Last week Qualcomm and New York State’s Comptroller, Thomas DiNapoli, announced that Qualcomm will begin posting its political spending on its website. In exchange, the NY Comptroller has agreed to drop the lawsuit it filed against the company.
As described here, last month the NY Comptroller sued Qualcomm on behalf of the state’s pension fund, which owns about $378 million in Qualcomm stock, seeking access to the company’s records so it can determine how Qualcomm spends corporate funds on political activity.
In connection with the settlement announcement, Qualcomm released a new Political Contributions and Expenditures Policy governing the company’s use of corporate funds for political expenditures. Under the new policy, Qualcomm will disclose its political activities on its website. The categories of information it plans to post online include:
- Corporate contributions made to political candidates or committees, and ballot measure
- Contributions made by the company’s PAC
- Independent expenditures made by the company (if and when it decides to change its policy that it will not fund independent expenditures)
- Certain payments made to trade associations and social welfare organizations
While these disclosure obligations are very similar to those adopted by other large corporations over the last few years, other aspects of Qualcomm’s policy go further. For instance, under the policy, each of the following senior officers must approve in writing all political expenditures: CEO, President, CFO, Senior Vice President of Government Affairs, and a Vice President or above in the Corporate Legal Department. This requirement is particularly striking because the definition of “political expenditures” is not limited to political contributions made by the company or PAC, but broadly includes all payments used in connection with any political campaign or ballot measure, including payments made to other businesses, advocacy organizations, and even educational groups.
The Comptroller’s announcement of the settlement contains a statement from a prominent watchdog group that “Qualcomm will become a standard bearer for corporations looking to provide stockholders with transparency with respect to its political spending.” This may portend additional pressure on companies that may have thought their recent adoption of policies in this area put the issue behind them. Indeed, Institutional Shareholder Services reports that it is tracking more than 110 stockholder proposals on this subject. And last week Commissioner Luis A. Aguilar of the Securities and Exchange Commission voiced support for a petition calling on the SEC to use the existing proxy-disclosure regime to provide investors with information about political spending.