Corporate Disclosure Bill Goes to President Without Philanthropy Disclosure Requirements
by Kay Guinane, 7/26/2002
In the wake of the widening corporate accounting scandals, both the House and Senate have passed versions of corporate accountability and reform legislation and a conference committee hammered out the differences, sending the bill the to the President on July 26. The conference agreement re-named the legislation the Sarbanes-Oxley Act of 2002, after its primary sponsors in each house. The final bill does not contain the philanthropy disclosure requirements from the original bill in the House. As reported in a previous Watcher, on April 24, the House passed the "Corporate and Auditing Accountability, Responsibility, and Transparency Act" (H.R. 3763), while the Senate passed its version (S. 2673) July 15th. The House version was of most interest to the nonprofit community, as it contained a provision charging the Securities and Exchange Commission with developing rules that require a corporation to report contributions to a nonprofit organization if any of the corporation's directors or members of their immediate family are members of that nonprofit's board. This would have applied to contributions over $10,000 made by the corporation or any officer of the corporation in the last five years, as well as any other activity that provides a "material benefit" to the nonprofit, including lobbying. While OMB Watch supports disclosure, there were technical problems with this legislation. There have been several recent high profile cases of corporations giving large donations to corporate officers' pet causes (such as Enron giving large donations to a hospital chaired by a member of its audit committee) as well as an increase in "strategic philanthropy" where corporations give money to nonprofits that work to advance their business interests (for an excellent article on groups tracking this type of giving see this page). We'd like to hear your input. If you have an example of a corporation using undisclosed donations to influence the policies of a nonprofit, or to use an ostensibly independent nonprofit to further its business goals (for example, Citizens for Better Medicare), please post it for discussion in our forum.