Oct 01, 2014 - 1:45pm

CPA-Zicklin Index is Really a Tool to Silence the Business Community

Senior Editor, Digital Content

There’s a cottage industry of advocacy groups demanding greater transparency of businesses’ advocacy spending. One tool they use is the "CPA-Zicklin Index,” produced by the Center for Political Accountability and the Zicklin Center, which claims to measure public companies’ political disclosure policies.

In the Wall Street Journal, David Primo, an associate professor of political science and business administration at the University of Rochester and an adviser to the Center for Competitive Politics, pulls back the curtain and reveals the real intent of the index and the groups behind it. It’s not about making advocacy spending more transparent. Instead, it’s about driving the business community out [subscription required] of public policy debates to advance an ideological agenda:

So why do the Center for Political Accountability, the Zicklin Center and others argue that disclosure policies serve shareholder interests? One reason: Disclosure proponents are expressing concern for shareholders as a pretext for restricting corporate activity in politics.

Primo explains that these organizations revolve around attacking companies for daring to speak out on public policy issues:

In July, Bruce Freed, the CPA's founder and president, bragged to a group of graduate students that the center had succeeded in pressuring companies to implement disclosure rules: "By going outside the political process we've been able to achieve change that never would have been possible" through government.

Meanwhile, the progressive nonprofit Media Matters has developed an entire strategy built on existing disclosure requirements to "provoke backlashes among companies' shareholders, employees, and customers, and the public-at-large," according to a 2012 leaked strategy memo. Imagine what Media Matters could do with more disclosure requirements.

A recent paper by the Center for Competitive Politics explained these sophisticated strategies:

A cadre of unions, public pension funds, and activist investors are pursuing actions that would selectively burden American public companies from exercising their First Amendment rights to participate in public dialogue.

Having failed to achieve what they wanted through legislation, these activists turned their attention to executive agencies to try to silence opposition through regulatory fiat. These efforts included a draft executive order that would have required businesses to disclose political activities before bidding for federal government contracts, including support for trade associations and 501(c)(4) non-profit organizations, as well as separate regulatory efforts at the Federal Election Commission (FEC), the Federal Communications Commission (FCC) and the Securities and Exchange Commission (SEC).

In addition to these attempts to use the power of government to burden or silence the business community, activists and elected officials have engaged in an effort to force corporations, through public pressure, litigation, and corporate governance mechanisms, to disclose or scale back their expenditures related to lobbying and public policy activities. Much of this pressure has come from labor unions and other activists claiming to represent the interests of a company’s shareholders, but in actuality pursuing an ideological agenda unrelated to the profit-­‐maximizing interest of most shareholders.

The CPA-Zicklin Index is part of this toolkit. It’s a gag for silencing the business community from exercising its First Amendment rights. 

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About the Author

About the Author

Sean Hackbarth
Senior Editor, Digital Content

Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.