Investor: Ecolab’s Political Gifts Clash With Its Values
An investor in St. Paul-based Ecolab, Inc., is pushing for shareholder oversight of the company's political contributions.
In a Monday filing with the U.S. Securities and Exchange Commission, Boston-based NorthStar Asset Management, Inc., said that some of Ecolab's contributions have gone to politicians who work to enact public policies that are inconsistent with the company's stated values.
“Many of those [contribution] decisions appear to have reflected the personal values of the management team, rather than the expressed values of Ecolab,” NorthStar said in the filing.
The firm noted several of what it called the “most egregious” political contributions made by Ecolab's political action committee. Among them: $35,500 to U.S. Representative John Paul Kline, Jr., and $16,000 to U.S. Representative Michele Bachmann. Both are Minnesota Republicans who opposed hate crime legislation, the American Clean Energy and Security Act of 2009, and the repeal of Don't Ask/Don't Tell, designed to reduce discrimination in the military, NorthStar said.
A $26,000 contribution to a Minnesota Democrat-U.S. Representative Collin Clark Peterson-was also cited. NorthStar said that he sponsored an amendment to the Clean Water Act and the Federal Insecticide, Fungicide, and Rodenticide Act that would limit government regulation of certain discharge to waterways, and he voted for the deregulation of greenhouses gases. Peterson additionally opposed hate crime legislation and the repeal of Don't Ask/Don't Tell.
“All electioneering contributions bearing our company's name that are incongruent with the company's stated values may negatively impact brand image and shareholder value,” NorthStar said.
Ecolab's values are illustrated by its nondiscrimination policies, such as its “commitment to equal opportunity and affirmative action” and its public vow to “promote stewardship of natural resources and protect the environment,” NorthStar said.
In its filing, NorthStar urges shareholders to vote at the company's annual meeting on Thursday for a proposal that would change Ecolab's current contribution practices. Rather than disclosing contributions after the fact and making them without shareholder approval, shareholders would vote on anticipated contributions before they are made.
Ecolab is recommending that shareholders vote against the proposal. In a proxy statement, the company said that “substantial review is performed before any political contributions are made.”
Ecolab also said that its political action committee is funded by voluntary contributions from employees, and contributions are determined by a board that mostly consists of executives from the company's business units.