This week, the Supreme Court affirmed a lower court’s decision that certain nonprofit groups that spend money to support or oppose political candidates need to disclose their donors.
The decision comes as negotiators in Congress decide whether to keep a provision in the federal budget that protects corporations that spend secret money in politics from having to be honest about their spending. Last week, the Corporate Reform Coalition sent a letter urging conferees to remove language from the final appropriations deal that stops the Securities and Exchange Commission (SEC) from finalizing a rule requiring public companies to disclose their political spending to shareholders and the public.
Since the U.S. Supreme Court’s decision in Citizens United v. FEC came down in 2010, corporations have been allowed to spend unlimited undisclosed amounts of money to influence American elections and in turn affect policy outcomes. Noting the danger of “dark money” for both American democracy and the shareholders of the companies that are spending in secret, a strong coalition of diverse allies has been working together since the decision to bring corporate spending in politics into the light.
The members of the Corporate Reform Coalition believe the SEC should be allowed to and encouraged to move forward with the rulemaking that would require public companies to disclose to their shareholders and the public how they spend money in politics. This information is material to investors- the constituency the SEC is responsible for protecting.
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 is troubling for several reasons, and investors concerned about the value of their investments and citizens concerned about the future of American democracy are looking to the SEC to take the action that so many investors have demanded and require disclosure of political spending.
Without direction from the SEC, 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. Investors want more disclosure in order to make sound investment decisions. That is why 1.2 million comments- the most in the agency’s history- have come into the SEC on this rulemaking petition from diverse stakeholders including the founder of Vanguard, John Bogle, five state treasurers, a bi- partisan group of former SEC chairs and commissioners, and investment professionals representing $690 billion in assets.
The rider blocking the SEC from making progress on this rulemaking was inappropriately included in the appropriations process, and the budget should be free of any partisan, poison pill policy riders. Disclosure of a corporation’s political spending is good for business and good for our democracy. Congress should not stop the SEC from finalizing this important disclosure rule.