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This report shall be posted on the company’s
website to reduce costs to shareholders.
SUPPORTING STATEMENT: As long-term
shareholders of Verizon, we support policies that apply
transparency and accountability to corporate political
giving. In our view, such disclosure is consistent with
public policy in regard to public company disclosure.
Company executives exercise wide discretion over the
use of corporate resources for political purposes. They
make decisions without a stated business rationale for
such donations. We believe shareholders are entitled
to know how their company is spending its funds for
political purposes. However, although there are various
disclosure requirements for political contributions,
this information is difficult for shareholders to access
and is not complete.
Although the Bi-Partisan Campaign Reform Act enacted
in 2002 prohibits corporate contributions to political
parties at the federal level, corporate soft money state-level
contributions are legal in 49 states, and disclosure
standards vary widely. Corporations can also make unlimited
contributions to “Section 527” organizations,
political committees formed for the purpose of influencing
elections, but not supporting or opposing specific candidates.
These do not have to be reported.
In 2001-02, the last fully reported election cycle,
Verizon made at least $1,610,915.00 in political contributions.
(The Center for Responsive Politics: http://www.opensecrets.org/softmoney/index.asp.)
Relying only on the limited data available from the
Federal Election Commission, the Internal Revenue Service,
and the Center for Responsive Politics, a leading campaign
finance watchdog organization, provides an incomplete
picture of the Company’s political donations.
Current disclosure is insufficient to allow the Company’s
Board and its shareholders to fully evaluate the political
use of corporate assets.
Absent a system of accountability, corporate executives
will be free to use the Company’s assets for political
objectives that are not shared by and may be inimical
to the interests of the Company and its shareholders,
potentially harming long-term shareholder value.
There is currently no single source of information
that provides the information sought by this resolution.
This report should represent a minimal cost to the company,
as presumably management already monitors corporate
resources used for such purposes. We believe that transparency
and accountability in this area will advance our company’s
interests, and help build long-term shareholder value.
Last year, a similar proposal received 16% of the vote.
We urge your support for this critical governance reform.
BOARD OF DIRECTORS’ POSITION
The Board of Directors believes that the Company’s
political contributions constitute an appropriate expenditure
of corporate funds for valid business purposes. The
Company also offers employees of the Company an opportunity
to participate in the political process by contributing
through Company sponsored political action committees
(“PACs”) that are not affiliated with any
party or candidate on a strictly voluntary basis. The
Public Policy Committee of the Board of Directors periodically
receives reports on contributions and on the activities
of the PACs and reports on these activities to the Board.
The Board is confident that the Company contributions
seek to support those candidates and officials whose
views are consistent with the Company’s long-term
regulatory goals and interests. Any suggestion that
the Company’s contributions fund those whose agendas
are antithetical to the interests of the Company and
its shareholders is, the Board strongly believes, unsupported
in fact and plainly wrong. The contributions from the
PACs are directed by employees. The Company has in place
established reporting and compliance procedures and
believes it has made contributions to political parties
and candidates in accordance with all applicable laws
and regulations.
The Company’s resources currently allocated to
political activities are negligible in comparison to
the scope and extent of the Company’s business.
Nevertheless, in the Board’s view, implementation
of this proposal would involve additional time and expense
to the Company with little, if any, corresponding benefit
for shareholders. Significant information about political
contributions by the Company and the PACs is already
publicly available as required by applicable state and
federal laws. Accordingly, the Board believes there
is no need for the Company to use its financial and
other resources to provide duplicative and unnecessary
information.
For the foregoing reasons, the Board of Directors believes
that this proposal is unnecessary and the Board believes
that the proposal is not in the best interests of the
Company and its shareholders.
The Board of Directors recommends a vote AGAINST
this proposal.
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