Products manufactured by Reynolds American's operating companies are sold, taxed and regulated in all 50 U.S. states. As a result, the companies' businesses can be affected both by laws and regulations that impact the business climate generally, as well as those that specifically govern the manufacture and sale of tobacco products.
Accordingly, the Reynolds American operating companies participate in the political and public policy process in a manner consistent with the law and the interests of their businesses. Contributions to political organizations, candidates, and committees, in the jurisdictions that permit them, and contributions to tax-exempt organizations that advocate public policy positions or engage in lobbying activity are two ways in which RAI and its operating companies participate.
Proposed corporate contributions go through an internal review process to ensure compliance with all applicable laws and regulations, and to determine that they are in the best interests of the RAI companies.
Several evaluation criteria are considered before making a proposed contribution, including:
- The candidate's stated commitment to, or track record of, supporting sound legislative and regulatory approaches to business issues;
- The candidate's interest in and understanding of the legal and regulatory issues related to the RAI companies' businesses;
- The candidate's service on committees having jurisdiction over such issues or in legislative leadership; and
- Whether the candidate represents a geography that includes an RAI operating company facility or a substantial number of its employees.
Each corporate political contribution must be endorsed by a vice president of government relations and approved by:
- The executive vice president of Public Affairs; and
- A managing counsel in RAI Services Company's Law department.
A contribution of more than $10,000 requires written approval from RAI's general counsel or his/her designee.
The corporate governance and nominating committee of the RAI board of directors will be provided a report on corporate contributions annually.
All corporate political contributions from RAI are made in compliance with applicable federal and state laws, and the required disclosure of those contributions is made to and available from the appropriate federal and state agencies.
Company policy requires that specific information about corporate political contributions by RAI and its companies will also be posted on the Reynolds American website, www.reynoldsamerican.com. The posting shall be made prior to the end of the first quarter of the year following the reporting period. The information will be sorted by state and shall identify the recipient by name, electoral district, political party, and if the activity relates to a referendum, the referendum at issue. Reynolds American Inc. Political Action Committee (RAI PAC) contributions are available on the Federal Election Commission's website: www.fec.gov.
With respect to groups organized under section 501c(4) or (6) of the Internal Revenue Code, in the event the aggregate annual contributions paid by the company to any such group exceeds $50,000, we intend to disclose the non-deductible portion of the aggregate annual contributions paid by the company to such groups, to the extent that information is disclosed to the company by the recipient, as required by law.
Contributions to groups organized under section 527 of the Internal Revenue Code will be disclosed by recipient and amount.
Many RAI and operating company employees choose to make personal contributions to individual candidates whose views the employees support. RAI has an employee-funded political action committee, the Reynolds American Inc. Political Action Committee (RAI PAC), in which employees can participate. Participation in the RAI PAC provides a means for employees' combined contributions to support candidates in elections around the nation. Participation in the RAI PAC is voluntary. Employees may choose to participate or not, without fear of reprisal.
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