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Verizon 2005 Interactive Annual Report

Item 9 on Proxy Card:
Domini Social Investments LLC, 536 Broadway, 7th Floor, New York, New York 10012-3915, owner of 707,722 shares of the Company’s common stock, proposes the following:

POLITICAL CONTRIBUTIONS REPORT

RESOLVED: The shareholders of Verizon Communications, Inc. (the Company) hereby request that
the Company provide a report updated semi-annually, disclosing the Company’s:

  • 1.    Policies and procedures for political contributions (both direct and indirect) made with corporate funds.
  • 2.    Monetary and non-monetary contributions to political candidates, political parties, political committees
           and other political entities organized and operating under 26 USC Sec. 527 of the Internal Revenue Code
           including the following:
    •    a.   An accounting of the Company’s funds contributed to any of the persons described above;
    •    b.   The business rationale for the Company’s political contributions; and
    •    c.   Identification of the person or persons in the Company who participated in making the decisions
               to contribute.

This report shall be posted on the company’s website to reduce costs to shareholders.

SUPPORTING STATEMENT: As long-term shareholders of Verizon, we support policies that apply transparency and accountability to corporate political giving.

Company executives exercise wide discretion over the use of corporate resources for political purposes. They make decisions without a stated business rationale for such donations. We believe shareholders are entitled to know how their company is spending its funds for political purposes. However, although there are various disclosure requirements for political contributions, this information is difficult for shareholders to access and is not complete.

Although the Bi-Partisan Campaign Reform Act enacted in 2002 prohibits corporate contributions to political parties at the federal level, corporate soft money state-level contributions are legal in 49 states, and disclosure standards vary widely. Corporations can also make unlimited contributions to ’Section 527’ organizations, political committees formed for the purpose of influencing elections, but not supporting or opposing specific candidates. Corporations are not required to report these contributions.

In the 2004 and 2006 election cycles, our company contributed approximately $507,500 and $185,000, respectively, to Section 527 organizations (Figures derived from data provided by http:// www.PoliticalMoneyLine.com, an independent campaign finance disclosure website). In 2001-02, Verizon made at least $1,610,915.00 in political contributions. (The Center for Responsive Politics: http://www.opensecrets.org/softmoney/index.asp.)

Relying only on the limited data available from the Federal Election Commission, the Internal Revenue Service, the Center for Responsive Politics, a leading campaign finance watchdog organization, and Political Money Line provides an incomplete picture of the Company’s political donations. Current disclosure is insufficient to allow the Company’s Board and its shareholders to fully evaluate the political use of corporate assets.

Absent a system of accountability, corporate executives will be free to use the Company’s assets for political objectives that are not shared by and may be inimical to the interests of the Company and its shareholders, potentially harming long-term shareholder value.

There is currently no single source of information that provides the information sought by this resolution. This report should represent a minimal cost to the company, as presumably management already monitors corporate resources used for such purposes. We believe that transparency and accountability in this area will advance our company’s interests, and help build long-term shareholder value. We urge your support for this critical governance reform.

BOARD OF DIRECTORS’ POSITION
The Board of Directors believes that the Company’s political contributions constitute an appropriate expenditure of corporate funds for valid business purposes. The Company has in place effective reporting and compliance procedures and believes it has made contributions to political parties and candidates in accordance with all applicable laws and regulations. The Public Policy Committee of the Board of Directors periodically receives reports on contributions and reports on these activities to the Board. The Board strongly believes that any suggestion that the Company’s contributions fund agendas that are adverse to the interests of the Company and its shareholders is unsupported and plainly wrong. The Board is confident that the Company contributions support those candidates whose views are consistent with the Company’s long-term goals and interests.

The Company’s resources currently allocated to political activities are insubstantial in comparison to the scope and extent of the Company’s business. Significant information about political contributions by the Company is already publicly available as required by applicable state and federal laws. Accordingly, the Board believes there is no need for the Company to use its financial and other resources to provide duplicative and unnecessary information.

For the foregoing reasons, the Board of Directors believes that this proposal is unnecessary and not in the best interests of the Company and its shareholders.

The Board of Directors recommends a vote AGAINST this proposal.

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* This is an interactive electronic version of Verizon’s 2005 Annual Report to Shareholders, and it is intended to be complete and accurate. The contents of this version are qualified in their entirety by reference to the printed version. A reproduction of the printed version is available in PDF format on this website.