The political process significantly impacts Norfolk Southern through government policies, legislation, and regulatory decisions. As a result, our board of directors believes that it is in the best interests of Norfolk Southern and our stockholders for the Corporation to participate in the political process by engaging in a government relations program.
The government relations program seeks to educate and inform public officials about issues important to our business, and it supports public officials and candidates whose views match those of Norfolk Southern. By doing so, Norfolk Southern furthers public policy goals that are consistent with our business and values.
Part of our government relations program includes participating in the political process in the United States through political contributions. This report describes and lists political contributions and expenditures made by Norfolk Southern and contributions made by the Norfolk Southern Corporation Good Government Fund (GGF). Norfolk Southern maintains a compendium of procedures for making these political contributions. Members of Norfolk Southern’s government relations and law departments, as well as an external provider of campaign finance compliance services, monitor all political contributions for compliance with these procedures. This report further describes certain nondeductible payments to trade associations, chambers of commerce, and other tax-exempt organizations.
We anticipate that we will update this voluntary disclosure twice a year and publish it on our corporate website.
CORPORATE CONTRIBUTIONS TO CANDIDATES, COMMITTEES, AND POLITICAL ORGANIZATIONS
Although federal law prohibits companies from contributing to candidates for federal office, many states allow corporate contributions to state and local candidates, committees, and political organizations. Our board of directors has authorized the Corporation to contribute to state and local candidates for public office, political committees and political parties, and for other political purposes, subject to any legal limitations and applicable reporting requirements, up to $500,000 annually for 2016 and 2017. The amount of the board’s authorization varied in prior years. We make political contributions when we determine them to be in the best interests of the Corporation. These contributions are made according to the following procedures:
• at least two authorized individuals initiate a contribution recommendation;
• the recommendation is reviewed and approved by an attorney in the law department;
• the recommendation is reviewed and approved by the vice president law; and,
• a check is drawn against a separate account maintained and funded solely for the purpose of making such contributions and signed by two authorized individuals.
Click here for a list of the Corporation’s contributions made during the first half of 2017 to state and local candidates, political committees, and tax-exempt political organizations. During 2016 and the first half of 2017, the Corporation did not make any payments to influence the outcome of ballot measures, nor did it make any independent political expenditures to support or oppose any candidate or political party.
NORFOLK SOUTHERN CORPORATION GOOD GOVERNMENT FUND
Norfolk Southern also has established a separate segregated fund under federal law, the Norfolk Southern Corporation Good Government Fund (GGF). The GGF is a nonpartisan political fund that provides financial support to candidates and office holders whose views match the interests of Norfolk Southern. The GGF is funded entirely through voluntary contributions from eligible contributors, primarily from NS employees who meet certain eligibility requirements. By law, Norfolk Southern is prohibited from favoring or disadvantaging any person by reason of the amount of their contribution or the decision not to contribute to the GGF, and coercive GGF solicitations are strictly prohibited.
The GGF is governed by a steering committee consisting of NS employees, and GGF contributions are made according to the following procedures:
• at least two authorized individuals initiate a contribution recommendation;
• the recommendation is reviewed and approved by an attorney in the law department; and,
• a check is drawn against the GGF’s account and signed by two authorized individuals.
Click here for a list of the GGF contributions made during the first half of 2017 to federal, state, and local candidates, and political committees.
PARTICIPATION IN TRADE ORGANIZATIONS
Norfolk Southern participates in rail industry trade associations, chambers of commerce, and other trade organizations. These organizations promote collaboration among the members and provide a forum to allow the members to focus on issue advocacy and promote best practices in safety, operations, and business. Among many other benefits, membership typically provides Norfolk Southern employees with the opportunity to participate in educational and public relations activities, industry conferences, and networking opportunities.
The trade organizations in which we participate may engage in lobbying activities. We work with the other members to ensure that lobbying conducted through trade organizations reflects our values and concerns. If a trade organization adopts a position that is harmful to the interests of Norfolk Southern, we will post a statement on our website that we disagree with the trade association’s position.
Norfolk Southern makes reasonable efforts to track and report payments made to trade associations, chambers of commerce, and other tax exempt organizations that may be used for political purposes that would not be deductible as defined under Section 162(e)(1) of the Internal Revenue Code. Click here for a list showing the Corporation’s nondeductible payments to trade organizations, chambers of commerce, and tax exempt organizations (other than the tax exempt political organizations included on the Corporation’s contributions list available above), where the nondeductible payments exceeded both $10,000 and 10 percent of the tax-deductible amount that the Corporation paid to the organization in 2016.
COMPLIANCE IN THE GOVERNMENT RELATIONS PROGRAM
Norfolk Southern is committed to compliance with all applicable laws relating to our involvement in the public policy and political process. All financial contributions adhere to federal, state, and local laws regarding contribution limits on amount and source, criteria, and reporting requirements. No contribution will be made in anticipation of, in recognition of, or in return for an official act by the recipient of the contribution.
All political spending reflects the Corporation’s or the GGF’s interests, and not those of individual officers or directors. We recognize that political candidates, office holders, and trade organizations may support positions that align with some of Norfolk Southern’s interests but conflict with other interests. In these instances, we base our involvement on those areas of mutual agreement that we believe will have the greatest benefit to our Corporation.
Contributions by the GGF and the Corporation to political candidates are a matter of public record, and the most current information is available to interested parties through sources such as the Federal Election Commission and state campaign finance reports.
Political contributions reflect one dimension of participation in the political process. To advocate our position, the Corporation relies on government relations professionals, assisted as needed by subject-matter experts. Norfolk Southern has adopted a corporate procedure that provides that only authorized employees and contract lobbyists may engage in lobbying activities, as defined by the appropriate jurisdiction, on behalf of the Corporation. In addition, the procedure requires a Corporation employee who has engaged in lobbying on behalf of the Corporation to report the time spent on such lobbying, and any associated expenses, immediately following the close of the calendar quarter in which such lobbying occurred. The procedure further requires that persons who engage in lobbying on behalf of the Corporation comply with all applicable legal requirements.
Federal and state law requires Norfolk Southern to report expenditures associated with activities that support lobbying. It is the responsibility of employees engaged in these activities to report their time at the required reporting intervals. Information on these activities and associated expenditures is available for public inspection on the U.S. House of Representatives website. The quarterly lobbying disclosures available on the website disclose lobbying expenses for each calendar quarter rounded to the nearest $10,000, as required by the instructions for filing the reports. For 2016, Norfolk Southern reported expenses on its quarterly federal lobbying reports using the Lobbying Disclosure Act method; however, if the tax method was used, Norfolk Southern’s corporate political contribution and lobbying expense for 2016 totaled approximately $4,610,000. This total includes the following, among other items: the dollar value equivalent for the time Norfolk Southern employees spent on lobbying activities (including time spent preparing for lobbying activities, even if they did not actually lobby with respect to a particular issue); the amount attributable to federal, state, and grassroots lobbying by Norfolk Southern’s outside consultants; corporate political contributions for the year that are disclosed above; and the portion of trade association dues that Norfolk Southern is advised are used for lobbying activities.
OVERSIGHT BY THE BOARD OF DIRECTORS
As part of its oversight role, the Governance and Nominating Committee of the Corporation’s Board of Directors reviews, at least annually, the Corporation’s political contributions, including spending related to trade associations and other tax-exempt organizations.
You can obtain a spreadsheet showing the contributions for prior years by clicking on the applicable link below:
- 2016 – Corporate and GGF contributions
- 2015 – Corporate, GGF and trade association contributions
- 2014 – Corporate, GGF and trade association contributions
- 2013 – Corporate, GGF and trade association contributions
- 2012 – Corporate, GGF and trade association contributions
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