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By MATTHEW STURDEVANT, email@example.com
4:21 PM EDT, August 31, 2012
Investors that represent unions, state pension funds and other groups, with a combined total of $922 billion in assets, are pressuring Aetna to publicly disclose how much money it gives to political organizations.
The coalition of investors on Thursday made a public appeal to Aetna's board audit committee asking the Hartford health insurer to disclose direct and indirect political and lobbying payments as well as contributions to trade associations and other tax-exempt groups. Aetna published its 2011 "Political Contributions and Related Activity Report" on Aug. 24, which included money for politicians and various groups though the activist investors say the report didn't include all political payments.
"Aetna, and all public companies, must always act in the best interests of its shareholders when spending corporate dollars," said New York State Comptroller Thomas P. DiNapoli, who oversees the pension fund for that state's workers. "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."
Aetna spokesman Matthew Wiggin said, "We have the letter and will respond directly."
In June, a Washington D.C. watchdog group, Citizens for Responsibility and Ethics, sent a letter to Aetna CEO Mark Bertolini asking him to stop using corporate funds to influence elections. The group, CREW, provided documents that it said was an Aetna filing with the National Association of Insurance Commissioners. It showed a $3 million donation to the American Action Network Inc. and a $4 million donation to the U.S. Chamber of Commerce.
The American Action Network is a 501(c)(4) that describes itself as encouraging and promoting "center-right policies based on the principles of freedom, limited government, American exceptionalism, and strong national security." CREW calls the action network a "shadowy" organization that "broke both tax and campaign finance laws in its quest to influence the 2010 elections."
Bertolini responded, in this letter , saying of the chamber and action network, "No funds were provided to these organizations for lobbying purposes; however, we have provided funds to these organizations for educational activities. Furthermore, amended filings clearly show the changes we made to the reports and are available to the public."
DiNapoli, the New York comptroller, said, "Aetna's effort to characterize millions in political donations it made in 2011 as 'educational' activities is a red flag for shareholders."
United Auto Workers Retiree Medical Benefits Trust Chairman, Robert Naftaly, said, "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. 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."
Groups that signed the letter to Aetna include: AFL-CIO Office of Investment; The Co-operative Asset Management (United Kingdom); F&C Management Ltd. (U.K.); Hermes Equity Ownership Services (U.K.); Illinois State Board of Investment; International Brotherhood of Teamsters; Middletown Works Hourly & Salaried Union Retirees Health Care Fund; MN (The Netherlands); New York State Common Retirement Fund; SEIU Pension Plans Master Trust; UAW Retiree Medical Benefits Trust; UFCW Pension Plan for Employees; Unitarian Universalist Association.