More companies shed light on political spending (Reuters)

WASHINGTON (Reuters) – More American companies are bending to shareholder pressure to reveal their spending to sway political campaigns despite court decisions allowing unfettered corporate cash in elections, according to a study released on Friday.

Colgate-Palmolive Co, IBM and Merck & Co are among the big names with the best grades from the Center for Political Accountability, a foundation-funded group that pushes companies to open up their books.

The landmark Citizens United ruling by the U.S. Supreme Court in 2010 ended most restrictions on campaign donations by corporations and unions, giving these groups the ability to write fat checks to back political causes.

But pressure has been building for years from shareholders of public firms to shed light on such spending. Proponents of disclosure argue that getting involved in politics poses big risks for a company's reputation and brand.

Target Corp learned that lesson the hard way, when it gave $150,000 in 2010 to a Minnesota business group that backed a Republican candidate for governor who was a staunch opponent of gay marriage.

Potential shareholder ire "has got the attention of companies because now there is greater recognition that political spending poses real risks," said Bruce Freed, president of the Center for Political Accountability. "Are they there yet? No. But the direction is important."

The candidate ultimately lost the race but Target was forced to defend itself from shareholders and some in the public, who threatened a boycott.

Shareholders have had increasing success in pushing companies to open up about their donations. Of the 33 resolutions at major companies that made it to a shareholder vote in 2011, the average support was about 34 percent, according to the Center. Several years back, support of such resolutions was about 10 percent.

Three-fifths of the Standard & Poor's 100 companies are now reporting direct corporate spending, while 43 companies report some information about political spending through third parties like trade groups, the survey found.

Before the Citizens United ruling, companies could spend $5,000 from their employee-funded political action committees on a candidate per election. Now, there are no limits.

Citizens United and other legal rulings will help make the 2012 presidential election the costliest ever, with a price tag of $6 billion or more, according to some independent estimates.

SECRET FUNDS

Some well-known corporations say they would not risk their brand by giving to a group with an overly political agenda.

"Most companies are worried about alienating consumers," said Wesley Bizzell, assistant general counsel of tobacco conglomerate Altria, which scored in the top tier in the survey.

Under Citizens United, pro-business trade groups like the U.S. Chamber of Commerce and other tax-exempt entities won new powers to spend unlimited pools of cash without disclosing donors.

Corporate America has a ways to go in detailing this funding, Freed and other activists said.

"All of the secret money is being laundered through tax- exempt groups, which means, if a corporation is going to agree to disclose its political activities, to be effective, it must include the money it gives to trade associations," said Fred Wertheimer, a veteran campaign finance lawyer and president of Democracy 21, which promotes campaign finance reform.

The use of funds from undisclosed sources rose to $135 million in the 2010 elections, up from about $76 million in 2008, according to the nonpartisan Center for Responsive Politics.

IBM, for example, requires that the money it gives to the Chamber not be for political activity such as advertising.

But most companies do not put such restrictions on the funds to these organizations.

"There is a lot of latitude for organizations to have it both ways." said Sheila Krumholz, executive director of the nonpartisan Center for Responsive Politics.

(Editing by Philip Barbara)

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Oil companies brace for possible Gulf storm (Reuters)

HOUSTON (Reuters) – A tropical depression hovering over the central Gulf of Mexico on Friday threatened to bring heavy flooding to the energy infrastructure-heavy Gulf Coast in the coming days.

Tropical depression 13, which could become Tropical Storm Lee later on Friday, has already prompted oil and gas producers to shut down platforms and evacuate workers from the offshore oil patch that provides about a third of the nation's oil production and about 12 percent of its natural gas.

The slow-moving system that has essentially parked about 210 miles south of the mouth of the Mississippi River could bring up to 20 inches of rain over southern Louisiana, Mississippi and Alabama through Sunday, the National Hurricane Center said.

Louisiana Governor Bobby Jindal on Thursday declared a state of emergency, citing the likelihood coastal and inland areas would be drenched by up to 15 inches of torrential rain within 48 hours.

Heavy, prolonged rains could pose a severe test to low-lying New Orleans and its protective levee system.

The Gulf Coast is home to 40 percent of U.S. refining capacity and 30 percent of natural gas processing plant capacity. Much of that infrastructure is in southeast Texas and near the coasts of Louisiana and Mississippi.

"They're calling for 18 to 20 inches of rain in spots over the next several days. You've got big issues," said Aaron Studwell, a meteorologist with Wilkens Weather in Houston.

Will Hinson, spokesman for Exxon Mobil Corp's joint-venture 192,500 barrel-per-day (bpd) refinery in Chalmette, Louisiana, said the plant was prepared and was operating normally.

Other refiners also said they were prepared for bad weather and were monitoring the system.

Major Gulf producer Royal Dutch Shell spokeswoman Kelly op de Weegh said on Friday the company had "minimal" production impacts, but had evacuated 500 workers and may evacuate more. Shell operates six oil and gas platforms in the Gulf.

Other producers, including BP Plc and Anadarko Petroleum Corp, were shutting all output and evacuating all workers.

Studwell said the system was about 190 miles southwest of the center of Mississippi Canyon and 75 miles south-southwest of Green Canyon, the two areas of the Gulf with the highest concentrations of oil and gas platforms.

(Reporting by Kristen Hays and Erwin Seba; editing by Jim Marshall)

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Companies propose curbing junk food ads for kids (AP)

WASHINGTON – The nation's largest food companies say they will cut back on marketing unhealthy foods to children, proposing their own set of advertising standards after rejecting similar guidelines proposed by the federal government.

A coalition of food companies — including General Mills, ConAgra Foods and Kellogg — announced the guidelines Thursday. The companies said the effort will vastly change what is advertised, forcing them to curb advertising on one out of three products currently marketed to children.

The new standards, which will allow companies to advertise food and beverage products to children if they meet certain nutritional criteria, could force some brands to change recipes to include less sodium, fat, sugars and calories. While many companies have trumpeted their own efforts to market healthier foods to kids, the agreement would apply the same standards to all of the participating companies.

"Now foods from different companies, such as cereals or canned pastas, will meet the same nutrition criteria, rather than similar but slightly different company-specific criteria," said Elaine Kolish of the Children's Food and Beverage Advertising Initiative, a group formed by the industry to address marketing issues.

The group's proposal was pushed along by a government effort to do the same thing. The Federal Trade Commission and several other government agencies were directed by Congress to come up with voluntary guidelines for marketing junk food to children, and those were issued earlier this year. The industry balked at that proposal, saying the voluntary standards were too broad and would limit marketing of almost all of the nation's favorite foods, including some yogurts and many children's cereals.

Not surprisingly, the proposal issued by the government is stricter than the standards the companies are pushing for themselves. Still, FTC Chairman Jon Leibowitz praised the industry guidelines Thursday. He said the government would consider the food companies' initiative as the government develops its own standards.

"The industry's uniform standards are a significant advance, and are exactly the type of initiative the commission had in mind when we started pushing for self-regulation more than five years ago ... we applaud industry for making healthy progress," he said.

While the government proposal put broad limits on fats, sugars and sodium that would apply to marketing of all foods, the industry has suggested different guidelines for different foods, saying that is a more practical approach.

The industry guidelines for children's cereals, for example, would allow them to be advertised if they have around 10 grams of sugar a serving, while the formula used by the government would discourage advertising for cereals that have 8 grams of sugars in an equivalent serving. That would mean General Mills would still be able to advertise Honey Nut Cheerios cereal under the industry guidelines but would be discouraged under the voluntary government guidelines. Other sugary cereals such as Trix, Lucky Charms and Count Chocula would also make the cut under the industry numbers.

Another difference between the proposals is where companies are allowed to advertise. While the government guidelines are broad, discouraging advertising of unhealthy foods on packaging and in stores, along with in the media, the industry guidelines would apply to media — television, radio, print, video games and the Internet — but not packaging. That means the little bee on the front of the Honey Nut Cheerios box and the rabbit on the Trix box would stay under the industry proposal and go under the government draft.

Even if the industry standards are not as strict as the government guidelines, they still represent progress on the part of the companies. Many companies now advertise any children's cereals that have less than 12 grams of sugar, down from 15 or 16 grams of sugars a decade ago.

Margo Wootan, director of nutrition policy at the advocacy group Center for Science in the Public Interest, praised the industry for pushing for uniform standards for all of the companies, though she said they do not go far enough. She said she hopes the industry standards are a jumping-off point for negotiations with health advocates and the government.

"The government agencies have developed standards that are best for kids and the companies have developed standards that are best for industry, now we need to work out a reasonable compromise," she said.

Iowa Sen. Tom Harkin, the Democrat who wrote the language directing the government to develop the standards, said he believes the industry proposal falls short.

"With childhood obesity rates rising, now is the time for all parties to rally around those guidelines and begin implementing them, rather than coming up with competing proposals," he said.

That may be a while off. House Republicans have included a provision in next year's Federal Trade Commission budget that would delay the government standards by asking the government to study the potential cost and impact of the guidelines before implementing them.

If they are not delayed by Congress, a final draft of the standards could come by the end of the year.

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Online:

Children's Food and Beverage Advertising Initiative: http://www.bbb.org/us/children-food-beverage-advertising-initiative

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Find Mary Clare Jalonick on Twitter at http://twitter.com/MCJalonick

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