Free Enterprise Project Challenges Anti-Second Amendment Corporations

posted on September 12, 2018
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Third of a three-part series

Following the Parkland shooting, the corporate backlash against the NRA and the Second Amendment was quick and decisive. At the Free Enterprise Project, we took the backlash as a call for action. We immediately reallocated resources in order to invest in some of the most egregious and outspoken anti-Second Amendment companies. Then we set out to put those CEOs in the hot seat for lending their voices to a movement seeking to abolish one of our nation’s fundamental rights.

United Airlines CEO Oscar Munoz was one of the most vocal anti-NRA CEOs following Parkland. He was ripe for our type of advocacy.

At United’s annual shareholder meeting in May, I questioned Munoz over the company’s decision to cut ties with the NRA. I said: “I suppose you are ignoring the fact that the NRA had nothing to do with what happened in Parkland and that the perpetrator had zero affiliation with the NRA. But, hey, congratulations on your virtue signaling. What exactly did investors get out of that? The company is willfully giving up money. That’s an odd choice for an airline company in a hyper-competitive industry.” Munoz responded that the company’s decision was not business-related; rather, it was personal.

His “personal” decision garnered some major backlash.

The shooting at Marjory Stoneman Douglas High School in February was a driving force behind much of the recent corporate activism against guns. Business leaders seem to be of the mind that gun laws that infringe on our rights are the answer to crime.

First, at the shareholder meeting itself, many investors thanked me for speaking up on the issue. Afterward, a contributing editor for surveyed United Airlines employees to see if they agreed with Munoz’s stance. By a 4-to-1 margin, the employees he contacted disagreed with Munoz’s response and the company’s decision to drop the NRA discount in the first place. A current United employee summed it up this way: “If it was political then he doesn’t speak for us that do support the NRA. If it was personal, then I suggest he step down since he [can’t] seem to separate personal decisions from business decisions.”

Furthermore, just hours after I confronted Munoz, normally left-leaning CNBC hosted a panel discussion debating the merits of Munoz’s position. The host and most of the panelists all agreed that he was out of line in making such a major business move based on a personal decision, with one panelist stating, “[h]e doesn’t own the company. It’s not Munoz Air.”

All of that fallout came from a simple question.

Shareholder meetings provide a once-a-year forum in which CEOs directly answer questions from their investors. After the corporate backlash following Parkland, gun rights supporters had spoken on television, talk radio, online, and in person about their angst with corporate America’s moralizing and anti-Second Amendment stance, but the CEOs didn’t have to answer to any of that. When I confront them face-to-face, they don’t have a choice.

To attend a shareholder meeting of a publicly traded company, all you need to do is own a single share of stock. That’s it. Anyone with a single share of United Airlines stock, currently trading for about $85 per share, can show up and question Munoz just as I did. The threshold to get into another meeting that I attended was even lower. That’s because Bank of America stock is trading for around $30 per share.

Following the Parkland shooting, Bank of America announced it would no longer lend money to any company that makes military-style firearms. At the bank’s annual shareholder meeting in April, I stated: “[T]he company is joining a list of corporations following the liberal whim of the moment and not looking out for the best interests of long-term shareholders. The company is also lending its voice to those who want to abolish the Second Amendment… Can you tell us – your investors – exactly how much money we stand to lose because of this decision?” CEO Brian Moynihan refused to give any specifics as to how much money the company and its investors stood to lose.

As liberals often do, Moynihan played the victim card. He claimed that many of the bank’s employees and family members were victims of mass shootings in recent years. Even if true, this doesn’t remove his fiduciary responsibility to the bank’s investors, and his excuse was a poor cop-out for what was clearly a politically-motivated decision.

Justin Danhof has been one of the few conservative voices at shareholder meetings this year, but his voiced concerns about the prospect of corporations losing business have fallen on deaf ears. He urges more conservatives to play a more active role at shareholder meetings otherwise the liberals will continue to drown out the voices of conservatives.

Our conservative counterpunch receives attention in part because of its rarity, but also because we have an earnest interest in protecting long-term investors. Thus, Reuters noted: “Moynihan was responding to conservative activist and shareholder Justin Danhof, who said at the meeting that the bank has an obligation to its investors to make profitable loans.”

Bank of America’s “recant” shows the powerful impact of our small dose of pressure. Of course, the bank has a fiduciary responsibility to its investors. Moynihan knows that. But until I confronted him head-on, he didn’t know that any investors would actually hold the company accountable for its reckless “firearm pledge.” 

And it’s just that fiduciary responsibility angle that we also delivered to Dick’s Sporting Goods.

Dick’s had announced that it would no longer sell so-called military-style rifles and that it was raising the minimum purchase age for long guns to 21 from 18. In doing so, the company’s CEO Ed Stack suggested that the decisions might harm overall business. At the company’s June shareholder meeting in Pittsburgh, we confronted Stack.

FEP representative David Almasi said: “Sales are so anemic and relations with gun manufacturers such as Mossberg so poor right now that you’ve even indicated Dick’s might get out the gun business entirely. Meanwhile, Sportsman’s Warehouse reports that their gun sales and net sales were up 15 percent during the first quarter. That company credits consumer backlash against companies such as Dick’s as partially responsible for its success.” Stack responded that he was not going to change his mind and this it is “fine” if gun owners never shop in his stores again.

It appears many gun owners have taken him up on that.

Following the meeting, Dick’s second-quarter earnings indicated serious trouble for the company, and its management was forced to admit that its gun policy was partly to blame. This caught the attention of the Fox Business Network program “Varney and Co.,” which invited Almasi to discuss our Dick’s activism on its program.

The host, Stuart Varney, asked Almasi why we continue to own Dick’s stock if we disagree with the company’s Second Amendment stance. Almasi explained, “[W]e need a voice in the company. And, if our Free Enterprise Project didn’t go to companies like United Airlines and Bank of America and Dick’s Sporting Goods and stand up for the Second Amendment, no one else would.”

But it shouldn’t be that way.

Much of corporate America is no friend to conservative, limited-government-minded Americans. In fact, many corporate leaders are outright hostile to a right-wing worldview.

So when the next inevitable cycle of liberal outrage ensues, and corporations join the fold in attacking one of America’s founding principles, speak up. If you are an investor, use the investor tools that I’ve described. Short of that, call the company’s investor relations and government relations offices. If you are a consumer, vote with your wallet. Call your local stores and speak with the managers. Let them know why you no longer plan to shop at their establishments.

If you have a platform—be it radio, television or online—spread the word. Dozens of liberal groups, representing many hundreds of billions of dollars, are working every day to push the American business community even further to the left.

So the question remains: What are you going to do about it?

This is the third of a three-part series. Check back to for the others. 

Justin Danhof is the general counsel for the National Center for Public Policy Research, as well as director of the center's Free Enterprise Project.


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