Update on P&G and political spending policy

On Oct. 6, 2011 Procter & Gamble filed an amendment to its 2011 proxy statement . According to the update, Proctor & Gamble reiterates its stance that the company “has not used, and has no plans to use, corporate funds to support direct political expenditures to influence federal elections for office, nor to make contributions to trade association or other groups for that purpose.” Procter & Gamble goes on to state that “While this is our general policy even at the state or local level, we have occasionally permitted, based on exceptions approved by our Public Policy Team, contributions to groups that may use the funds to influence state or local elections for office.” In that vein, the company’s Public Policy Team approved a $40,000 contribution to Partnership for Ohio’s Future – a group that “provided educational materials regarding Ohio’s judicial elections and expressed support for two judicial contests.”

According to documents filed with the Ohio Secretary of State, the group spent $1.57 million on independent expenditures for two candidates on the ballot for the Ohio Supreme Court. Under Ohio law, the Partnership for Ohio’s Future was not required to disclose the contributions, but did so voluntarily. In addition, the group is not required to disclose its donors, since independent expenditures are exempted from the donor reporting requirements to which most electioneering communications are subject.

Procter & Gamble discloses the contribution in its 2010 Corporate Contributions to Ballot Initiative or Issue Advocacy. However, in the disclosures, the Partnership for Ohio’s Future is described as a 501(c)(4) group that was formed by the Ohio Chamber of Commerce whose purpose is “to push for public policies that lead to greater opportunities and a higher quality of life for Ohio citizens. The Partnership encourages the public to learn about the issues and elections that impact Ohio’s economy.” No mention is made by Procter & Gamble of any candidate support or candidate advocacy provided by the group.

Since the Partnership for Ohio’s Future is a 501(c)(4) group, the contribution is technically not in conflict with stated company policy to “not use corporate funds to support 527 organizations or candidates in states where it is legally permissible to do so.” However, shareholders will need to decide if contributions to 501(c)(4) groups like the Partnership of Ohio’s Future are violating the spirit, if not the letter, of company policy since the money donated to certain groups is being used to support candidates at the state and local level while the company’s public policy position generally forbids any such involvement.


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