Lobbying Expenditures Disclosure

Resolution Text

WHEREAS, we believe in full disclosure of Caterpillar’s direct and indirect lobbying activities and expenditures to assess whether Caterpillar’s lobbying is consistent with its expressed goals and in stockholders’ best interests.

RESOLVED, the stockholders of Caterpillar request the preparation of a report, updated annually, disclosing:

1.  Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications. 

2. Payments by Caterpillar used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient. 

3. Caterpillar’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Caterpillar is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

The report shall be presented to the Public Policy and Governance Committee and posted on Caterpillar’s website. 

Supporting Statement   Caterpillar spent $36,380,000 from 2010 – 2018 on federal lobbying. This does not include state lobbying expenditures, where Caterpillar also lobbies but disclosure is uneven or absent. For example, Caterpillar spent $547,756 on lobbying in California from 2010 – 2018. Caterpillar also lobbies abroad, spending between €200,000–299,000 on lobbying in Europe for 2018.

Caterpillar belongs to the Chamber of Commerce, which has spent over $1.5 billion on lobbying since 1998. Caterpillar also belongs to the Business Roundtable and National Association of Manufacturers, which together spent over $68 million on lobbying for 2017 and 2018 and are lobbying against shareholder rights to file resolutions. Caterpillar does not disclose its payments to trade associations or the amounts used for lobbying. And Caterpillar does not disclose its membership in tax-exempt organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC).

We are concerned that Caterpillar’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Caterpillar’s corporate ALEC membership has drawn scrutiny,[1] and over 110 companies have publicly left ALEC. And Caterpillar uses the Global Reporting Initiative (GRI) for sustainability reporting, yet currently fails to report “any differences between its lobbying positions and any stated policies, goals, or other public positions” under GRI Standard 415.

We believe the reputational damage stemming from this misalignment between general policy positions and actual direct and indirect lobbying efforts harms long-term value creation by Caterpillar. Thus, we urge Caterpillar to expand its lobbying disclosure.

 

[1] https://www.prwatch.org/news/2018/05/13346/take-money-and-run-trump-tax-cuts-boost-earnings-alec-corps-which-promptly-layoff

 

Lead Filer

Kevin Thomas
Fonds de Solidarite FTQ

Co-filer

Priscilla Cohen
Benedictine Sisters, Sacred Heart Monastery of Cullman, Alabama
Judy Byron
Tom McCaney
Sisters of St. Francis of Philadelphia
Sr. Susan Mika
Congregation of Benedictine Sisters, Boerne TX