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Outback donations targeted

Shareholder activists want the restaurant chain and other companies to disclose political contributions.

By SCOTT BARANCIK
Published March 22, 2006

An Outback Steakhouse Inc. shareholder has introduced a resolution aimed at making the Tampa company disclose certain political contributions.

The resolution, to be voted on at Outback's annual meeting April 25, is part of a nationwide effort promoted by union, religious and socially conscious investors who want public corporations to be more transparent and accountable - and, opponents complain, to heed a strict political agenda.

Though Outback is thought to be the only Florida company targeted, a number of the almost 60 companies affected this spring are active in the Tampa Bay area, including retailers CVS and Wal-Mart, financial services giants Citigroup and Bank of America, and communications companies Verizon and Clear Channel. Outback is the country's most politically active restaurant chain and considers such activity a key part of its duty to shareholders.

If approved, the resolution would require the company to regularly disclose on its Web site the political contributions it makes to so-called "527" groups, some of which are run by powerful lawmakers who transfer the money to favored candidates.

Corporations generally are not required to disclose such contributions when made with company cash, though the 527 groups usually report their receipts to the Internal Revenue Service or to federal or state elections officials. The resolution would require a board-level committee to monitor Outback's donations.

Outback officials oppose the proposal. Ballots sent to shareholders Monday said all of the company's political contributions are publicly available in various state or federal filings, and most of its contributions are made via a political action committee, or PAC, funded by voluntary employee donations, not corporate cash. Outback's is one of the country's biggest corporate PACs, having doled out more than $1.6-million in the 2003-04 election cycle, and it primarily supports Republican or probusiness causes.

"I think if you look at some of the groups that are proposing these things, the reality is, they have a (political) agenda that is often contrary to the corporation's use of funds," general counsel Joe Kadow said Tuesday.

The Jacksonville, Ill., shareholder that proposed the resolution, the Central Laborers' Pension, Welfare and Annuity Fund, operates a $900-million pension fund for union members and owns 30,600 shares of Outback stock, worth about $1.3-million. It is one of 19 institutional investors, including the New York City Employees' Retirement System, that are working with Center for Political Accountability of Washington to promote political corporate-governance mandates.

"We're trying to bring some of this outrageous corporate behavior under control," said Barry McAnarney, executive director of the Central Laborers' fund.

Bruce Freed, co-director of the Center for Political Accountability, said supporters will be lucky if the Outback resolution gets 10 percent of the shareholder vote next month. Only one of the dozens of political-contribution resolutions it has orchestrated during the post-Enron Corp. years has received a majority vote.

But Freed said a 10 percent vote often is enough to open doors to negotiation. The transparency movement appears to be picking up steam. Several large, politically active companies, including drug maker Bristol-Myers Squibb, retailer Staples and beverage companies Coca-Cola and PepsiCo, pre-empted the resolution process in recent weeks by agreeing to abide by its principles. Institutional Shareholder Services, which advises more than 1,600 institutional investors on how to vote on proxies, recently said it would no longer automatically oppose political-contribution resolutions like Outback's.

Issue-conscious investors eventually may use contribution disclosures - or simply a company's willingness to make them - to make more informed investment decisions, much like environmental or workplace policies are used today. Shareholders like Central Laborers' are interested in political contributions whose purpose is inimical to its members' broader goals, such as Outback's financial support last year to opponents of a minimum-wage proposal in Florida and an employer health-insurance mandate in California, much of it from corporate money.

"No, that's what they want you to do," he said.

Information from Times wires was used in this story. Scott Barancik can be reached at barancik@sptimes.com or 727 893-8751.

[Last modified March 22, 2006, 01:58:24]