Political Disclosure and Accountability – Hess Corporation (2014)
Outcome: Successfully Withdrawn. The company has committed to fully disclose its trade association memberships and the other tax exempt organizations which it makes contributions to, as well as the portion of those payments that are used for political activities.
Resolved, the shareholders of Hess Corporation (the “Company”) hereby request the Company prepare and semiannually update a report, which shall be presented to the pertinent board of directors committee and posted on its website, that discloses Hess’s –
(a) Policies and procedures for making political contributions and expenditures (both direct and indirect) with corporate funds, including the board’s role (if any) in that process, and
(b) Monetary and non-monetary political contributions or expenditures that could not be deducted as an “ordinary and necessary” business expense under section 162(e) of the Internal Revenue Code; this would include (but not be limited to) contributions to or expenditures on behalf of political candidates, political parties, political committees and other entities organized and operating under sections 501(c)(4) of the Internal Revenue Code, as well as the portion of any dues or payments that are made to any tax-exempt organization (such as a trade association) and that are used for an expenditure or contribution that, if made directly by the Company, would not be deductible under section 162(e) of the Internal Revenue Code.
The report shall identify all recipients and the amount paid to each recipient from Company funds.
As long-term Hess shareholders, we support transparency and accountability in corporate spending on political activities. Disclosure is in the best interest of the Company and its shareholders. Indeed, the Supreme Court’s 2010 Citizens United recognized the importance of disclosure when it said: “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”
We acknowledge that Hess prohibits political contributions to candidates, parties, committees, and 527 organizations. We also applaud management’s efforts to enssure internal compliance after it was discovered last year, in receipt of this resolution, some employees had in fact used corporate funds to make political contributions in 2012. However, we believe company disclosures are still deficient because the Company will not disclose the following expenditures made for political purposes:
- A list of trade associations to which it belongs and how much it gave to each;
- Payments to any other third-party organization, including those organized under the section 501(c)(4) of the Internal Revenue Service codes; and
- Any independent expenditure made directly by the Company.
Information on indirect political engagement through trade associations and 501(c)4 groups cannot be obtained by shareholders unless the Company discloses it. This proposal asks Hess to disclose all of its political spending, direct and indirect. This would bring our Company in line with a growing number of leading companies, including Noble Energy, ConocoPhillips, and Exelon, which support political disclosure and accountability and present this information on their websites.
The Company’s Board and its shareholders need comprehensive disclosure to be able to fully evaluate the political use of corporate assets. We urge your support for this critical governance reform.