The success of GE depends significantly on sound public policies in the U.S. at the national, state and local levels. Governments, through advancing their legitimate regulatory and political interests, affect the environment in which GE operates. Every day, issues vital to GE’s ability to recognize value for the Company’s stakeholders are debated and decided in the U.S. Congress, in state legislatures and in local forums across the country—issues such as trade, taxes, energy, healthcare, environment and legal liability, to name a few. That is why GE participates in the political process through contributions from the GE Political Action Committee (GEPAC) and through Company contributions, where legal and appropriate under state and local law.
GE and GEPAC make bipartisan contributions to political candidates and initiatives that support strong public policy, promote sustainable growth and robust markets, and, at the same time, promote innovation and the interests of the industries in which GE operates. In making contributions, we naturally evaluate a candidate’s position on issues of concern to the Company. Our contributions, however, are not based on the personal preferences of individual Company leaders. We base our contribution decisions on the best interests of the Company, and on what we believe is sound public policy, and, in the United States, on what we believe to be the best interests of the United States. Among the factors that we consider in determining which candidates and initiatives to support, GE and GEPAC representatives balance the views promoted by a candidate, the quality and effectiveness of the candidate or organization to which the contribution is made, and the appropriateness of the level of involvement of GE in a given election. With respect to particular candidates, the Company considers, among other factors:
- The personal characteristics of a particular candidate (including the candidate’s integrity and effectiveness)
- Whether the candidate sits on a committee that addresses legislation affecting GE businesses or the global economy
- Whether the candidate represents a state or district within which a GE business operates or is located
- The candidate’s committee standing and ranking
- The candidate’s elected political leadership position and voting record
As part of its oversight role in public policy and corporate social responsibility, the Governance and Public Affairs Committee of the Board of Directors reviews annually the Company’s policies and practices related to political contributions, contributions to campaigns, and contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. The Governance and Public Affairs Committee also receives and reviews, semiannually, reports on the Company’s political spending, including political contributions and contributions to trade associations and other tax-exempt and similar organizations that may engage in political activity. The Governance and Public Affairs Committee will approve in advance an annual contributions budget and issue a report annually on the Company’s political spending.
U.S. law prohibits companies from contributing to candidates for federal office, but many states allow corporate contributions to state and local candidates, committees, political organizations and ballot-issue campaigns. As described in the Company’s Code of Conduct, The Spirit & The Letter, any contribution of Company funds or other assets for political purposes in the U.S. must be approved in advance by the GE Vice President & Senior Counsel, Government Affairs & Policy. GE’s compliance counsel works to ensure that contributions comply with the spirit and letter of applicable laws and regulations. Political contributions made with Company funds outside the U.S. must be approved by the GE Vice President & Senior Counsel, Government Affairs & Policy. GE’s foreign political contributions are currently limited to Canada. GE believes that it is important for its employees to be informed about public policy issues, and, consistent with applicable law, will not take any adverse employment action against an employee on the basis of his or her personal political affiliation or lawful political activity.
GE has established the Corporate Oversight Board, comprising designated senior executives within the Company, including GE’s Senior Vice President & General Counsel, and GE’s Senior Vice President & Chief Financial Officer. The Corporate Oversight Board meets on a regular basis to review GE’s expenditures and ensure that controls are in place for compliance with its political spending policies and that the expenditures and activities advance GE’s objectives. GE’s political contributions are overseen by a multifunctional team comprising senior executives and representatives from Government Affairs & Policy, Legal, Finance and other relevant functions. The relevant state government affairs regional manager, corporate finance manager, government compliance counsel and the Vice President & Senior Counsel, Government Affairs & Policy review and approve all corporate political contributions. Contributions over $5,000 may not be made without the approval of the Corporate Oversight Board.
In 2016, GE contributed approximately $750,000 to political candidates; political organizations such as governors’ associations and state political parties; gubernatorial inaugural events; and ballot initiatives. The recipients and amounts of those contributions are detailed in our political contributions report. All contributions are reviewed for adherence to Company policy as described above. GE also belongs to a number of trade associations at the national, state and local levels. GE asks our trade associations to identify the portion of GE’s payments used to fund independent expenditures expressly advocating for or against candidates in elections for public office. We will include in our political contributions report any responses we receive to such requests. Further details are below in the “Associations” section.
As one of the largest and most diverse companies in the world, GE belongs to many associations and coalitions in which we work with our industry partners and represent our Company’s interests. In some cases, these associations and coalitions engage in advocacy at the state and federal levels. While we generally are in agreement with the positions the associations take on public policy issues, membership in a particular trade association does not indicate agreement with all of the association’s views. Occasionally, these associations take positions that differ from ours. In those cases, we engage with the associations to express our views. In addition, for each association from which GE receives a notice stating that the association has spent or will spend $25,000 or more of GE payments in a fiscal year on nondeductible lobbying and/or political expenditures under Internal Revenue Code Section 162(e), we will ask the trade association to identify the portion of those payments used to fund independent expenditures expressly advocating for or against candidates in elections for public office. We will include in our political contributions report any responses we receive to such requests.
GE has a long-standing practice against using corporate resources for the direct funding of independent expenditures expressly advocating for or against candidates in elections for public office. However, as third-party groups and individuals have an increasing influence in the political and policy arenas through massive independent expenditure campaigns, GE and other businesses are considering alternatives to effectively represent our businesses and employees on key issues like tax and trade. GE continues to abide by its present policy against direct funding of independent expenditures until further notice.
GE has been involved with political action committees so that GE employees, acting together, can support candidates who share the Company’s interests, values and goals. GE employees manage GEPAC in a way that is completely consistent with the Company’s commitment to integrity.
GEPAC is an independent, nonpartisan, voluntary fund supported by GE employees who choose to participate in the political process by pooling their resources to support the candidacy of candidates who share the values and goals of the Company and its employees. GEPAC raises voluntary contributions from eligible GE employees and supports candidates for the U.S. Senate and House of Representatives, and selected candidates in state elections. In addition, contributions to certain national party organizations are made when appropriate. GEPAC also makes contributions to certain state-office candidates, so long as federal PAC contributions to state-office candidates are permitted in accordance with state laws. These states currently include Ohio, Pennsylvania, Wisconsin, Kentucky, North Carolina, South Carolina and Texas.
A committee made up of employees nominated from GE businesses and corporate components directs contributions. The GEPAC Board sets overall budget targets, and day-to-day decisions are delegated to a subcommittee of the GEPAC Board. GEPAC retains counsel to ensure compliance with the spirit and letter of all applicable laws and regulations.
In 2016, GEPAC raised just over $1.65 million from more than 4,000 employees. This amount includes $32,000 contributed by 82 employees directly to GEPAC–Federal, a separate PAC supported exclusively by GE employees who are subject to the U.S. Securities and Exchange Commission (SEC), Municipal Securities Rulemaking Board (MSRB) and/or other rules that affect political contributions by certain financial professionals. GEPAC and GEPAC–Federal contributed $1.37 million to candidates and committees in federal elections. GEPAC contributed $148,000 to candidates and committees in state elections in the United States. The Federal Election Commission (FEC) regulates the activities of GEPAC and GEPAC Federal. Reports detailing these activities are available on the FEC website, http://www.fec.gov.
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