Aetna’s Transparency Problem
So far this month, the American Action Network (AAN) has poured more than $10 million into ad buys in six congressional districts — part of a last-minute October spending dump explicitly aimed at preserving the Republican majority in the House this election season. AAN is a non-profit, organized under section 501(c)(4) of the tax code. What this means is the group doesn’t have to reveal its donors, or their hidden agendas, and voters have no idea where the $10 million being spent to influence their votes is coming from. It’s clear, though, that at least some of it is coming from publicly traded companies whose leaders want shareholders and customers kept in the dark about their political spending.
In June, my group, Citizens for Responsibility and Ethics in Washington (CREW), learned that insurance giant Aetna had donated more than $3 million to AAN and more than $4.4 million to the U.S. Chamber of Commerce, a trade association also not required to reveal its donors. Aetna’s donations became public only because the company accidentally included them on an obscure regulatory filing — a mistake the company quickly tried to correct by amending its paperwork. After the discovery, CREW called on Aetna to stop using corporate funds to influence elections, a proposal the company brushed off.
In May 2012, Aetna CEO Mark Bertolini staved off a shareholder proposal requiring disclosure by claiming he did not believe it was warranted. Aetna had already promised to be transparent about its political spending, the result of a 2007 agreement the company negotiated with shareholders. Mercy Investment Services, the investment arm of the Sisters of Mercy, which helped negotiate the agreement, says Aetna’s failure to disclose the AAN and Chamber of Commerce donations violates the deal. In other words, Aetna’s leaders are willing to break promises made to nuns.
Aetna has demonstrated shareholders can’t rely on such voluntary policies. If the companies don’t take them seriously, why should anyone else?
There is some good news. Last month, a new study from the Center for Political Accountability that looked at the top 200 companies on the S&P 500 Index found many companies have increased disclosure of political spending. Although the study’s release resulted in news stories highlighting the improvements, there are some pretty big loopholes. For example, only 32 companies promised to disclose payments to politically active non-profits organized under section 501(c)(4) of the tax code, like AAN. Only 18 companies said they had a policy against donating to such groups. That leaves an awful lot of companies who won’t rule out secretly funneling money into shady groups trying to influence voters.
Former Sen. Norm Coleman (R-Minn.), AAN’s chairman, is an old pro at raising money from the insurance sector, which means Aetna’s almost certainly not the only insurance company he’s cultivated while at AAN. UnitedHealth Group, for instance, which doesn’t publicly disclose contributions to 501(c)(4) groups, was the fifth largest contributor to Sen. Coleman during his time in office.
Consumers deserve to know when their insurance companies are using their premiums to shape election results. CREW has urged the Securities and Exchange Commission to require greater disclosure of political spending by corporations. Aetna has proven companies can’t be trusted to do it on their own.