Thousands of Americans may be unwittingly donating to political causes and candidates they do not support in the 2012 election. It’s not an elaborate scam; it’s a consequence of the Supreme Court’s Citizens United decision which gave the green light for corporations to make unlimited political contributions. The decision was based on the court’s alternate reality where unlimited cash (so long as it isn’t “coordinated” with campaigns or candidates), does not corrupt, and as Jon Stewart and Stephen Colbert proved, the term “coordinated” actually means whatever you want it to mean.
So how are Americans getting duped?
When publicly traded companies spend directly from their treasuries, they are not spending their own money, they’re spending shareholders’ money. And since more than half of American households own stock, chances are high that this election season, a lot of Americans will be supporting causes and candidates they haven’t even heard of, let alone want to support with a political contribution.
For instance, take 3M Corp., a company famous in Minnesota and nation-wide for scotch tape, sandpaper, and Post-its. 3M does not disclose contributions to trade organizations or faux nonprofit organizations like Crossroads GPS that play in elections. In 2010 3M contributed $100,000 from its treasury to MN Forward, a group supporting a candidate for governor who held controversial views on social issues.
Whether or not you agree with those views, corporations are organized to create profit, not to choose governors. Shareholders can choose on their own whether to spend money to support political candidates, but corporations should not be using their money to make the decision for them.
Thankfully, shareholders are rallying around the country to demand transparency from corporations that spend money in politics. Socially responsible investment groups have filed resolutions at hundreds of companies asking them to disclose the money they are spending to influence elections. Investors are gathering at shareholder meetings to support the cause, and in some cases asking companies to go a step further and refrain from spending money altogether.
Furthermore, a proposed SEC rulemaking requiring corporations to disclose political expenditures to shareholders has logged more than 260,000 comments supporting the measure. That’s more than any other SEC rulemaking has ever received.
Investors are not alone in this fight. Securities and Exchange Commissioner Luis Aguilar recently voiced his support for an SEC rule requiring publicly traded companies to disclose their spending.
“The view that when corporations are able to obtain favorable conditions through political influence, rather than meritoriously adding value through a better product or service, it distorts the operation of the marketplace…” Aguilar said. “Shareholders require uniform disclosures regarding corporate political expenditures for many reasons, including that it is impossible to have any corporate accountability or oversight without it.”
People are paying attention to this, but it seems not everyone is on board for a transparent democracy.
Critics of corporate disclosure have complained that this movement is trampling on the free speech rights of corporations. They say the Constitution protects the rights of corporations to make political messages, and that disclosure of political expenditures will have a chilling effect on speech.
But what they do not to say is that there is more to free speech than just the right to speak. We also have the right to not be associated with speech we disagree with. Free speech is free speech, but shareholders have a right to be free from that speech as well. And they need disclosure from companies in order to make that choice.
So this election season ask yourself if you want to speak for a cause you believe in, or if you want Corporate America to use your money to speak for a cause IT believes in.
Without disclosure there’s no way of knowing who or what you’re supporting in 2012.
Kelly Ngo works for Public Citizen’s Congress Watch division. Learn more about @Public_Citizen’s work with the Corporate Reform Coalition by following @CorporateReform. Connect with an expert on this issue by emailing engage [at] citizen dot org.