New York's comptroller has sued Qualcomm Inc. in an attempt to compel
the wireless technology company to disclose its political spending to
him and other shareholders.
The lawsuit filed Wednesday in Delaware
seeks a court order to inspect company records, saying prior requests
for the information have been rebuffed by the San Diego-based
corporation. The suit cites studies that say corporate political
spending tends to hurt investor returns.
"We think the fullest
possible disclosure is what we're entitled to as shareholders,"
Comptroller Thomas DiNapoli said. He is sole trustee of New York's
pension fund for public workers, which has 6.1 million Qualcomm shares
valued at almost $380 million.
According to the comptroller's
office, the company spent more than $4.5 million on lobbying last year.
That figure was based on data compiled by OpenSecrets.org, which showed
Qualcomm spent more than $6 million on lobbying in both 2010 and 2011.
Qualcomm didn't initially respond Thursday to requests for comment.
said the lawsuit is a new tactic that holds promise for getting
corporate transparency and accountability for shareholders. "It's just
part of our continuing effort to have companies we invest in follow the
best practices," he said.
The New York pension fund and other
members of the Council of Institutional Investors sent letters to 430
companies in 2010 asking that they disclose political contributions made
with corporate funds. In the past two years, the fund filed 27
shareholder resolutions asking for disclosures, reaching agreement with
10 companies, comptroller spokesman Eric Sumberg said.
says corporate political activity has risen sharply since the U.S.
Supreme Court in 2010 removed restrictions on it. The suit also cites
recent studies, including one from Strategic Management Journal in 2012
that indicates that spending in general "is negatively correlated with
enterprise value." The abstract of that study said researchers looked at
943 companies from 1998 to 2008.
"We find that firms' political
investments are negatively associated with market performance and
cumulative political investments worsen both market and accounting
performance," the abstract said
Firms that put former public
officials on their boards also performed worse. Corporate political
activity had a positive effect on market performance in regulated
industries, it said.