GM Asked to Disclose Donations to Nonprofits in Wake of Awards-for-Barra Controversy

Barra Appeal of ConscienceToday I sent the following letter to Theodore Solso, Chairman of the GM Board:

As a shareholder, the National Legal and Policy Center (NLPC) asks General Motors (GM) to disclose all its contributions to charitable and nonprofit organizations by the company, the General Motors Foundation, or any other entity.

This request is prompted by the acceptance of various awards by CEO Mary Barra offered by charitable and nonprofit organizations at the same time some of the groups are recipients of large cash donations from GM.

The company has vigorously publicized these awards, apparently as part of a campaign to promote and rehabilitate Ms. Barra’s image in the wake of the ignition switch recall delay, for which the death toll continues to rise. Unfortunately, this campaign has backfired and resulted in negative publicity for the company.  

On November 10 of last year, we asked the National Women’s History Museum (NWHM) to rescind a planned “Katherine Graham Living Legacy Award,” a request also made by the GM Survivors group. As I pointed out at the time:

Barra’s travel around the country to accept awards has really been unseemly. I hope she will now instead focus on the safety issues before her. Since May, we have repeatedly asked for a recall of SUV’s and light trucks with a brake line corrosion defect, only to be rebuffed by GM.

Even more unseemly has been the acceptance of big bucks from GM by the groups handing out the awards, such as the Detroit Economic Club and the so-called Appeal of Conscience Foundation.

On November 17, NWHM withdrew the award, an event that garnered more media attention than the original award ever would have received.

The controversy continues. This week, in a posting titled “GM’s ‘Award-Winning’ PR Strategy” on the Daily Kanban website, Edward Niedermeyer detailed more instances of GM-funded groups honoring Ms. Barra. He wrote:

Whether serving as a flashpoint for criticism, like the NWHM award or simply appearing to be bought-and-paid-for like the other prizes listed here, Barra’s awards have done nothing to change perceptions of GM. If anything, they merely point out how desperate GM is for any kind of good news, no matter how inconsequential or manufactured. Maybe it’s time for GM to forget about winning awards and get back to winning where it matters: with consumers.

GM’s contributions to charitable and nonprofit groups are a matter of concern to shareholders for the following reasons:

1) The award-centered campaign is counterproductive and is hurting the company’s image.

2) If the contributions were linked to the offering of awards, both GM and the recipient would be in violation of Internal Revenue Service regulations governing charitable contributions. We note for instance, the “Women of Achievement and Courage” award given to Ms. Barra by the Michigan Women’s Foundation in April 2014. Not only did the General Motors Foundation contribute $70,000 to the organization in 2013, but General Motors Foundation was a sponsor of the award event and Deborah Dingell, the President of the General Motors Foundation was the event co-chair.

3) If the campaign is designed not only to enhance GM’s image with the public, but also to strengthen Ms. Barra’s position within the company, it is inappropriate because it is being conducted with corporate assets.

A disclosure of GM’s contributions to charitable and nonprofit groups will allow shareholders to evaluate the information in light of these concerns.

We prefer a voluntary disclosure of all such contributions without delay. Laudably, GM already voluntarily discloses its political contributions.

If this disclosure does not take place in a timely manner, we are prepared to file a shareholder resolution for consideration at the GM annual meeting in June. (Even though the deadline has passed for inclusion in the 2015 proxy materials, we would still have the opportunity to offer such a resolution.)

In previous years, NLPC has sponsored “charitable contribution disclosure” resolutions at the annual meetings of Walmart, Goldman Sachs, PepsiCo, Verizon and several others.

This letter is being copied to the Corporate Secretary with a request that a copy be provided to each GM director, in accordance with GM’s Corporate Governance Guidelines. END LETTER


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