Lisa Gilbert, Public Citizen (202) 454-5188
Elizabeth Kennedy, Demos (212) 419-8772
Blair Bowie, U.S. PIRG (202) 546-0173
The Corporate Reform Coalition applauds the 79 members of Congress, led by U.S. Sen. Robert Menendez (D-N.J.) and U.S. Rep. Michael Capuano (D-Mass.), who today sent letters from their respective chambers urging Securities and Exchange Commission (SEC) Chair Mary Jo White to reinstate the corporate political spending rule on the agency’s agenda. The agency also should do significant work in the interim by doing such things as holding roundtables on the topic.
In December 2012, the agency added the rulemaking to the regulatory flexibility agenda after 10 law professors petitioned the agency for the rule. The petition received the all-time highest number of comments at the SEC, with more than 650,000 people and investors weighing in to support the rule. While the agenda is not necessarily demonstrative of what work the agency will do, it does create a marker of intent. Important investor priorities like this rule should remain on it.
The letters correctly state that since the U.S. Supreme Court’s ruling in Citizens United v. Federal Election Commission, which expected all new corporate political spending to be transparent to shareholders and the public, disclosure rules have not kept pace with the realities of elections spending. This poses a particular risk to shareholders whose companies may be spending on controversial issues and candidates. The Senate letter also points out that the opponents of the rulemaking stand to benefit from the lack of disclosure, making the need for transparency even more important.
The Senate letter also says:
We understand that some business lobbyists and political figures who seek to benefit from undisclosed corporate political spending have been engaging in a concerted effort to pressure the SEC not to act. We certainly hope that this campaign has not played a role in the SEC’s decision to drop corporate political spending disclosure from its rulemaking agenda, as this would dramatically reinforce the need for urgent action.
The House letter adds:
We strongly urge the SEC to reconsider and use its rulemaking authority to require corporations to disclose their political spending to shareholders. At a minimum, the SEC should explain why this item has been left off its agenda.