In August, News Corporation – the media company owned by right-wing tycoon Rupert Murdoch and the operator of Fox News – gave $1 million to the Republican Governors Association. Several weeks later, it donated another $1 million to the U.S. Chamber of Commerce.
When asked about the RGA donation, Rupert Murdoch explained: “It had nothing to do with Fox News. The RGA [gift] was actually [a result of] my friendship with John Kasich.” As ThinkProgress’ Ian Millhiser reported, there are laws against corporate managers treating a publicly-traded corporation as if it were their own personal bank account. The Supreme Court in Delaware, where News Corp. is incorporated, has made it clear that “[c]orporate officers and directors are not permitted to use their position of trust and confidence to further their private interests.”
Now, shareholders may be taking notice of the potential illegality outlined by Millhiser. The New York Times reported today that The Nathan Cummings Foundation, a shareholder of News Corp., wrote a letter to the company’s board objecting to the company’s political donations, and warned against the use of “corporate treasury funds to further the personal political agendas of corporate management.” This afternoon, Media Matters obtained a statement from another investor, F&C Investments, which says it will oppose the re-election of the Chairman of the Audit Committee at News Corp.’s annual meeting this Friday in response to the donation controversy. F&C says it, too, is concerned about shareholder money being used to further the political goals of “individuals” within the company:
In response to recent media reports that News Corp. has used shareholder funds to make two $1 million contributions to election-related activity in the United States, F&C has opposed the re-election of the Chairman of the Audit Committee at the upcoming annual meeting this Friday.
“We are concerned to see the company deploy shareholder funds for activities that are best left to the individuals whose views they reflect and are not obviously a business matter for the company,” said Karina Litvack, Head of Governance and Sustainable Investment at F&C. “While it is perfectly reasonable for companies to engage in policy debate on specific matters that affect their business, there needs to be a clear and transparent process to ensure that such activities serve the interests of shareholders. There is no evidence of a political contributions policy or process at News Corp. – and the board does not have an explicit oversight role.”
Murdoch may not understand the potential illegality involved with handing out political donations to advance his personal agenda — but apparently his shareholders do.