Anthem (ANTM) or Blue Cross is a healthcare corporation that currently spends literally millions of dollars lobbying Congress and supporting the political endeavors of career politicians to deny patients quality healthcare and comprehensive coverage to millions of other Americans. Our nation currently has an outrageously expensive complicated healthcare system where insurance companies and large healthcare corporations such as ANTM have converted financial power to political power where they refuse to be fully transparent in reporting all of their political contributions and lobbying expenditures so that we, as owners, have no idea of the amount of corporate funds being expended, supposedly, on our behalf.
HII co-filed a shareholder resolution calling for Anthem to fully disclose its lobbying expenses to shareholders. The lead filer is the Sisters of St. Francis of Philadelphia.
Anthem asked the SEC to allow them to exclude the proposal on the grounds that it “dealt with substantially the same subject matter as three previously submitted shareholder proposals that were included in the Company’s 2012, 2013, and 2016 proxy materials, and the most recently submitted of those proposals did not receive the support necessary for resubmission.” Unfortunately, the SEC agreed with ANTM.
Our lead filers responded with a request for staff reconsideration, arguing that the previous proposals sought disclosure of political contributions, not lobbying, and the proposals were clearly not the same.
Despite a very compelling argument, the SEC staff denied the request for reconsideration, thus keeping the proposal off of the 2017 proxy ballot.
Shareholder Resolution 2017
Whereas, we believe full disclosure of Anthem’s direct and indirect lobbying activities and expenditures is required to assess whether Anthem’s lobbying is consistent with its expressed goals and in the best interests of shareholders.
Resolved, the shareholders of Anthem request the preparation of a report, updated annually, disclosing:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Anthem used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Anthem’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of the decision making process and oversight by management and the Board for making payments described in section 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Anthem is a member.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Anthem’s website.
We encourage transparency in the use of corporate funds to influence legislation and regulation. Anthem spent approximately $12.6 million in 2014 and 2015 on federal lobbying. Anthem reports spending $14.1 million in 2014 and 2015 on state lobbying, yet provides no information by state. Anthem’s lobbying on a merger with Cigna has attracted media scrutiny (“Anthem and Cigna Boost Spending on Lobbying as Lawmakers Review Merger,” International Business Times, June 16, 2016).
Anthem belongs to the Chamber of Commerce, which has spent over $1.2 billion on lobbying since 1998. Anthem discloses its trade association dues and amounts of its dues used for lobbying on its website, but this fails to capture all payments despite a 2007 shareholder agreement (“More Firms to Make Political Disclosures,” CFO, April 4, 2007). This loophole allows Anthem to make additional payments beyond dues that can be used for lobbying, yet not be disclosed to shareholders. Anthem has previously made undisclosed trade association payments beyond dues that were used for lobbying (“Insurers Gave U.S. Chamber $86 Million Used to Oppose Obama’s Health Law,” Bloomberg, November 17, 2010). We are concerned that this disclosure loophole presents reputational risks.
We also question if Anthem’s membership in the Chamber is consistent with Anthem’s values. For example, Anthem supports smoking cessation, yet the Chamber has worked to block global antismoking laws (“U.S. Chamber Fights Smoking Laws While Hospitals and Insurers Sit on Its Board,” New York Times, July 1, 2015).