In the Citizens United era, with billionaires and big business out to buy our elections wholesale, defending our democracy will take every weapon in our arsenal. Fortunately, a local elected official has just come up with a new one.
Last week, New York State Comptroller Thomas DiNapoli brought suit in Delaware’s Chancery Court to force the tech company Qualcomm to provide information about its political donations. Qualcomm, like about half of all US corporations, is based (on paper) in Delaware. DiNapoli is the sole trustee of the New York State Common Retirement Fund, a public employee pension fund holding $378 million in Qualcomm stock. So he’s been seeking information from the companies the fund invests in about their political spending. Over the past two years, the fund has pushed twenty-seven pro-disclosure shareholder resolutions, leading to settlements with ten companies. Qualcomm proved more stubborn.
“In the case of Qualcomm,” says DiNapoli, “we had a company that was particularly resistant to our entreaties for disclosure as a shareholder. They don’t score well relative to other companies with regard to this issue. So we thought about trying a new tactic, and that is using the privileges we have under Delaware law” to trigger “a mechanism that shareholders can use if they have concerns about how a company is spending their money.” He adds that while his lawsuit “may be a novel strategy, in the aftermath of Citizens United, there’s heightened concern about where this money is going.”
What DiNapoli is seeking is eminently reasonable for any shareholder to expect—especially one charged with safeguarding the retirement of over a million workers and retirees. “When you can’t get access to this information voluntarily,” says DiNapoli, “it certainly seems to me to be a logical extension of what is provided for under a ‘books and records action’ ” within Delaware law. Others agree: Former SEC Chair Harvey Pitt, who served under President George W. Bush, told The New York Times, “I don’t want to predict where the Delaware court will come out, but where you have a very large shareholder and something directly related to corporate governance, it seems to me a pretty compelling circumstance…”