Investor Coalition: WSJ's Attack On Shareholder Activism Sends "Chilling Message"


During the past week, progressive organizations involved in a shareholder effort to force more transparency in health insurer WellPoint's political contributions have responded to The Wall Street Journal's recent editorial demonizing shareholder activism as "intimidation."

In the editorial, the Journal singled out Change to Win (CtW), a coalition of some of the nation's leading labor unions, and its WellPoint shareholder outreach and organizing efforts, claiming CtW was campaigning "to intimidate companies from exercising their free-speech rights." Last week, CtW's investment group responded to the Journal's attacks, writing that "the Journal is sending a chilling message: renounce principles of good corporate governance or face baseless and misleading attacks from the supposed voice of business."

From the response:

In its May 8, 2012 editorial, the Wall Street Journal's editors conflate shareholders' call for transparency and accountability in corporate political spending with attacks on free speech itself. This position conveniently ignores the Supreme Court's ruling in Citizens United v. Federal Election Commission, which not only reaffirmed the importance of disclosure, but did so as it advanced corporate free speech. In fact, these are two sides of the same coin, with the rights to corporate free speech stemming from the collective representation of shareholders. Also ignored is the Supreme Court's broader declaration that "disclosure permits citizen and shareholders to react to the speech of corporate entities in a proper way." For shareholders transparency is thus essential to ensure that political spending is used to advance the interests of shareholders, and not the parochial or short-term objectives of incumbent executives.

There is no better example of the dangers posed for shareholders from opaque and unaccountable political spending than WellPoint. WellPoint participated in the secret funneling of $86 million to the U.S. Chamber of Commerce via the American's Health Insurance Plans (AHIP) trade association, in order to run attack ads against health care reform, even as it made public statements in support of key provisions included in the proposals. This alarming activity, bordering on duplicity, risked jeopardizing the health care reform effort that WellPoint endorsed as part of its long-term interests.


Make no mistake: the real target of this position is the broad coalition of global shareholders united in pushing for transparency and accountability in corporate political spending, including members of the International Corporate Governance Network and the Council of Institutional Investors, which endorse disclosure and collectively represent $21 trillion in assets. In penning its second editorial on the issue in just 2 months (see editorial "The Corporate Disclosure Assault," March 19, 2012), the Journal is sending a chilling message: renounce principles of good corporate governance or face baseless and misleading attacks from the supposed voice of business.

In a May 14 statement, Health Care for America Now, a health care advocacy coalition of "more than 1,000 groups in 50 states representing 30 million people" that works in part to "increase corporate accountability," underscored the push for shareholder activism by WellPoint investors, noting WellPoint's ties to conservative groups as ALEC and the U.S. Chamber of Commerce :

Health plan members and shareholders of WellPoint Inc., the nation's second largest for-profit health insurance company, are demanding that the company stop secretly spending policyholder premiums and taxpayer money on political actions hurting American families. The activists say WellPoint must end its long history of reckless political entanglements that risk the company's reputation and threaten its stock price.


WellPoint supports extremist lobbying groups like the American Legislative Exchange Council and the U.S. Chamber of Commerce as well as politicians like the anti-union governors of Ohio, Wisconsin and Indiana. These activities undermine the standard of living of working Americans and create a real reputational risk to the company and its investors. Billions of dollars are at stake.


In one of the worst examples of WellPoint's deceptive agenda, the company has been working surreptitiously for years to interfere with the passage and implementation of Obamacare. In 2009, WellPoint secretly joined with other big insurers to funnel $86 million to the U.S. Chamber of Commerce through AHIP, the health insurance industry lobbying arm, to air ads against health care legislation while insurers publicly claimed to support health reform. The company has openly supported members of Congress who are hostile to workers and want to repeal Obamacare. The ALEC campaign that WellPoint supports specifically targets Obamacare's requirement that insurance companies stop denying care due to pre-existing conditions. Undoing the health law would punish millions of middle-class and working families.

Posted In
Economy, Labor Unions
Wall Street Journal
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