Another way companies can contribute to the political process is by supporting events such as Presidential inauguration celebrations and the Republican or Democratic Party conventions, a growing source of corporate support in recent years.

While AT&T requires executive and board oversight of political spending, it does not publicly disclose its political contributions. The company also does not disclose its memberships in trade associations and the payments it makes to them or other tax exempt organizations that are used for political purposes. These gaps in transparency and accountability put shareholder value at risk. AT&T competitor Verizon discloses its soft money political spending.

Election Cycle Trends

The company gave $1.4 million to 527 groups in the 2008 election cycle. It also gave nearly a $1 million in the 2006 election cycle, $526,375 in the 2004 cycle and $3.9 million in the 2002 cycle. Among the 527 groups that received AT&T donations are the Republican Governors Association, to which AT&T gave $1.1 million since October 2002 and the Democratic Governors Association, which received $656,000 from AT&T since March 2002. The company also gave $614,000 to the Democratic Legislative Campaign Committee (DLCC) since June 2001. The DLCC works to win state legislative seats and chambers for Democrats.
 
Company contributions also are significant at the state-level. AT&T gave $4.2 million at the statelevel in the 2008 election cycle, nearly $5.5 million in the 2006 cycle, $3.2 million in the 2004 cycle and $3.7million in the 2002 cycle. The amounts listed for the state-level giving are approximate figures because state campaign finance reporting is often incomplete and in many cases corporate and PAC donations are reported interchangeably even though PAC donations are employee-funded. Adding to the confusion, the National Institute on Money in State Politics— the nation’s most complete resource on money in state politics—compiles data on what companies and their PACs give to state-level candidates, party committees and/or ballot measures but not to PACs active in the states.

Some of the company’s donations raise issues of inadequate oversight because the recipients used corporate funds for purposes that may not be in the best interest of shareholders.
 

The company gave $20,000 to Texans for a Republican Majority in the 2004 election cycle, which was used by former House Majority Leader Tom DeLay to fund the change of control of the Texas House of Representatives in 2002. TRMPAC was indicted in September 2004 for violating Texas campaign law by accepting $120,000 in allegedly illegal corporate campaign contributions from other companies shortly before and after the 2002 elections.

Trade Association Activity

Trade associations serve a variety of purposes. Some engage in political activity through
contributions at the state and local level, grassroots lobbying, and issue advocacy. These
activities are funded by dues and other payments from member companies. While not all trade associations are politically active, several major industry groups carry significant political weight.

AT&T does not disclose a list of its memberships in trade associations and other tax-exempt groups. However, AT&T CEO, Randall L. Stephenson belongs to the Business Roundtable (BRT). In 2007, the BRT reported dues of $22.5 million and spent 8.4 million (37%) of that money on lobbying and political expenditure. In addition, AT&T’s Senior Vice President for External Affairs, Leonard J. Cali serves on the board of the National Association of Manufacturers (NAM). In 2006, NAM reported dues of $36.7 million and lobbying and political expenditures of $13.8 million (37%).

A portion of the company’s payments to these groups was likely used to underwrite some of this political spending. The company could face risks from the political activities of trade associations or groups to which it makes payments. Without disclosure by the company, shareholders cannot assess these risks.

Industry Comparison
AT&T competitor Verizon discloses its soft money political spending.

Positive Practices
The company has board and CEO oversight of corporate political spending. It also discloses the criteria it uses to select recipients of its political expenditures.

Room for Improvement
The company does not disclose its political donations, memberships in trade associations or other tax exempt organizations or the portion of its payments to such groups that are used for political expenditures.