(August 30, 2012) – Institutional investors noticed something odd in Aetna’s “Political Contributions and Related Activity” report: multi-million dollar donations to right-wing political organizations showed up just in footnotes as “voter education initiatives,” or were missing entirely.
Now they want to know more. A coalition of institutional investors representing $922 billion in assets are publically leaning on 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.
The investors are pushing back.
“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. “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.”
Three weeks ago, the coalition wrote to Aetna’s board audit committee urging the company to publically disclose all of its political spending, direct and indirect. Signatories included the United Auto Workers’ medical benefits fund, Illinois State Board of Investment, New York State’s Common Retirement Fund, and the Teamsters’ union, among many other public and union investors from the United States, the United Kingdom, and the Netherlands. Aetna hasn’t budged, and the group is keeping the pressure on.
“Aetna’s effort to characterize millions in political donations it made in 2011 as ‘educational’ activities is a red flag for shareholders,” said New York State Comptroller Thomas DiNapoli in a statement. “Aetna, and all public companies, must always act in the best interests of its shareholders when spending corporate dollars. Transparency is the best possible way to maximize returns and minimize risk for investors. This episode should serve as a wake-up call that disclosure of political spending is an issue about which shareholders should be deeply concerned.”