Our organizations come from diverse backgrounds, with concerns ranging from constitutional rights to corporate governance to protecting our air and water. We have many different priorities, but we all agree that last the unprecedented Supreme Court decision, Citizens United v. Federal Election Commission, requires a strong response.
We are troubled for several reasons by the Supreme Court’s decision to give corporations the right under the First Amendment to spend unlimited funds from their corporate treasuries to support or attack candidates.
In the electoral arena, this decision has brought a flood of new money into elections, ratcheting up the cost of campaigns and increasing the time and resources needed for fund raising.
In the legislative arena, the mere threat of unlimited corporate political spending gives corporate lobbyists a large new club to wield when lobbying lawmakers, and makes it harder for legislators to vote their conscience.
In corporate governance, there are no rules or procedures established in the United States to ensure that shareholders – those who actually own the wealth of corporations – are informed of, or have the right to approve, decisions on spending their money on politics.
Corporate disclosure and the raised voices of shareholders can help provide a framework to rein in some of the damage in this troubling, new political landscape. We support a variety of legislative and corporate governance solutions to strengthen the voices of the owners of a company and to provide them with the information they deserve concerning the spending of their money in politics.
A SurveyUSA poll commissioned by People for the American Way in February 2010 found that 75% of Americans believe that publicly traded companies should get approval from their shareholders before spending money on an election. Support for shareholder protection was strong across all ideological groups surveyed, with Republicans and those who identified as conservative slightly more likely to support shareholder protection provisions (79%) than Democrats and those who identified as liberals (74%).
Responsible corporate governance requires the involvement of informed shareholders and is not a partisan issue. We believe that holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business is important for both the market and for democracy.
This coalition seeks to develop the model and move an alternative type of response to the growing problem of corporate influence in our elections. Our campaigns are designed to complement existing campaign finance reform efforts.
Our approach is as follows:
- Advocate for a Securities and Exchange Commission rule that would require publicly traded companies to disclose both direct and indirect political spending.
- Support shareholder resolutions at S& P 500 corporations asking companies to disclose political spending and encourage mutual funds to use their voting power to support disclosure resolutions.
- Advocate passage of the federal Shareholder Protection Act.
- Advocate passage of laws modeled after the SPA in targeted states.
Because of the diverse nature of the coalition, many of our partners are working on different aspects of the outlined approach. While all of our organizations strongly believe in transparency and accountability, every group isn’t necessarily pursuing all of the above goals.
The Shareholder Protection Act
The Supreme Court decision in Citizens United v. FEC allows corporations to spend an unlimited amount of money on elections through independent expenditures and other communications. Previously, such expenditures could only be made through registered Political Action Committees (PACs) using separately raised funds. Now, corporate CEOs can spend unlimited amounts of other people’s money in politics – money from shareholders, most of whom might not fall in line with the corporate agenda these CEOs support.
While the Supreme Court has ruled that corporations are citizens for the purposes of free speech, what does that mean for the free speech rights of their shareholders? Shareholders are the ones who own the corporations, and they should accordingly have a say in how their money is spent on elections.
Anyone with a 401(k) invested in stocks or mutual funds – nearly one out of every two households today – has a stake in how the corporate money in those funds is spent. Passage of the Shareholder Protection Act would help the public hold corporations accountable for their political behavior.