Chevron $2.5 Million Contribution a Risk to Shareholder Value?
Posted at 11:58 a.m. on May 31, 2013
Chervron Corporation’s annual meeting this week was the scene of the most recent attempt by shareholders to get management to say how political contributions from the corporation benefit shareholders. A shareholder resolution called for a stop to the practice.
The tactic of asking the question forces a company to either not answer the question, provide a soft general non-response, or admit that they pay funds to obtain specific government contracts or legislative results, which are a benefit to shareholders. A small seven figure contribution may help bring about a huge multi-million dollar return. Chevron responded “Chevron exercises its fundamental right and responsibility to participate in the political process…advocates positions on proposed polities that will effect the Company’s ability to realize strong financial returns while meeting the world’s growing demand for energy.”
Chevron Corporation had been criticized by some for its $2.5 million contribution the Congressional Leadership Fund, a Republican-aligned super PAC. The contribution was reportedly received on October 7, 2012, just before the 2012 general election. Public Citizen has filed a complaint with the Federal Election Commission regarding this contribution by a federal government contractor.
The Chevron board recommended that shareholders vote against the resolution to stop political sending. The resolution failed to pass, with only 4% shareholder support.
Chevron Corporation does have a federal PAC, Chevron Employees PAC. It has raised and spent $7 million since the 1983-1984 cycle. In the 2011-2012 cycle, the PAC gave out $698,000 with 92% going to Republicans. View the 2011-2012 financial profile.
The largest individual donors at Chevron have been Chairman and CEO John S. Watson who usually maxes out to the National Republican Senatorial Committee, and former chairman and CEO David J. O’Reilly who usually maxes out to the Republican National Committee.
Chevron gave $380,000 to Section 527 organizations in 2011-2012. This included $300,000 to the Republican Governors Association; $50,000 to the Democratic Governors Association; $20,000 to the Republican State Leadership Committee; and $10,000 to the Democratic Attorneys General Association.
Chevron reported spending $9.6 million on lobbying during 2012 and $3,660,000 in the first quarter of 2013. View multi-year lobbying summary.