Justice Kennedy’s “Cyber Age” and the Vanguard Group
Events following the Supreme Court’s ruling in Citizens United v. Federal Election Commission have not played out as Justice Anthony Kennedy, the decision’s author, expected.
Disastrously, Citizens United has unleashed unlimited corporate political spending into our elections.
Justice Kennedy, in writing the decision, presumed that this unlimited corporate spending would occur transparently, and that shareholders and the public would be able to hold corporations accountable for any attempt they might make to sway elections.
Here’s what Justice Kennedy wrote:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters
Recently, Justice Kennedy expressed frustration that disclosure “is not working the way that it should” despite the fact that, in his words, we “live in this cyber age” where a “report can be done in 24 hours.”
For the past several years, Public Citizen along with allies in the Corporate Reform Coalition have worked to fulfill Kennedy’s promise of disclosure by calling on the U.S. Securities and Exchange Commission to require publicly traded corporations to disclose their political spending. Additionally, we’ve supported shareholder efforts among the filed hundreds of resolutions filed in order to call on corporations like Chevron, Target, Google and Bank of America to disclose their political spending.
Now we’ve opened a new front in the battle for transparency. We’re calling on the Vanguard Group, the largest manager of retirement savings in the U.S., to combat the corrosion of our democracy.
Investments from 401(k) retirement funds such as those managed by Vanguard are the lifeblood of every corporation on the stock market, from Apple to Exxon Mobil to Xerox. The funds Vanguard manages represent the savings of millions and millions of everyday Americans. Nevertheless, despite Vanguard’s repeated opportunities to support transparency by voting its shares in favor of shareholder resolutions that would require corporations to disclose their political spending, Vanguard has instead sided with the CEOs who want to keep shareholders and the public in the dark about their attempts to influence our votes.
Vanguard should stand with the people who trust it to manage their retirement savings, not with CEOs who want to exploit the lack of disclosure requirements after Citizens United to distort our democracy.
Not only is taking a stand against Citizens United corruption the right thing for Vanguard to do, it’s also the responsible thing to do in order to protect its customers’ retirement savings.
CEOs who use corporate money to influence elections are obsessed with short-term gain — and so are the politicians they try to elect.
This greed-driven shortsightedness infects lawmakers, leading not only to government shutdown threats and refusal to address climate change, but a failure to regulate Wall Street recklessness — which makes the next crash almost inevitable.
Supporting policies that ensure long-term, sustainable growth instead of short-term gain is what’s best for our economy, retirees and Vanguard.
So far, Justice Kennedy’s “cyber age” has fallen short of its potential for requiring disclosure. But Public Citizen and the Corporate Reform Coalition’s online grassroots campaign to pressure Vanguard toward supporting the kind of disclosure Justice Kennedy envisioned represents the promise of cyber activism to hold Corporate America accountable when our democracy is at stake.
Rick Claypool is the online director for Public Citizen’s Congress Watch division