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Shareholders united: The antidote to Citizens United?
Posted By Sharon McCloskey On January 4, 2013 @ 11:51 am In Uncategorized | Comments Disabled
You may recall a short while back, after the tragedy in Newtown, how the California State Teachers Retirement System learned  that its $500 million investment commitment to private equity group Cerberus Capital Management was headed to a company with a controlling interest in North Carolina-based Freedom Group , maker of the Bushmaster assault rifle used in the shootings at Sandy Hook Elementary School.
Needless to say, the group of current and retired teachers were none too happy to learn that their hard-earned dollars were funding assault weapons and quickly announced that they were reviewing that commitment. The group’s response to its very public discovery, coinciding with national outrage over the shootings and renewed calls for gun control legislation, caused Cerberus to announce just days later that it was selling its interest in Freedom Group.
Now comes another pension group, the New York State Common Retirement Fund, that is likewise seeking to exercise its shareholders rights to dictate the behavior of companies in which it invests — this time taking aim at the corporate political spending unleashed by the U.S. Supreme Court’s Citizens United decision.
The $150 billion fund owns more than $380 million in shares of chipmaker Qualcomm. As explained in more detail in this piece by Thomson Reuters’ Alison Frankel , the fund sued Qualcomm  in Delaware Chancery Court earlier this week, seeking an order requiring the company to turn over its books and records so shareholders can see its political contributions.
“If a corporation is going to engage in free speech using shareholder money, the shareholders should be able to learn what that speech is,” said pension fund lawyer Mark Lebovitch of Bernstein Litowitz. “Political spending raises unique concerns. Shareholders who ask for it should get that information.”
As Frankel points out, getting that order won’t be easy, as the Delaware chancery courts typically require shareholders to allege that corporate board members have breached their fiduciary duties before giving shareholders access to books and records.
But if the New York fund is successful, not only will it obtain the information it seeks but it might also open up a whole new round of corporate accountability and, perhaps, provide an end run around the covert corporate political spending that Citizens United has enabled.
Article printed from The Progressive Pulse: http://pulse.ncpolicywatch.org
URL to article: http://pulse.ncpolicywatch.org/2013/01/04/shareholders-united-the-antidote-to-citizens-united/
URLs in this post:
 California State Teachers Retirement System learned: http://finance.fortune.cnn.com/2012/12/17/the-money-behind-the-massacre/?iid=EL
 Freedom Group: http://www.freedom-group.com/
 in this piece by Thomson Reuters’ Alison Frankel: http://newsandinsight.thomsonreuters.com/Legal/News/2013/01_-_January/NY_pension_fund_s_bold_tactic_to_force_campaign_spending_disclosure/
 sued Qualcomm: http://pulse.ncpolicywatch.org/wp-content/uploads/2013/01/nypensionfundvqualcomm.pdf
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