General Comments
Customers, community groups, political organizations and others regularly approach ConocoPhillips to support civic and political activities. Management and the ConocoPhillips Board of Directors encourage involvement in activities that advance the company’s goals and improve the communities where we work and live.
A number of state and federal laws exist that govern corporate involvement in activities of a political or public policy nature. These statutes contain numerous prohibitions and detailed reporting and record-keeping requirements. They also contain enforcement provisions that carry civil and criminal penalties for noncompliance. Employees may be asked to participate in activities that unknowingly fall under the jurisdiction of one or more of these statutes.
The policies and guidelines below have been approved by the Public Policy Committee of the Board of Directors and are intended to help ensure corporate compliance with these laws and regulations.
These policies and guidelines deal primarily with U.S. political activity, and are not intended to cover the many global political, legal and business issues that apply to U.S. corporations and their international affiliates. Country rules and U.S. rules, such as the Foreign Corrupt Practices Act, are covered under other policies. Additionally, these policies and guidelines only apply to situations where employees are asked to act on behalf of ConocoPhillips and do not apply to personal activities employees choose to fund or pursue on their own time.
Further information or related questions about these guidelines should be addressed to:
- Steve Meadows, VP, State Government Affairs
Federal Political Campaign Contributions
Federal laws strictly forbid the use of corporate funds for candidates campaigning for federal office, such as Congress. These laws apply to actual candidate campaigns and to solicitations from third parties, such as external political action committees, whose purpose is to help elect federal candidates.
ConocoPhillips is authorized under law to establish an employee political action committee (PAC) and fund the cost of administration. Consistent with approval of the Public Policy Committee, Spirit PAC has been formed to facilitate contribution of employee funds to federal candidates as well as state and local candidates. For a complete listing of contributions made by Spirit PAC in 2008, click here (1MB .PDF document).
The 10-member Spirit PAC Board of Directors has established in its Operating Guidelines the following criteria for selecting candidates to support:
Consideration should be given based on criteria established in the ConocoPhillips Spirit PAC Articles of Organization, including:
(a) The integrity and character of the candidate;
(b) The candidate’s holding of a leadership or policy position in his party or on a standing committee of the Congress, or the likelihood of the candidate’s attaining such position in the future;
(c) The candidate’s position and/or voting record on issues affecting the relationship of business and government and on economic and social questions of importance;
(d) The candidate’s relationship or representation of an operating facility or company operations;
(e) The nature and strength of the candidate’s opposition in primary or general elections; or
(f) Other sources of financial assistance available to the candidate.
In addition, it is recommended that the Spirit PAC Board of Directors concentrate on contributions that go direct to candidates for office, generally avoiding:
(a) Independent expenditures in support or opposition to a candidate;
(b) Out-of-election-cycle contributions;
(c) Contributions to Presidential campaigns;
(d) Contributions to leadership PACs;
(e) Contributions to political parties; and
(f) Large contributions to trade association PACs.
State & Local Political Campaign Contributions
Individual state laws govern contributions to candidates running for election to state and local offices. The Public Policy Committee has authorized a strict process for the justification, approval and reporting of any corporate political contributions made in states that permit corporate contributions. The Public Policy Committee also sets a bi-annual budget for corporate contributions in the U.S. and Canada.
The guidelines for determining whether a corporate political contribution is made to a candidate are the same as the political action committee above, including those contributions to be avoided.
The responsibility to approve and administer contribution requests has been delegated to corporate officer responsible for government affairs or his designee. Accordingly, the Vice President, State Government Affairs and Legal must approve all requests for U.S. contributions. A list of corporate political contributions made during the 2008 election cycle can be viewed here (168KB .PDF document).
The Spirit PAC Board of Directors may elect to make state and local contributions in states where corporate contributions are not allowed subject to applicable laws and PAC operating guidelines.
Candidate Fund Raising Events and Other Politically-Related Requests
Candidates and their supporters hold social activities as political fundraisers. Recognizing federal and many state laws impose restrictions, corporate funds for these activities require prior review and approval of Government Affairs and Legal.
ConocoPhillips does, from time to time, contribute to ballot initiatives, party get out the vote activities and partisan organizations such as the Democratic and Republican governors associations. These, too, require review and approval of Government Affairs and Legal. A listing of all such contributions made in 2008 can be viewed here.
Contributions to Other Political Action Committees
Many industry and special interest groups have created their own political action committees to elect candidates to office. State and national petroleum marketing associations, for example, are beginning to create PACs and are soliciting members and suppliers. Corporate contributions to these PACs are strictly prohibited under ConocoPhillips policy. This includes the expensing of any costs for events such as golf and fishing tournaments, hunts, dinners silent auctions and other types of activities used to raise funds.
Gifts to Elected Officials and Regulators
A gift ban rule exists at the federal level prohibiting a corporation from giving a gift to a member of Congress in excess of $50. This includes appreciation gifts, items for display in his or her office as well as tickets to sporting or other events. Of particular note, it also includes meals and lodging. While the rules provide for selected exceptions, great care is required to ensure compliance. Additionally, varying state laws exist with some states such as California having very strict gift prohibitions and reporting requirements.
Any gift to an elected official on behalf of ConocoPhillips must comply with the gift ban rule and receive prior approval from Government Affairs.
Lobbying-related Activities
Federal and state statutes govern corporate lobbying activities. These statutes require activities and expenses associated with working legislative and regulatory issues be reported regularly and in prescribed ways.
While the Federal Lobbying Disclosure Act exempts infrequent contacts with lawmakers, advance consultation with Government Affairs is essential to confirm the ground rules for these discussions and proper reporting. Consultation with Government Affairs is also required for contacts with state officials. This is especially important given the wide variation in rules from state to state.
Additionally, ConocoPhillips employees should refrain from the following activities at the state or federal level without prior internal consultation and approval.
- Agreeing to share in the costs of retaining a firm or individual to work a regulatory nor a legislative issue.
- Agreeing to join an association or coalition whose purpose is to influence a regulatory or legislative issue.
- Lending ConocoPhillips’ name to any effort to endorse or oppose a pending legislative or regulatory issue.
Grassroots Activities
Grassroots activities are designed to supplement lobbying efforts in influencing officials to take favorable action on legislation important to the company. Actions typically include the development and distribution of information and mobilization of stakeholders to contact officials. ConocoPhillips will participate in grassroots activity on a case-by-case basis based on collaboration between appropriate Government Affairs and business unit personnel.
Issue Advocacy
For ConocoPhillips business purposes, issue advocacy is the support of a pro-energy and/or pro-business position regarding a ballot initiative to be voted on by the people. Issue advocacy may also include support of an initiative that would defeat anti-energy and/or anti-business issues. Actions typically include development and distribution/broadcasting of information either jointly or solely. ConocoPhillips will be active in such issues, provided: there is a compelling ConocoPhillips business rationale; there is an agreement to participate between the affected business units and Government Affairs personnel and management; and there is significant ConocoPhillips and/or oil industry involvement, input and approval of the message development and the tactics taken in the initiative process.
Independent Expenditures
For ConocoPhillips purposes, independent expenditures are defined as those funds given or expended to directly support or defeat a candidate, without collaboration with the candidate. ConocoPhillips’ policy is to specifically avoid independent political expenditures. However, if a compelling business purpose exists, an exception may be possible with the consent of Government Affairs, business unit personnel and Legal. Approval of the Public Policy Committee is also required.
Contributions to Political Parties
Contributions to national parties by a corporation are illegal. Any such requests should be forwarded to Government Affairs given the potential for changes in the law and the need to monitor such requests.
Contributions to state parties remain legal, but subject to varying limitations and reporting requirements depending on the state. All requests require Government Affairs and Legal review and approval.
Party Conventions
ConocoPhillips may elect to participate in state or federal political party conventions. Although contributions to political parties at the national level were outlawed by the 2002 Bipartisan Campaign Reform Act, the Federal Election Commission ruled in July 2003 that corporations could make contributions to the presidential conventions held by the parties through the host committees. Any such contribution requires the review and approval of Government Affairs and Legal.
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