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Shareholder groups want Britain's biggest multinational firms to make disclosures to investors about the extent of their involvement in US election campaign financing.
Sixteen FTSE 100 firms sponsor employee contribution vehicles, known as political action committees (PACs). Ten of the 16 FTSE 100 firms make no reference - explicit or implicit - to employee donation vehicles in their annual reports.
Karina Litvack, head of governance and sustainable investment at F&C Asset Management, said she had repeatedly made it clear F&C was "uncomfortable" with corporate political donations and PAC activities. "Many companies explain to us: 'The game is what it is in the US; you have to pay to be involved.' We recognise it's difficult to go cold turkey, but at the very least companies should disclose their positions clearly to shareholders."
Corporate PACs receive donations direct from the payroll of eligible US staff - usually senior executives. They are pooled under the control of a PAC board, which selects political candidates to support. The companies are not supposed to say where the cash goes, but candidates well placed or sympathetic to their commercial interests are likely to benefit.
Employee donation vehicles connected to British multinationals have been far the most active overseas-sponsored PACs in the past two years. According to the Centre for Responsive Politics, the US electoral transparency campaign group, five of the eight most active foreign-sponsored PACs are connected to FTSE 100 firms.
F&C has called on firms to develop and publish a code of conduct outlining the policies for collecting PAC contributions and selecting candidates to back. Specifically, F&C has called for a code to "detail mechanisms protecting from undue pressure to make contributions".
Donors and recipients are disclosed in filings to the federal election commission, but in practice they are almost impossible to track and aggregate. For example, the Centre for Responsive Politics identifies GlaxoSmithKline as the most active UK-sponsored PAC, calculating it has donated $702,670 (£442,000) in the current two-year electoral cycle - $409,300 to Republican candidates and $293,370 to Democrats. GSK, one of the few firms to make PAC disclosures in its annual report, has indicated the true figure is much higher. For 2007, GSK PAC gave £522,172.
The 16 FTSE 100 firms that sponsor PACs are GSK, BAE Systems, HSBC, AstraZeneca, Experian, Rolls-Royce, SABMiller, Royal Bank of Scotland, BP, WPP, Diageo, Shell, Prudential, National Grid, Intercontinental Hotels and Rio Tinto.
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