In one of the last actions of departing Securities and Exchange Commission Chair Mary Schapiro’s term, the agency put on its agenda that it will consider requiring public companies to disclose to shareholders the use of corporate resources for political activities. A petition requesting this rule was filed in 2011 by a bipartisan committee of leading law professors. The push for increased disclosure is part of an effort led by the Corporate Reform Coalition, which has been spearheaded by Public Citizen.
The adoption of such a rule would represent an important step in combating the growing influence of corporate money in politics. Since the infamous U.S. Supreme Court decision in 2010 (Citizens United v. Federal Election Commission), corporations and the super-rich have been able to spend unlimited amounts to influence elections. As we have written on several occasions, much of this money has been difficult to trace because so few disclosure rules exist for independent election spending.
Unfortunately the rules that are available – such as those stemming from the 2002 McCain-Feingold campaign finance law – have been largely ignored by the FEC. This has allowed corporations to secretly funnel money through third-party groups such as the U.S. Chamber of Commerce and Karl Rove’s Crossroads GPS. These organizations refuse to disclose the underlying donors who provide financial resources for their political activities. The U.S. Chamber and Crossroads GPS spent more than $36 million and $70 million on the 2012 elections, respectively.
The petition for the SEC to consider this new rule has garnered more than 320,000 favorable comments, which is a record. The wide breadth of supporters include the Maryland State Retirement Agency; 43 members of the U.S. House of Representatives; 12 U.S. Senators; John Bogle (former CEO of the Vanguard Group), five state treasurers; US SIF: The Forum for Sustainable and Responsible Investment; the Sustainable Investments Institute, and many more.
A recent poll conducted by the Corporate Reform Coalition showed that 80% of the American people believe corporations should spend money on political campaigns only if they disclose their spending immediately. This included 77% of Republicans and 88% of Democrats. Significantly, 80% of Americans interviewed for the poll agreed that the secret flow of corporate political spending is bad for democracy, while 84% agreed that corporate political spending drowns out the voices of average Americans. Three-quarters of respondents said they would sign a petition to the SEC in support of corporate disclosure. Lisa Gilbert, director of Public Citizen’s Congress Watch division, observed:
We applaud the SEC for listening to investors and the public in moving forward on a measure to protect investments and democracy. We will be pushing the chair to move the rule forward to completion this year.
Individuals can file a comment to support the effort by visiting www.citizen.org/sec-disclosure-action. Hopefully, the SEC will do the right thing on this important issue and adopt the proposed rule.
Source: Public Citizen
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