The New York State Common Retirement Fund has withdrawn a lawsuit against Qualcomm upon news that the company agreed to revise its political spending disclosure policy. The lawsuit had demanded, on behalf of shareholders, that the company open its books for a public review of such spending.
Among the matters addressed by the company in the updated policy:
All political expenditures made with company funds or resources must promote the interests of the Company, and be made without regard for the personal political preferences of company officers or executives.
Political expenditures must be expressly authorized in writing by the company's CEO, CFO, senior vice president of government affairs, and a vice President or above in the Corporate Legal Department.
The Governance Committee of the company's Board of Directors, consisting solely of independent directors, is responsible for overseeing political activity and contributions, including political expenditures to trade associations or other organizations. The committee will issue an annual report on such spending that will be available, an archived, online.
Information regarding the Company's federal lobbying activities is publicly reported and available on the websites of the U.S. Senate and U.S. House of Representatives.
The company will post to its website, updated at least twice a year, all monetary and non-monetary corporate contributions to political candidates and political parties, including recipient names and amounts given. It will also post to its website all dues paid to trade associations totaling $25,000 or more annually. It will disclose if any trade association payment made through its Government Affairs department was designated by the company, or solicited by the trade association, to be used for political expenditures.
Information regarding state and local corporate political contributions be posted to Qualcomm's website and updated at least twice each year.
In a statement, Paul Jacobs, CEO and Chairman of Qualcomm, said his company agrees that increased transparency for election-related activities “is very beneficial” and that the updated policy benefited from working with the fund. In turn, New York State Comptroller Thomas DiNapoli, trustee of the retirement fund, said Qualcomm's disclosure policy “sets a high standard” and is a “significant milestone” for those seeking greater transparency in corporate political spending.
That mutual praise stands in contrast to comments made in the weeks leading up to the lawsuit brought by the $150 billion fund in January. According to the lawsuit, filed in Delaware, the company spent more than $4.5 million on lobbying efforts in 2012 and repeatedly “refused the fund's request to inspect the company's books relating to the use of corporate resources for political activities.” In a statement issued just after the suit was filed, Qualcomm said it was surprised by the legal action.
It wasn't the first time DiNapoli and the retirement fund have tackled the issue. In 2011 and 2012, it filed 27 shareholder resolutions asking for disclosure of political spending, reaching agreement with 10 companies, including Marriott International, Limited Brands, Yum Brands, and KeyCorp.
While the debate over political spending disclosures will continue to be a prominent topic this proxy season, other efforts are also underway. Last month, the SEC updated its unified agenda and added a political disclosure rule with the projected timeline of April for a first proposal on the topic. On the same day DiNapoli's lawsuit was filed, U.S. Rep. Chris Van Hollen (D-Md.) reintroduced legislation, known as the DISCLOSE Act, which calls for all corporations, unions, and Super PACs to report to the Federal Election Commission, within 24 hours, any campaign spending totaling $10,000 or more.