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Corporate Responsibility Report 2008

Political contributions and lobbying expenditures

In late December 2008, GSK announced a new global policy to voluntarily stop all corporate political contributions.

Prior to this, GSK made political contributions with corporate funds in countries where they were authorised by law and were culturally appropriate, such as the US and Canada. The new policy ensures that no such contributions will be made in the future.

Contributions to political parties or other political organisations in the European Union were prohibited by GSK policy prior to this change. See the corporate governance section of our Annual Report for more information.

Prior to this policy change, in 2008 we contributed £347,000 to political organisations in the US and Canada.

In the rest of the world, contributions have been very rare and of low monetary value. These contributions were agreed by local management and approved by GSK’s international legal operations and corporate government affairs department. All contributions were made in compliance with local laws and customs.

Contributions in the US

In the US, corporate contributions to party affiliated committees and candidates running for federal office are prohibited by law. State and local political campaigns are financed through a variety of sources including contributions from companies, individuals, NGOs and local campaign committees. By supporting pro business candidates, corporate contributions are an accepted and legal means for corporations to have a voice in the political debate. However, to ensure that there is no implication whatsoever that such contributions provide GSK with any special privileges, the company changed its policy in late December 2008 to prohibit any corporate contributions to political candidates.

Contributions to state candidates
In 2008 prior to the change in policy, GSK donated £319,000 to candidates for state-held offices. Contributions were only made where permitted by law and were not made on the basis of political party.

Contributions were made to candidates who support an environment that appropriately rewards high-risk, high-investment industries and who work to preserve free market principles and intellectual property rights. We made approximately 46 per cent of our contributions to Republican candidates and 54 per cent to Democratic candidates. All states publish information disclosing the names of contributors and the amount of contributions that are at or above an established threshold.

Political Action Committee contributions
In accordance with the Federal Election Campaign Act, GSK established a Political Action Committee (PAC) that facilitates voluntary political contributions by eligible employees.

The PAC is not controlled by GSK. Decisions on the amount and recipients of contributions are made by participating employees exercising their legal right to pool their resources and make political contributions. All PAC contributions are voluntary and contributions are subject to strict limitations. For example, the GSK PAC may not contribute more than $5,000 per election to an individual candidate for federal office.

The PAC is run by a governing board of participating GSK employees from across the company. As required by law, PAC contributions are reported to the Federal Elections Commission (FEC). In 2008, the GSK employees’ PAC contributed £539,359 - 58 per cent to Republicans, 40 per cent to Democrats and two per cent to unaffiliated or other party candidates running for state and federal offices.

Contributions in Canada

In 2008, GSK donated £28,000 in Canada to political candidates in those provinces where it is legal.

Lobbying expenditure

Europe
In December 2008, GSK signed up to the European Commission’s new code of conduct and the voluntary register of organisations working to influence European Union institutions. In the ‘transparency register of interest’, we declared the costs associated with lobbying of the EU institutions to be in the range of €750,000-800,000 in 2008. This includes running of the Brussels advocacy office, salaries, external events and educational materials. This figure takes into account the proportion of employee time spent on interest representation.

US
We report our US lobbying expenditures to the US Congress in accordance with the Lobbying Disclosure Act 1995. We spent $6.99 million in federal lobbying activities in the US during 2008. This includes the costs of salaries and benefits for all employees registered to lobby the US government; use of lobbying consultants; support for lobbying contacts such as planning activities and research; running the GSK Washington DC government affairs office; support staff; and the portion of trade association fees associated with federal lobbying. We also report our state lobbying expenses, in line with applicable state laws.

Contributions to policy groups
GSK contributes to various groups which provide a forum for policy analysis and debate. This includes think tanks in a number of countries, and '527' organisations in the US.