President Obama Should Require Government Contractors to Disclose Political Spending

An Executive Order From President Obama Requiring Government Contractors to Disclose Political Spending Would Promote Racial Equity

Currently, corporations are not required to disclose their political spending, and only about 2.2 percent of public companies have voluntarily elected to make such disclosures.  Yesterday, 44 U.S. Senators sent a letter to SEC Chairwoman Mary Jo White urging the SEC to use its rulemaking authority to require publicly traded corporations disclose to their shareholders how they use corporate resources for political activities. A new Demos explainer, “The Racial Equity Impact of Secret Political Spending by Government Contractors,” by Demos Counsels Naila Awan and Liz Kennedy, finds that greater transparency is particularly needed with respect to government contractors, who are given taxpayer dollars to do the people’s business. The authors urge President Obama to issue an Executive Order that would require government contractors to disclose their political spending, noting that it would also promote racial equity.

Since Citizens United, more than $600 million in dark money has been spent on U.S. elections. 

Since Citizens United, more than $600 million in dark money has been spent on U.S. elections. This lack of transparency limits voters’ ability to weigh the messages they hear and make informed decisions.  In “The Racial Equity Impact of Secret Political Spending by Government Contractors,” Awan and Kennedy detail how companies that profit from government contracts often lobby for policies that have a disproportionately negative effect on people of color and fail to reflect the priorities of U.S. working families. For instance, contractors have actively participated in efforts to prevent the minimum wage workforce—which is disproportionately comprised of people of color—from receiving a living wage. While people of color make up only 32 percent of the U.S. workforce, they comprise approximately 42 percent of the minimum wage workforce. Contractors have also helped to reinforce and strengthen a system of criminal injustice that incarcerates and imprisons people of color at higher rates. Private prison companies have repeatedly advocated for policies that dole out harsher punishments, result in lengthier sentences, and increase rates of incarceration.

The authors call on President Obama to issue an Executive Order that would require federal contractors to disclose fully the money they spend in politics. These disclosures would allow voters to judge what candidates are in the pockets of big businesses with interests that diverge from those of American families, particularly, families of color.

Further, as Kennedy has called for in comments Demos filed with the agency, the SEC should exercise its rulemaking authority and responsibility to protect shareholders and the public by requiring that publicly traded corporations disclose to their shareholders how they use corporate resources for political activities.