Friday, September 14, 2007
WHAT'S NEW IN PUBLIC AFFAIRS
No question, "Accountability" is today's new watch-word (literally), whether it's business or government, and the number of groups holding business executives and government officials accountable is nearly matched by the number of ways they are doing it. USA Today reports that the "shareholder engagement era" has begun, with shareholders becoming increasingly proactive in communicating to corporate boards their views on issues as varied as executive compensation and global climate change. As for government accountability, in addition to the likely-to-be-signed-into-law ethics reform legislation, which Roll Call reports still contains provisions that have companies unsure about how to comply, Internet activists - what the London Telegraph calls "Online Revolutionaries" - increasingly are using the power of the Internet as a grassroots tool to influence the behavior of governments, and businesses, at all levels. These stories, and others, are taken into account in this edition of the Public Affairs News Monitor.
HEADLINES AT A GLANCE
"Congress' Gift Rules Now Apply to Businesses"
"Government Regulation Is Back in Style"
"Bundler-Lobbyists Tracked on New Web Site"
"A Comeback for Issue Ads?"
"Boardrooms Open Up to Investors' Input"
"Free-Trade Deals Face Rocky Path"
"Governance & Reputation"
"Online Revolutionaries"
UPCOMING CONFERENCES
Political Involvement Legal Overview
September 17, 2007 - Las Vegas, NV
This meeting is essential for anyone involved in your organization's government relations or public affairs programs. The program was designed for professionals at the state and federal levels who are seeking guidance on campaign finance, lobbying laws, gift restrictions and other legal considerations. Our speaker, Ken Gross, the country's leading authority on campaign finance legal issues and Public Affairs Council legal adviser, will answer your political legal inquiries and review hot-button issues and common mistakes made by political programs.
Corporate PAC Roundtable
September 18, 2007 - Las Vegas, NV
Limited space available. Registrations accepted on a first come, first serve basis.
This hands-on idea-sharing forum offers you a unique opportunity to exchange successful solicitation strategies with fellow PAC professionals, discuss effective communications, identify potential pitfalls, benchmark your PAC's performance and address strategies for success.
Grassroots Roundtable
September 19, 2007 - Las Vegas, NV
Limited space available. Registrations accepted on a first come, first served basis.
This fast-paced, interactive discussion offers you a unique opportunity to share best practices for keeping your grassroots contacts informed, in focus and active.
COUNCIL SERVICES
Did you know that you can find job postings on the Council's Web site? Learn more at www.pac.org/jobs
copyright 2007
INFORMATION, INC.
Public Affairs News Monitor may be reproduced in hard copy form or electronically for internal circulation to Public Affairs Council member companies and associations.
"Congress' Gift Rules Now Apply to Businesses"
Roll Call (09/10/07) P. A8; Davidson, C. Simon
Likely to be signed into law, the Honest Leadership and Open Government Act will dramatically change the lobbying registration and disclosure forms that must be completed by companies and individual lobbyists. Under the law, violators would face criminal penalties that would put them behind bars for as many as five years; civil penalties have long been in place. There also is confusion surrounding a provision requiring individual lobbyists and organizations to certify that they have read and understand the gift and travel rules put forth by the House and Senate. Much of the confusion centers on the fact that organizations cannot "read," leading company executives to wonder how the provision will be applied. Additionally, companies are uncertain how to determine which employees should read the rules and how to make sure they have done so. Washington, D.C.-based attorney C. Simon Davidson of McGuireWoods LLP recommends a formal process that will enable companies to document compliance - a process that would involve naming the employees who should be well-versed in the rules, having them certify that the rules have been read, and establishing training programs to ensure that the rules have been understood.(www.rollcall.com)
"Government Regulation Is Back in Style"
Christian Science Monitor (09/10/07) P. 14; Francis, David R.
Tighter government regulation has resurfaced in light of the recent subprime fallout, but analysts agree that businesses should not be surprised, given that tighter regulation usually follows economic crises. According to public interest advocate Ralph Nader, about 90 percent of Americans would like further regulation of genetically altered foods and improved labeling for products and ingredients, but government agencies, such as the U.S. Food and Drug Administration, remain toothless. With the recent mortgage crisis, many investors bought into collateralized debt obligations that were not sound investments. Market forces often provide a great deal of economic power to the nation, but without safeguards in place, crises can occur and cause significant economic loss. Congress is considering a number of regulatory options to curb regulatory hassles and rein in the markets, ranging from regulations for the energy markets to the telecommunications sector.(www.csmonitor.com)
"Bundler-Lobbyists Tracked on New Web Site"
Boston Globe (09/06/07); Smith, James F.
Bundlers are political campaign fundraisers who mobilize individual contributions, and some bundlers are also registered lobbyists. The whitehouseforsale.org Web site, which was launched on Sept. 6, helps track bundlers and make them understandable, and it also discloses which bundlers are lobbyists for various causes. The site is part of the Public Citizen consumer activist organization, and a new Public Citizen report estimates that candidates have already signed up 92 federal lobbyists as fundraisers. In the 2004 race, 136 lobbyists served in a similar capacity. According to the study, the majority of lobbyist-fundraisers who participated in 2004 have not yet signed on with a candidate, most likely because they are waiting to see what frontrunners emerge. Democrat Hillary Clinton and Republican John McCain have over twice as many lobbyist-fundraisers as any other contender in their parties, while Clinton's chief rivals, Barack Obama and John Edwards, are not accepting aid from federal lobbyists.(www.boston.com/globe)
"A Comeback for Issue Ads?"
National Journal (09/08/07) Vol. 39, No. 36, P. 54; Vaida, Bara
Running political issue ads in the closing weeks of primaries and general election campaigns is a stratagem that, although banned by the 2002 McCain-Feingold campaign finance law, the U.S. Chamber of Congress is considering bringing back into vogue. In June, the Supreme Court overturned a provision of McCain-Feingold prohibiting corporations and unions from funding broadcast, cable and satellite issue ads 30 days before a primary and 60 days before a general election if the ad mentioned the name of a candidate for federal office. The court argued that the provision excessively restricted grassroots advocacy. The Federal Election Commission (FEC) is crafting rules that incorporate the court's ruling into existing law. Chief Justice John Roberts wrote that the ruling's protection would not likely apply to ads mentioning the suitability of a candidate for office. "We definitely feel the door is much more open now," stated the Chamber of Commerce's William Miller. "But whether we do run issue ads [in the 60-day window] depends on how the rules are written." The FEC recently released a pair of proposals for implementing the change. One proposal would relax the limits of corporate and union funding of issue ads while requiring financial disclosure of spending on such advertising. The other proposal would remove the restrictions and make disclosure unnecessary. The Chamber of Commerce will likely favor the removal of the disclosure requirement, according to Miller. FEC Vice Chairman David Mason said in an interview that two proposals were offered because the agency is uncertain about whether the fix to McCain-Feingold should be deemed "administrative" or "statutory" by the commission. The adoption of a less-restrictive rule by the FEC will undoubtedly lead to a surge of issue ads on radio and television.(www.nationaljournal.com)
"Boardrooms Open Up to Investors' Input"
USA Today (09/06/07); Iwata, Edward
The shareholder engagement era has begun, according to some experts, with 23 percent of the more than 1,100 shareholder resolutions amicably withdrawn when corporate boards either adopted similar policies or agreed to discuss the issues at hand. A great many of the resolutions dealt with curbs on excessive executive pay packages, and many of those resolutions received up to 60 percent of investors' votes. In prior years, those resolutions would have received only about 3 percent from investors, and board members and executives would have dismissed the resolutions out of hand. Today's corporate governance focus has improved shareholder-board relations, particularly as a swath of federal regulations insisted companies review their accounting practices and other functions. Moreover, board members and executives understand environmental and social issues also impact finances at large, and they need to be addressed. While some corporate leaders claim shareholders go beyond their legal rights in pressuring companies to change, experts agree corporate leaders are taking a more proactive stance. Shareholders at many firms now elect board members by a majority of votes, rather than a simple plurality of votes, although many firms are still opposed to providing shareholders with a vote on executive pay packages. Shareholders continue to make inroads with boards on global climate risks and emissions reductions, but excessive CEO-pay debates rage onward. Critics caution although a great deal of progress has been made in board-shareholder relations, shareholders at some firms continue to have strained relationships with board members and executives. (www.usatoday.com)
"Free-Trade Deals Face Rocky Path"
The Hill (09/04/07) P. 1; Swanson, Ian
The debate over globalization could make the road bumpy for free trade agreements (FTAs) under consideration this fall. Business is pushing for a House vote on the Peru FTA before the end of September, while multinational lobbyists are also hoping to stave off legislation that could impose heftier tariffs on Chinese imports. House Democrats, and especially Democratic committee chairmen with considerable clout, frequently regard FTAs with skepticism. Appropriations Chairman Rep. David Obey (D-Wis.), to name just one foe, has opposed a number of high-profile free trade deals, including permanent normal trade relations with China and U.S. entry into the World Trade Organization. Younger members of the Democratic Caucus regularly take a cue from Obey and other committee chairmen, even with House Democratic leaders harboring a friendlier attitude toward FTAs. A vote against trade would add up to little political risk for Democrats but could amount to a tremendous economic loss, said U.S. Chamber of Congress President Tom Donohue. The chamber is rolling out a grassroots campaign aimed at 75 congressional districts, including those of 40 Democrats, to cultivate support for the trade deals; freshmen members are targeted by the initiative, according to Chamber trade lobbyist Christopher Wenk. FTAs with Peru and several Central American countries are viewed with disfavor by organized labor lobbyists.(www.hillnews.com)
"Governance & Reputation"
NYSE Magazine (09/07) Vol. 7, No. 3, P. 26
CEOs are spending less time on regulatory and compliance issues, and instead focusing on strategy and customer relations, according to a survey by NYSE Magazine. One of the big reasons for this is that the Sarbanes-Oxley Act already has been in effect for five years, giving business leaders a chance to calmly discuss and plan the best way to approach governance issues. More than 90 percent of CEOs said they expect directors to have greater knowledge about the business and regulatory issues, while 30 percent strongly believe that board members can be excellent sources of advice. The survey asked about executive compensation for the first time ever, with 40 percent of CEOs either claiming dissatisfaction or refusing to answer the question. CEOs also are hoping for changes to the American legal and regulatory systems in order to lower litigation risk or streamline the regulatory process. The definition of success is changing for CEOs, with more emphasis placed on customer satisfaction and long-term growth rather than an increase in stock prices, according to the recent report. Despite these findings, a large portion of the public still believes that CEOs could be more concerned about their companies' reputations.(www.nyse.com)
"Online Revolutionaries"
London Telegraph (09/09/07) P. 5; Garside, Juliette
Activists are using the Internet to take on targets such as governments and big businesses, with MoneySavingExpert.com owner Martin Lewis comparing the influence of his site, which was a focus of an immense protest against HSBC, to that of a major trade union, because, in his words, "the structure of collectivism has changed." Editor of Internet start-up blog TechCrunch Mike Butcher says social networking sites are primarily responsible for the acceleration and mainstreaming of the process that enables grassroots campaigns to build momentum. "It started off in the blogosphere but it took dedicated hardcore techie people to create that effect," he recalls. "In social networking you create a profile and immediately start talking to a wider audience." VCCP Search Managing Director Paul Mead explains that the online space intimidates many CEOs, who choose to take a course of nonaction, which is why many companies with brands under attack have been hesitant to go online to defend themselves. Immediate Future Managing Director Katy Howell thinks businesses could cultivate positive relationships with online communities by helping them review new products or put together events or competitions. "One of the advantages of being in the conversation before the crisis hits is you can build friendships with people who will rush to your defense when something goes wrong," she says. Open engagement and direct response to complaints is a strategy that can benefit companies or institutions targeted by activists. Disrupted Horizon's John Straw predicts that companies will be forced to rethink their marketing and product development tactics because of the Internet's influence as a tool for activism.(www.telegraph.co.uk)
