Political Giving and Activity Policy
Customers, community groups, political organizations and others regularly approach Phillips 66 to support civic and political activities. Management and the Phillips 66 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 federal, state and local laws govern corporate involvement, political or public policy activities. These statutes contain numerous prohibitions, detailed reporting and recordkeeping requirements and enforcement provisions. Phillips 66 may be asked to participate in activities that fall under the jurisdiction of one or more of these statutes, and the company has established policies and guidelines to ensure corporate compliance with these laws and regulations.
These policies and guidelines cover U.S. domestic political activity and are not intended to cover the international political, legal and business issues that apply to U.S. corporations and their foreign affiliates. Other company policies cover company compliance with other U.S. laws, such as compliance with the Foreign Corrupt Practices Act. Additionally, the policies and guidelines only apply to situations where employees act on behalf of Phillips 66 and do not apply to personal activities employees participate in at their own cost and on their own time.
All employees involved in corporate political giving or activities certify quarterly their knowledge of and compliance with these policies and guidelines. The company conducts regular compliance system reviews and internal audits to ensure all corporate political contributions and PAC contributions are made in accordance with the law and company policies.
The Public Policy Committee (“PPC”) of the board of directors is responsible for overseeing the company's public policy work and related activities and receives regular reports. Management of our participation in such activities is the responsibility of the Executive Vice President, Legal and Government Affairs, General Counsel and Corporate Secretary, who reports directly to the CEO. Phillips 66 assesses its political policies on a regular basis and in light of changes in federal, state and local lobbying, ethics and campaign finance laws and regulations. Phillips 66’s political spending reflects our interests as a company and not those of any individual director, officer or employee.
Phillips 66 believes it is in the best interest of the company to participate in the political process and engage on the issues critical to our business including support of pro-energy and pro-business policies at the federal, state and local levels. For Phillips 66 business purposes, issue advocacy supports a business position essential to the company. In all company advocacy activities, Phillips 66 is committed to the highest standard of ethical conduct, compliance and transparency.
Phillips 66 actively participates in the political process through legally authorized financial contributions to candidates and organizations through corporate funds and the Phillips 66 PAC. All contributions strictly adhere to federal and state laws. Contribution determinations follow established guidelines and are made on a bipartisan basis without regard to the political affiliations or views of any individual Phillips 66 employee at any level across the organization.
Criteria considered in determining whether to support a candidate include:
- Position on issues affecting the business community and energy industry.
- Integrity and character of the candidate.
- Holding of a leadership position in his/her party or presence on a key committee or the likelihood of the candidate's attaining such position in the future.
- Relationship with or representation of an operating facility or company operations.
- Nature and strength of the candidate’s opposition.
The responsibility to approve and administer contribution requests has been delegated by the PPC to the company officer responsible for Government Affairs or his or her designee. Accordingly, the vice president of Government Affairs, upon advice from legal counsel, must approve all requests for state and local corporate political contributions. A listing of corporate political contributions is published (beginning in 2020, is published semi-annually) annually. Current cycle corporate contributions to candidates can be here (PDF). An archive of the prior four years of corporate contributions to candidates can be viewed here (PDF ). Corporate political contributions made by the company and Phillips 66 PAC are regularly reported to the PPC.
Federal Campaign Contributions
Federal laws strictly forbid the giving or use of corporate funds for candidates campaigning for federal office. The company has procedures in place to ensure compliance with these prohibitions.
State and Local Campaign Contributions
State and local laws govern contributions to candidates running for office in their specific jurisdictions. The PPC has authorized a strict process for the justification, approval and reporting of any corporate political contribution made in states where allowed by law and has set a budget for such contributions.
Phillips 66 PAC
Phillips 66 is authorized under law to establish an employee political action committee and fund administration costs. Consistent with approval of the PPC, Phillips 66 offers eligible employees an opportunity to make voluntary contributions to the Phillips 66 political action committee (the “Phillips 66 PAC”), which supports candidates for federal, state and local offices where permitted by law. Phillips 66 PAC is registered with the Federal Election Commission (“FEC”), and its contributions are reported to the FEC on a monthly basis.
The Phillips 66 PAC has its own board of directors (“PAC Board”), which is composed of a broad cross-section of company employees. The PAC Board approves all PAC contributions which contributions are primarily focused on direct support of candidates for office. The PAC Board applies the company’s established nonexclusive criteria for selecting candidates to support with PAC contributions.
The PAC Board may elect to make state and local contributions in states where corporate contributions are not allowed, subject to applicable laws. Phillips 66 PAC contributions to federal, state and local candidates may be found on the FEC website here.
Other Politically-Related Requests
Phillips 66 periodically contributes to ballot initiatives, get-out-the-vote activities, independent expenditure committees and entities organized under section 527 of the Internal Revenue Code (also known as 527 organizations). Phillips 66 may also participate in state or federal political party conventions and inaugural events. Any of these politically related requests requires the review and approval of Government Affairs, after consultation with Legal. A listing of all such contributions is published annually. 2019 contributions to political in nature organizations can be viewed here (PDF). This list includes any 501c(3) organization that develops model legislation.
Gifts to Elected Officials, Regulators and Government Employees
Federal law generally prohibits registered federal lobbyists and those entities that employ federal lobbyists, such as Phillips 66, from providing gifts or anything of value to members of Congress or congressional staffers. Separate and similarly strict gift rules apply to the executive branch of the federal government. Additionally, states and localities have various types of gift rules. Any gift to an elected official or government employee made on behalf of Phillips 66 must comply with the applicable gift rules and receive prior approval under the Phillips 66 Gifts, Entertainment and Travel Policy.
Phillips 66 engages in lobbying at the federal, state and local levels to advocate on issues that impact our company and industry. Priority issues are aligned to the company’s Strategic Priorities and include environmental, tax, and energy infrastructure issues. Federal, state and local statutes govern the definitions of lobbying activities, corporate engagement in such activities, and reporting requirements
Phillips 66 complies with federal Lobbying Disclosure Act (“LDA”) regulations by filing quarterly reports on lobbying activities and expenses and semi-annual reports on contributions. The reports may be found on the U.S. Senate Lobbying Disclosures Act databases portal.
Phillips 66 reported the following amounts for federal lobbying over the last four years - $3.48 million in 2019, $3.8 million in 2018, $3.6 million in 2017 and $4.3 million in 2016.
Phillips 66 also files periodic reports with state and local agencies reflecting lobbying activities as required by relevant state and local laws. Phillips 66 conducts lobbying activity in the following states (note, where possible links are provided directly to company filings, however some states require the use of a search tool to locate the filings):
Phillips 66 actively engages with trade associations at the national, state and local levels. We encourage our employees to represent the interests of the company and the communities in which we operate through participation in committees and/or leadership roles in these associations.
Where the dues paid by Phillips 66 to a trade association total $50,000 or more annually, we make a reasonable effort to obtain from the trade association that portion of the company's dues used by the trade association for lobbying expenditures or political contributions. This information is updated annually. View 2019 trade association memberships of $50,000 or more here (PDF).
Trade associations provide technical expertise and set standards to improve industry operations, in addition to advocacy. On the advocacy side, they cover a range of issues and Phillips 66 prioritizes engagement on issues relevant to our business. Participation in these associations is important to the company’s role as an industry leader and as an active member of the business communities in which we operate. As a trade association member, we seek to advance collaborative and constructive approaches to industry engagement with policymakers and other stakeholders to advance sound public policy.
Company participation in trade associations, including membership on a trade association board, does not mean that the company agrees with every position a trade association takes on an issue and from time to time our corporate positions may differ from those of the trade association of which we are members. We recognize that as trade association members there can be viewpoints that differ from ours. When this occurs, we seek to work with the association membership to promote reasonable compromise on major initiatives affecting our business and our stakeholders.
Grassroots activities, such as mobilizing employees or gathering signatures, are designed to supplement lobbying efforts in influencing officials on legislation important to the company. Phillips 66 participates in grassroots activity on a case-by-case basis as determined by appropriate Government Affairs and business unit personnel. The company’s grassroots activity typically includes the development and distribution of information and mobilization of stakeholders.
Phillips 66 engages in ballot initiatives, provided there is a compelling Phillips 66 business interest and support from the interested business units, Government Affairs, and management. When a decision is made to engage in a ballot initiative, the company may develop and distribute information to employees and stakeholders in support of or opposition to a particular measure.
Independent expenditures are funds given or expended to directly support or defeat a candidate, without collaboration with or by the candidate. Phillips 66 may participate in independent expenditures that support a compelling business priority, on a case-by-case basis, as determined by the vice president of Government Affairs and the interested business unit and subject to Legal concurrence and interested Executive Leadership Team member or CEO approval. View 2019 independent expenditure spending here.