(January, 4, 2013) — With New York State Common Retirement Fund’s recent suit against wireless-technology company Qualcomm for disclosure of political records, some say the action represents a new era of more active (and demanding) institutional investors.

The lawsuit claims that–despite a formal request by the pension fund and other institutional investors–Qualcomm has declined to disclose its political donations.

“As a shareholder in public corporations, the Fund has a right to be properly informed about the use of corporate funds to influence the political process,” said New York State Comptroller Thomas DiNapoli, who oversees the New York State Common Retirement Fund. “Without disclosure, there is no way to know whether corporate funds are being used in ways that go against shareholder interests. The Fund has taken a leadership role in pressing the issue of disclosure of political spending since the Supreme Court’s Citizens United decision. Shareholders have a right to know how Qualcomm spends money in the political arena.”

DiNapoli continued: “Corporate spending for political purposes should be focused solely on creating shareholder value and should be done in a completely transparent manner. Qualcomm’s lack of disclosure of political spending prevents the Fund from determining if shareholder value is being furthered.”

The suit raises the question of how much responsibility shareholders, such as pension funds, have in influencing corporate management. Do pensions have the right, and a responsibility, to be active shareholders? Such concerns over corporate political spending were raised following the US Supreme Court’s landmark 2010 decision in Citizens United v. Federal Election Commission, in which the court ruled that corporations have a First Amendment right to spend unlimited money in political campaigns.

“But if funds are investing in corporations, they should have a say on what to do with it. Corporations should disclose that,” according to Dean Baker, co-director at the left-leaning Center for Economic and Policy Research in Washington.

“Pensions don’t generally act as active shareholders–CalPERS has historically been the most active. But with all the money many schemes are investing in corporations, they have a lot of clout to push economic benefits if they want to, favorable tax benefits for example. I think they have that responsibility,” Baker noted.

The suit against Qualcomm follows a coalition of institutional investors, including the Common Retirement Fund, putting pressure on Aetna to open up about the millions of dollars it gives to political organizations for “educational activities.” In August, the coalition, representing $922 billion in assets publicly pushed the insurance giant to open up about its political and lobbyist spending. The group approached Aetna about two payments that had been previously mentioned in an industry regulatory filing: $3 million to conservative “action tank” American Action Network and $4 million to the US Chamber of Commerce. In response, Aetna’s CEO Mark Bertolini said the contributions were for “educational activities” and that the company is not required to disclose them.

“Regardless of whether the expenditures were for lobbying or for educational purposes, we still don’t know what the $7 million bought the company or its investors,” said Robert Naftaly, chairman of the United Auto Workers Retiree Medical Benefits Trust, at the time. “What we’re really asking for is more information from our portfolio companies—including Aetna. ‘Transparency’ is not a four-letter word; rather, it inspires investor confidence and forms the bedrock of our capital markets.”

So, if corporations continue seeking funding from institutional investors, they may have to play their cards better and acquiesce to demands among shareholders for greater transparency. If not, such investors may put their money elsewhere, Baker indicated.