Call for openness on political donations

(Correction: Because of a reporting error, a story about companies that disclose their political contributions in the Feb. 9 Business section incorrectly described the contents of the politicalmoneyline.com database. It does contain a $150,000 donation by Schering-Plough Corp. to the Republican Party's national convention in 2004.)

Shareholder activists plan to target several New England companies this spring with resolutions calling for more disclosure and stricter reviews of their political contributions, opening a front in the debate over the influence of corporate money in government.

Retailers CVS Corp. of Rhode Island and Staples Inc. of Framingham will be among 30 or more companies being asked to have shareholders vote on whether their political contributions should be disclosed, according to the Center for Political Accountability, an advocacy group in Washington coordinating the campaign. So will Marsh & McLennan Cos. of New York, parent of Boston's Putnam Investments, the activists say.

At least six companies already have moved to disclose their giving recently because of activist requests, including Coca-Cola Co., PepsiCo Inc., and Morgan Stanley.

Timothy H. Smith, senior vice president of Walden Asset Management in Boston, said he expects these resolutions will get significantly more attention from investors this year because of scandals that have linked companies with political wrongdoing, such as the work on behalf of conglomerate Tyco International Ltd. in 2003 done by Republican lobbyist Jack Abramoff. On Jan. 3, Abramoff pleaded guilty to charges of fraud, tax evasion, and conspiracy to bribe public officials.

''This is becoming a matter of simple good corporate governance for the business community," Smith said.

Jack VanWoerkom, Staples general counsel, said the company has begun talks with the investor group proposing the measure, NorthStar Asset Management of Boston, and expects to implement a disclosure policy soon. ''We feel strongly about transparency," he said. ''When it appears it's this important to shareholders, in general, I think we have to respond to it," he said.

A spokesman for CVS said the company encourages shareholders to contact executives regarding its disclosure policies, but wouldn't discuss them publicly. A spokeswoman for Marsh & McLennan said the company wouldn't comment. NorthStar said it chose Staples because the company is known for progressive corporate governance. Bruce Freed, codirector of the Center for Political Accountability, said CVS and Marsh & McLennan were chosen as examples of heavily regulated businesses.

The influence of corporate money on political activity has become a central complaint of campaign-finance critics, who have seized on examples such as the indictments of companies that contributed to groups affiliated with former House majority leader Tom DeLay. The Texas Republican now faces money-laundering charges, and donors including Sears Roebuck & Co. and Cracker Barrel Old Country Store Inc. have settled prosecutors' allegations.

Since the 1990s a host of websites and services have sprung up to track the contributions made to particular candidates by companies or their political action committees.

Because of the limits of computerized records, however, that site and others often provide only limited access to records by particular donors, especially in state races where direct corporation donations are still allowed. That makes it hard to track the influence of particular companies, say Freed and others.

For instance, after being targeted with a disclosure resolution last year, New Jersey drug maker Schering-Plough Corp. posted on its website a list of all contributions to various state and federal races since 2003.

The total for 2005 was $346,560 -- $138,010 in direct contributions and $208,550 from the company's political action committee, the Schering-Plough Better Government Fund. A combined 2003 and 2004 list shows $517,751 in direct spending and $291,975 from the political action committee. One direct contribution was the $150,000 the company gave to run the 2004 Republican Party national convention in New York in 2004. The contribution isn't listed in common databases such as politicalmoneyline.com, however.

Matthew Shaffer, a senior researcher at Common Cause, a Washington group promoting campaign-finance changes, said the disclosure is commendable. ''These are things they could have made an excuse not to include, and they did," Shaffer said.

A Schering-Plough spokeswoman, Denise Foy, said the company wouldn't discuss its contributions.

At many companies, management isn't required to make the changes even when a majority of investors favor them.

Also, the activists have run into plenty of opposition or indifference from investors who control far more shares. A study by Common Cause showed disclosure resolutions averaged around 12 percent support at 25 companies in 2004. The highest was at Verizon Communications Inc., with 16 percent. Mutual funds run by Fidelity Investments of Boston have opposed disclosure resolutions in the past, while funds run by Vanguard Group Inc. of Pennsylvania have abstained.

A Fidelity spokeswoman, Anne Crowley, said the company wouldn't discuss the thinking behind the votes, but noted guidelines that say in part that Fidelity ''will generally oppose shareholder proposals that do not appear reasonably likely to enhance the economic returns or profitability of the portfolio company or to maximize shareholder value." Glenn Booraem, who manages Vanguard's proxy votes, said trustees ''don't see the direct connection to driving the value of the stock" from the disclosure proposals.

Other trustees seem open to the idea, however. Dawn-Marie Driscoll, a trustee of Scudder Funds, said that it generally doesn't support new reporting burdens, but added that some company boards should consider whether shareholders would want to know where company money is going.

''In that sense it's like any other financial disclosure. Even if it's not material, it's better to err on the side of disclosure," she said.

Ross Kerber can be reached at kerber@globe.com. MORE ON CORPORATE ACCOUNTABILITY

Visit an advocacy group's website, and see Schering-Plough's implementation of its principles at boston.com/business.