An activist investor has called on IBM to report on its lobbying practices, which he alleges include spending “dark money” with organizations that campaign against climate change reporting and legislation.
Ahead of IBM’s annual meeting of stock owners on April 29, John Chevedden, a Big Blue stockholder and activist investor, this week filed a letter via the Securities and Exchange Commission calling on fellow investors to back a proposal pushing for IBM to “improve” its disclosure of lobbying, both directly to government and, allegedly, via “dark money.”
The letter describes IBM’s lobbying disclosure as inadequate and a risk to shareholders. “Dark money” spending through trade associations and social welfare groups presents unknown risks, he claims, urging IBM to provide details of its lobbying in an annual report to shareholders.
For example, IBM is a member of Business Roundtable, which has opposed the Securities and Exchange Commission’s climate risk disclosure rules. IBM is also a member of the Chamber of Commerce, which is reportedly a “central actor” in dissuading climate legislation over a two-decade period.
Publicly, IBM says it wants to mitigate the risk of climate change. In its 2023 Environmental, Social and Governance (ESG) report, it said that IBM had for decades been “committed to addressing climate change through the company’s energy conservation and climate protection programs.”
Rules around spending on trade associations mean companies can give unlimited amounts to third party groups that themselves then spend millions on lobbying and often undisclosed grassroots activity, the letter argues.
Chevedden writes:
The Register has offered IBM the opportunity to comment.
In lobbying to US Federal Government, IBM spent $78.2 million from 2010 to 2024, and $22.2 million from 2021 to 2024, the letter says.
However, lobbying at a state level is less transparent. Chevedden’s letter says 98 percent of the S&P 500 failed to disclose state-specific lobbying totals to stockholders, according to a 2023 study. In California alone, where disclosure is mandated, IBM spent $1.28 million from 2010 to 2024 on lobbying, it adds.
“IBM’s current lobbying disclosures are inadequate to protect stockholder interests,” the letter claims.
Chevedden has spent decades pressuring the US corporate giants including General Motors, eBay, and Google on their governance. Although critics argue such tactics are a waste of time, his proposals have won shareholder support at Netflix and Texas Instruments, according to reports.