New voices weigh in for SEC disclosure
This year opens yet another chapter in the ongoing battle to achieve meaningful disclosure of corporate political spending. Ever since 10 law professors filed a petition at the Securities and Exchange Commission (SEC) asking the agency to require publicly traded companies to disclose information on their political spending, Public Citizen, along with our allies in the Corporate Reform Coalition, have been pushing to make the rule a reality.
We got a great boost last week when newcomer to the fight, Missouri Secretary of State, Jason Kander, weighed in with a comment to the agency.
“Full disclosure of corporate political spending is imperative to ensure all investors have equal access to accurate, complete, and timely information about the corporations in which they are invested,” wrote Kander. He added, “In my judgment, there is no doubt that reasonable and responsible corporate transparency – including with respect to political spending – is in the best interests of investors, companies, and the general public.”
In addition to Secretaries of State like Kander, the SEC will be feeling the pressure from all sorts of new angles this year, especially as voters deal with a fresh onslaught of 2014 elections ads funded by undisclosed donors. And, of course, the SEC can and should expect the usual full court press from investors using shareholder resolutions to call for disclosure of corporate political spending.
So far in 2014, at least 130 companies can expect to see on their doorstep a shareholder proposal pertaining to lobbying or campaign spending—and that number may still rise. 2014 has already broken the record for the number of filed resolutions pertaining to political spending. Coupled with the record-breaking 740,000 public comments submitted to the SEC in support of corporate political spending disclosure, it’s becoming hard to ignore that investors don’t want to know more about their companies’ political activity.
The SEC’s choice to put this rule on the backburner in December has only caused investors and voters to become more determined. Many companies will have more than just stockholder resolutions to answer to come shareholder season — many will face full-blown protests from people fed up with secret spending, corruption, and lack of corporate accountability. Surely no CEO, or regulator for that matter, could argue that such negative P.R. will be good for business.
Of course increased transparency has its opponents (the U.S. Chamber of Commerce comes to mind). Never mind that it’s the exact type of group that benefits from undisclosed spending of the sort an SEC rule would regulate.
The SEC would be wise to start listening to the voices of its constituency of investors, instead of kowtowing to industry pressure. The longer the agency waits to act, the louder their (and our) voices will become.
Kelly Ngo is the online advocacy organizer with Public Citizen’s Congress Watch division.