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News Corp Shareholders Object To Political Donations

Reported by Ellen - October 13, 2010 -

Two institutional investors in News Corp. have spoken out against its million dollar political donations to the Republican Governors Association and the U.S. Chamber of Commerce. One shareholder, F&C Investments has announced that it will vote against the re-election of News Corp's audit committee chairman because of the lack of transparency and oversight.

The New York Times reported, "The Nathan Cummings Foundation, which promotes progressive causes, (and) owns 3,820 shares of the News Corporation, with a value of about $52,000... (is calling) for complete disclosure of all political spending by the News Corporation before Friday, when the company’s board of directors meets for its annual shareholders meeting." The Times quoted a letter from Nathan Cummings officials to the News Corp board: “The apparent lack of a strategic rationale for News Corp. raises very serious concerns for shareholders as to whether Mr. Murdoch and the rest of the News Corp. Board of Directors are truly taking shareholder interests into account when they approve political payments made with shareholders’ assets.”

As Think Progress noted, there are laws against corporate managers using corporate funds to further their personal agendas. CEO Rupert Murdoch's statement that the donation to the RGA "was actually [a result of] my friendship with John Kasich." may indicate that the donation was illegal.

As the Financial Times reported (h/t Media Matters),

“We are concerned to see the company deploy shareholder funds for activities that are best left to the individuals whose views they reflect and are not obviously a business matter for the company,” said Karina Litvack, head of governance and sustainable investment at F&C.

She told the FT that F&C held almost 78,000 shares in News Corp, a stake worth about $1.1m in a company with a $36.5bn market capitalisation, and that it had been a long-term shareholder. “We’re not the kind of investor that buys into a company to make a point,” she said.

...Ms Litvack said it was concerned principally about the apparent lack of a policy governing political contributions or board oversight for donations at News Corp. “I think companies do need to be involved in the political process, but it needs to be transparent,” she said.

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