General Michael Mukasey last month to lobby Congress to amend the FCPA. Harold Kim of the Chamber’s Institute for Legal Reform told Reuters, “We plan on working with him closely where he can provide us strategic guidance for reforms to the FCPA statute. (It) is ripe for some reform.”
Walden describes itself as “a leader in socially responsive investing since 1975.” It said the Chamber’s position on various issues has already caused some companies to pull support, including Nike, Apple, Exelon, and PG&E.
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In its opposition to IBM’s role in the Chamber of Commerce, Walden Asset Management said,
Moreover, the Chamber’s activities are aggressively partisan. The Chamber reportedly allocated over $50 million in the 2010 elections to unseat candidates who voted for healthcare reform and supported other positions it opposes. In addition, the Chamber recently has been an advocate of weakening the Foreign Corrupt Practices Act that addresses accounting transparency and concerns related to bribery of foreign officials.
In November the Chamber announced an initiative to raise millions of dollars from its members to start a new anti-regulatory campaign. The initiative focuses on weakening, delaying or defeating new laws and regulations, such as those promulgated by the EPA to regulate greenhouse gases and the recently created Consumer Financial Protection Bureau.
It is difficult to see how these positions are good for IBM or business generally, yet the Chamber goes to great lengths in public presentations and before the U.S. Congress to assert that it speaks for the business community. Furthermore, many of IBM’s positions are at stark variance with the Chamber’s current path.
Several major companies took a hard look at this misalignment and subsequently withdrew from the Board of Directors or left the Chamber altogether. In recent years, Nike withdrew as a Board member and Apple, Exelon and PG&E, among others, ended their membership over its climate change position and activities. Other companies have stated publicly that the Chamber does not speak for them on specific critical issues, or, like IBM, declared that their dues cannot be used for lobbying or political spending purposes. One Chamber Board member, Duke Energy, has stated candidly that it has reviewed Chamber membership several times in recent years. Having decided to remain a member, Duke Energy is committed to communicate its concerns about key positions of the Chamber to encourage better alignment between the two organizations.
View Walden Asset Management’s Shareholder Rebuttal to the International Business Machines Opposition Statement Regarding Political Contribution Policy (page 74 in the IBM proxy) here.
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