MICHAEL VIRTANEN, Associated Press
ALBANY, N.Y. (AP) — The New York City comptroller has asked a Texas oil company to explain why it has been connected to political donations that appear to have little to do with its energy business.
Comptroller Scott Stringer, investment adviser and trustee to the $150 billion city pension funds, is questioning "both the magnitude and the corporate purpose" behind the Clayton Williams Energy Inc. donations to the National Rifle Association and American Crossroads, a conservative political action committee. He's urging full disclosure to shareholders of all political spending, saying it poses "legal, reputational and operational risks."
"The reported contributions are extremely large for such a small company and seem intended to further the political views of its chairman and CEO rather than the interests of the company itself," Stringer said Monday.
Stringer, a Democrat, was a state assemblyman and Manhattan borough president before he was elected comptroller last year. His letter was emailed and faxed to the company Friday.
The company's chairman, Clayton Williams Jr., was a Republican candidate for Texas governor in 1990. A spokeswoman for the Midland-based company, Patti Hollums, confirmed Monday that the company made aggregate donations of $2 million in 2012 to a charitable organization and a tax-exempt political organization that were disclosed in its earnings and annual reports. She declined further comment.
The oil company was listed among the NRA's corporate partners for a donation of at least $1 million, according to a 2011 report from the Violence Policy Center. In August 2012, the company gave $1 million to American Crossroads, which was formed with help from former President George W. Bush's top adviser, Karl Rove, according to a Federal Election Commission report.
Clayton Williams Energy Inc. recorded $429 million in revenues last year from oil and gas production in Texas, Louisiana and New Mexico and a net loss of $24.8 million, or $2.04 per share, according to its annual report. It reported profits four of the previous five years.
Williams and his family control 51 percent of the stock. The city pension funds own 25,454 shares of the company, worth $3.2 million.
New York City's pension funds have submitted about 55 shareholder proposals for 2014, withdrawing nearly half after reaching agreements with the companies, spokesman Eric Sumberg said. Topics include political spending disclosures, executive pay clawback policies, proxy access, board and workplace diversity and environmental risk management.
About 700 to 800 nonbinding shareholder resolutions are filed annually in the U.S., mostly at large companies. Many focus on shareholder value and management accountability, while others are concerned with social issues like global warming, labor rights or gender equality.
Concern about corporate political donations has grown since the U.S. Supreme Court's 2010 ruling in the Citizens United case that lifted restrictions on independent spending by corporations, said David Yermack, a professor at New York University's Stern School of Business.
"If the company is donating to the NRA it's perfectly reasonable for the shareholders to ask for a report on political donations," Yermack said. "If it's his private money that's not really a proper topic — what people do with their own money on their own time."