An activist investor has asked IBM to report on its lobbying activities, which he claims involve the expenditure of “dark money” on groups that campaign against climate change reporting and bills.
In advance of IBM’s April 29 annual meeting of stockholders, Big Blue shareholder and activist investor John Chevedden filed a letter this week through the Securities and Exchange Commission urging fellow investors to support a proposal that would urge IBM to “improve” its lobbying disclosure, both directly to the government and, allegedly, through “dark money.”
The letter criticises IBM’s disclosure of lobbying as insufficient and risky to shareholders. “Dark money” spending on trade associations and social welfare organisations poses unidentified dangers, he says, and urges IBM to include information on its lobbying in a shareholder annual report.
For instance, IBM belongs to the Business Roundtable that has been in opposition to the Securities and Exchange Commission’s rules requiring disclosure of climate risk. IBM also belongs to the Chamber of Commerce, which is said to be a “central actor” in discouraging climate legislation for two decades.
Internationally, IBM claims it wishes to reduce the risk of climate change. In its 2023 Environmental, Social and Governance (ESG) report, it reported that IBM had been “committed for decades to addressing climate change through the company’s energy conservation and climate protection programs.
Requirements over spending on business associations imply companies can donate limitless sums to independent groups who then spend millions engaging in lobbying as well as frequent, not-yet-disclosed grassroots efforts, the letter maintains.
Chevedden states, “IBM stockholders are a victim of a trade association blind spot, because IBM does not disclose its trade association payments, nor the percentage of these payments spent on lobbying. IBM’s memberships in 13 trade associations, such as the Business Roundtable and US Chamber of Commerce, have collectively spent more than $2.3 billion in federal lobbying since 1998. But stockholders have no way of knowing how much of IBM’s payments to each is spent on lobbying.
In lobbying to US Federal Government, IBM invested $78.2 million between 2010 and 2024, and $22.2 million between 2021 and 2024, the letter adds.
Yet lobbying on a state level is less transparent. Chevedden’s letter states that 98 percent of the S&P 500 did not report state-specific lobbying figures to stockholders, a 2023 study found. In California alone, where it is required to disclose, IBM spent $1.28 million between 2010 and 2024 on lobbying, it states. “IBM’s existing lobbying disclosures are insufficient to safeguard stockholder interests,” the letter asserts.
Chevedden has spent decades agitating the US corporate titans such as General Motors, eBay, and Google on their governance. While critics say such efforts are a waste of time, his proposals have passed shareholder approval at Netflix and Texas Instruments, reports say.
