(New York, New York) – Almost five years after the Supreme Court’s decision in Citizens United v. FEC granted new rights to business corporations to spend unlimited corporate resources to influence elections, the Securities and Exchange Commission (SEC) has yet to act to require disclosure of political spending. Today, the national public policy organization Demos submitted a comment urging the agency to enact a rule requiring publicly traded companies to disclose their corporate political spending to their shareholders.
Requiring the disclosure of corporate political spending is in the best interest of investors, the market, and the economy.
Demos’ comment outlines the agency’s authority and responsibility to issue this rule, highlighting the agency’s obligation to protect investors and the market from risky secret corporate political spending and to ensure investors obtain the information necessary to exercise accountability in this arena. With spending by dark money groups escalating in recent election cycles, over $300 million in secret political spending was pumped into the 2012 elections and has already reached $50 million in the 2014 elections so far.
“The SEC was established to protect the integrity of the markets and its participants, and it has clear statutory authority to determine what information companies must disclose in the public interest and for their protection of investors,” said Liz Kennedy, Counsel at Demos. “The agency has long recognized its role in protecting the integrity of the market where it intersects with political spending. Following the Watergate scandal, which many forget involved a corporate campaign finance scandal, the agency took action to increase transparency and require more accurate reporting. The agency must meet its responsibility to respond to changed circumstances for corporate political spending now.”
The comment notes other evidence of the SEC’s previous regulatory interventions, including banning pay-to-play in the municipal bond market and in pension fund management.
In 2011, a bipartisan committee of leading law professors filed a petition requesting that the SEC undertake a rulemaking. While the rulemaking was placed on the agency’s agenda by former SEC Chair Mary Shapiro in 2013, current SEC Chair Mary Jo White removed the item earlier this year. Comments submitted to the SEC have shown that this removal sparked concern that opposition from business lobbies was preventing the agency from protecting investors, the market, and the public interest.
“Requiring the disclosure of corporate political spending is in the best interest of investors, the market, and the economy,” said Kennedy. “Citizens United changed the game, but the rules have not kept up. The Supreme Court assumed that any new political spending by corporations would be transparent, and emphasized the importance of disclosure and accountability for corporate political spending. The SEC must not sit by in the face of changes that threaten investors, the market, and the public interest.”
Demos will participate in a press conference this coming Thursday, convened by the Corporate Reform Coalition. The conference will take place outside of the SEC building where the coalition, which Demos has long been a member of, will announce a milestone in the fight for the SEC political spending rule.
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Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy. Learn more at www.demos.org.