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Intel isn\u2019t the only tech company with a political action committee funneling money into Congress. But some of Intel\u2019s recent donations \u2014 including\u00a0to politicians known for opposing marriage equality like North Carolina\u00a0Senator Richard Burr and\u00a0Minnesota Representative Tom Emmer\u00a0\u2014 have alarmed shareholders, who are now proposing a resolution<\/a> that would force the chip-maker\u00a0to publicly explain political donations that don\u2019t line up with its stated policy positions.<\/p>\n The proposal is the brainchild of NorthStar Asset Management, a firm that frequently pushes tech companies to more closely evaluate their political contributions. Julie Goodridge, the CEO of NorthStar, told TechCrunch that Intel agreed in 2013 to offer explanations of incongruous donations to shareholders, and enshrined the agreement in its political accountability guidelines.<\/p>\n But now, Goodridge says, Intel is going back on its promise and refusing to justify its contributions to politicians who oppose LGBT rights or deny climate change. When Intel updated its political accountability guidelines<\/a> after the November election, the sentence about explaining \u201csignificant incongruencies between a candidate\u2019s record and our own policies\u201d had vanished.<\/p>\n In a recent SEC filing<\/a>, Intel\u2019s board said it is \u201cunrealistic\u201d to expect the company or its stockholders to agree with every stance taken by a politician who receives contributions from Intel. The board also noted that it conducts an annual review of its political contributions to make sure they align with corporate policy.<\/p>\n Intel CEO Brian Krzanich, a self-described #LGBTQAlly<\/a>, has championed diversity in Silicon Valley and vocally opposed anti-LGBT legislation. The company discloses its positions<\/a> on a number of political concerns, including the environment and immigration, and Intel signed on to a legal brief opposing President Trump\u2019s immigration order.\u00a0But Krzanich has also become one of Trump\u2019s allies in the tech industry, cozying up to the president during\u00a0an announcement<\/a> of a new Intel factory and praising Trump\u2019s tax and regulatory policies.\u00a0During the campaign, Krzanich planned to host a fundraiser<\/a> for Trump, but backpedaled after the event attracted media attention.<\/p>\n Over the years, Krzanich has positioned himself \u2014 and, by extension, Intel \u2014 as an ally to immigrants and LGBT people, but that position is\u00a0belied by some of Intel\u2019s\u00a0PAC spending. Controversial donations translate into risk for stockholders, Goodridge says.<\/p>\n \u201cThe company\u2019s message about their behavior in the world becomes part of who the company is.\u00a0If companies\u00a0didn\u2019t care how they were perceived, they wouldn\u2019t jump through all these hoops to advertise and appear to be good citizens,\u201d Goodridge\u00a0explains. As shareholders, she adds, NorthStar is concerned with Intel\u2019s revenue but its behavior counts too. \u201cThere is additional value in the behavior of the company because bad behavior exposes them to risk and risk exposes them to financial consequences,\u201d she says.<\/p>\n Just like similar PACs at Facebook, Apple and Google, Intel\u2019s PAC is funded by voluntary donations from its employees (Krzanich himself is a regular contributor). Tech workers who want to contribute to their employers\u2019 lobbying efforts can opt to fund the PAC, which in turn divvies up the money between members of Congress, candidates, ballot initiatives and other PACs. Intel\u2019s Congressional donations tend to split almost evenly along party lines \u2014 the company doesn\u2019t want to be perceived as heavily favoring Democrats or Republicans.\u00a0In 2015, the most recent year for which Intel has published<\/a> its PAC contributions,\u00a0Intel gave slightly more<\/a> to Republicans.<\/p>\n The employee PAC system tends to obfuscate where the money ends up, so it\u2019s not always clear to employees or even CEOs how their political contributions are being spent.<\/p>\n During the backlash against SOPA and PIPA<\/a> in 2011, NorthStar brought a similar proposal at Google, asking the search giant to stop donating to members of Congress who supported the twin bills. At a shareholder meeting where the NorthStar proposal was being considered, Alphabet executive chairman Eric Schmidt said Google had already stopped contributing to SOPA supporters \u2014 but a NorthStar representative quickly retorted that Google had just given to Bob Goodlatte<\/a>, a co-sponsor of SOPA. (Google declined to comment on the meeting.)<\/p>\n \u201cWhat was startling and shocking among all this is the people who are doing the marketing or doing some level of oversight in policy have very little idea about what\u2019s really going on in terms of dollars going out to support politicians who are for or against stuff they care tremendously about. That points to poor governance,\u201d Goodridge says.<\/p>\n NorthStar\u2019s policy objectives trend liberal,\u00a0but the firm\u2019s goal with its Intel proposal isn\u2019t to dry up funding for conservatives. Instead, NorthStar takes issue with contributions to specific Congressmen whose policy positions don\u2019t align with Intel\u2019s own stated political\u00a0objectives. The question NorthStar poses is:\u00a0Why fund a Congressman who\u2019s actively working against you?<\/p>\n The current tech PAC strategy of handing out contributions to almost every member of Congress isn\u2019t effective, NorthStar argues.<\/p>\n \u201cIf these companies are giving contributions to every politician without discrimination, the politicians are beholden to no one. They know they are going to get the contributions regardless of the position they take,\u201d says Christine Jantz, chief investment officer at NorthStar.<\/p>\n Perhaps Intel believes that donating to its political opponents buys a seat at the table, which its lobbyists might use to convince a Congressman to change his mind on a particular issue. TechCrunch contacted a member of Intel\u2019s board who oversees its political work for comment on the motivations that drive Intel\u2019s\u00a0PAC spending. The board member referred TechCrunch to an Intel spokesperson, who did not respond to several requests for comment. Intel\u2019s board is recommending that shareholders vote against NorthStar\u2019s proposal.<\/p>\n NorthStar, which holds Intel shares worth more than $3 million and also invests heavily in Facebook and Google, has a history of challenging companies\u2019 electioneering practices.<\/p>\n \u201cI\u00a0want Intel to be held accountable for the fact that they agreed to something with shareholders and they backed off of that agreement,\u201d she said. \u201cIntel hasn\u2019t been doing well lately. They\u2019ve been having a lot of problems, they\u2019ve made some bad business decisions around growth prospects and they\u2019ve missed market opportunities by becoming somewhat stagnant in terms of product development. And we wonder if that plays into this not really paying attention to what the heck they\u2019re doing \u2014 including with their political contributions.\u201d<\/p>\n Shareholders have lately grown\u00a0skeptical of corporate donations to political figures. The holding company\u00a0Berkshire Hathaway is facing a similar shareholder proposal<\/a> that would require the company to publish a biannual report disclosing its political contributions. Berkshire is headed by Warren Buffet, a Democratic mega-donor.<\/p>\n Intel is already ahead of Berkshire in that regard. The company releases reports documenting the contributions made by its employee PAC. But releasing these reports without explanation of controversial donations might create more risk for shareholders, NorthStar argues.<\/p>\n \u201cMitigating the risks that come with those disclosures is vital for the success of the company and shareholder value,\u201d the firm wrote in its proposal. Shareholders will vote on the proposal during a meeting on May 18.<\/p>\n Featured Image: Sean Gallup \/ Staff\/Getty Images<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"![\"\"](\"https:\/\/tctechcrunch2011.files.wordpress.com\/2016\/09\/gettyimages-515552466.jpg?w=680\")
Intel isn’t the only tech company with a political action committee funneling money into Congress. But some of Intel’s recent donations — including\u00a0to politicians known for opposing marriage equality like North Carolina\u00a0Senator Richard Burr and\u00a0Minnesota Representative Tom Emmer\u00a0— have alarmed shareholders, who are now proposing a resolution that would force the… Read More<\/a><\/p>\n\n<\/img><\/a>
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