The long standing problem of the inability of many semiempirical models to correctly predict the polarization of the higher dipole allowed optical transitions of phenyl based pi-conjugated polymers and molecules is examined and related to the issue of internal and external screening of pi-pi electron Coulomb interactions within the molecules. Following a review of previous theoretical and experimental work, pi electron only the Complete Neglect of Differential Overlap (CNDO) model is presented which, for the first time, is able to predict accurately the energies and symmetries of all the observed optical transitions of benzene, biphenyl and trans-stilbene, up to similar to8-10 eV. In so doing, it is demonstrated that the problem with previous calculations was the noninclusion of screening from outside the pi electron system itself. By fitting separately the spectra in hydrocarbon based condensed phases, in the gas phase and in solid rare gas matrices, and comparing the resulting model parameters, we show that, while the effects of screening from the environment are certainly noticeable, the most important spectral features-in particular the ordering of dipole allowed transitions-come from effective screening by the sigma electrons. We find that both of these effects can be adequately accounted for within a pi electron only model by using a dielectric constant and appropriate parameter renormalization.