Money Talks

• Publication year: 2017

Money Talks

Barbara J. Hart

Christina McPhaul

MONEY TALKS

Barbara J. Hart Christina McPhaul^*

When we were asked to submit this Article, the election had not yet occurred. Needless to say, much has changed now as to how to write about being an impactful progressive. The question remains: how do we create the world with the values and resources we hope to preserve for generations to come? Is all lost? To the contrary, as events unfold, activism's legacy of success continues on, and the power of consumers and investors' pocketbooks is perhaps more important than ever to win change.

In today's marketplace, consumers and investors alike are exerting support for brands and corporations whose values align with their own. Consumers look for labels that indicate organic, cage-free, humanely-raised, non-GMO, fair trade, family-owned, and energy-efficient products. Research by the Global Strategy Group indicates that 56% of Americans believe that corporations should engage in a dialogue surrounding social-political issues.¹ A Forbes study found that Americans are 8.1% more likely to purchase from a company that shares their opinions and 8.4% less likely to purchase from a company that does not.² For instance, consumers express their preference by purchasing Chobani yogurt as the company touts:

How we do business matters to us, because we believe in doing business the right way. But we don't stop there. We also give a portion of our profits to charity through the Chobani Foundation. Through our Chobani Foundation, we work to empower sustainable change in the communities in which we operate.³

Indeed, one study found that corporate activism on social-political issues, including same-sex marriage, has a significant impact on consumer purchase

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intention.⁴ Recently, Amazon released a commercial about inter-faith friendship between a Christian priest and a Muslim imam, which went viral on the internet.⁵ While this ad moved the hearts of many, it also got the attention of consumers just in time for the holiday shopping season. Corporations' public stands on social-political issues clearly have an impact on the bottom line.

In its landmark decision, Citizens United v. Federal Election Comm'n, 558 U.S. 310 (2010), the U.S. Supreme Court invalidated previous limits on corporate contributions to political action committees (or "PAC"s), bringing the role of corporations in American democracy to the foreground. Corporations have a voice to be heard, and contributing money to political campaigns and other initiatives is how corporations often speak in the public space. The Supreme Court explained that "[p]olitical speech is 'indispensable to decisionmaking in a democracy, and this is no less true because the speech comes from a corporation rather than an individual.'"⁶ Justice Kennedy, delivering the opinion of the Court, wrote, "When Government seeks to use its full power, including the criminal law, to command where a person may get his or her information or what distrusted source he or she may not hear, it uses censorship to control thought. This is unlawful. The First Amendment confirms the freedom to think for ourselves."⁷ Out of Citizens United, along with the related case SpeechNow.org,⁸ and subsequent Federal Election Commission advisory opinions and regulations, super PACs emerged.⁹ While it is unlawful for a corporation to "make a contribution or expenditure in connection with any election to any political office,"¹⁰ a corporation may establish a traditional PAC as a "separate segregated fund to be utilized for political purposes by a corporation."¹¹

Against this backdrop, shareholders should be able to see where the corporation has made contributions and how much, and corporations' CEOs and

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boards should be held accountable as shareholders' agents. Indeed, shareholders may very well support the corporations' right to lobby as it may protect shareholders' interests, but it is still incumbent on them to make sure that corporations' donations align with the long-term investment values and social values of the...