Corporate America Must Fess Up About Its Political Spending
In a political environment teeming with corporate giveaways, politicians’ reliance on huge donors to get and remain in power and a president steeped in potential conflicts of interest, it is more important than ever that the U.S. Securities and Exchange Commission (SEC) issue a rule requiring all public companies to disclose their political spending.
Unfortunately, Republicans in Congress are using the federal budget process to stop this from happening. Funding for the government runs out at the end of September, and — even by the tumultuous standard of recent years — the budget process in Congress is in disarray. The process for fiscal year 2018 is already off to a late start, and, making matters worse, Republicans in on the House side are now trying to sneak policy riders that would not otherwise pass into the must-pass budget bills.
This week, the House Appropriations subcommittee on financial services and general government released its budget draft, which includes a harmful policy rider that stops the SEC from working on or finalizing a rule that would require corporations to tell us how they spend money in politics.
That’s right. There is a way to bring attempts by corporations to influence our politics out of the shadows, but Republicans in Congress are trying to avoid traditional debate over the subject and sneak a policy to stop it under the public’s radar. In recent years, the petition calling on the SEC to issue the corporate political spending disclosure rule received a record-breaking 1.2 million public and investor comments. Five state treasurers, a bipartisan group of former SEC chairs and commissioners, and numerous institutional investors and foundations are part of the cadre weighing in and supporting such a rule.
Corporations are also directly feeling the pressure to be upfront about their political activities. Shareholders have been filing resolutions at major companies asking them to disclose their election and lobbying spending every year for more than a decade. Corporate political activity is one of the key areas of focus for all shareholder proposals with more than 100 resolutions filed on the topic this year alone.
Companies are hearing these calls from shareholders and they are increasingly disclosing this information. Prior to 2010’s wrongly-decided Citizens United ruling, a mere 20 percent of S&P 500 companies provided some level of transparency regarding these expenditures. Seven years later, companies have responded to shareholder demand and now more than 66 percent of the S&P 500 discloses this information.
In Citizens United, the Supreme Court falsely assumed that corporate political spending would reflect shareholder interests. Writing for the majority opinion, Justice Anthony Kennedy said disclosure of corporate political spending provides “shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters.” In reality, shareholders at most public companies don’t even know how their money is being spent in politics, let alone which candidates and causes the corporation supports with their invested money.
The increasingly messy budget process has led to showdowns over appropriations and poison-pill policy riders that contribute to Washington gridlock. Americans deserve to see all inappropriate policy riders stripped from the 2018 budget and to see a Congress that legislates again. In particular, the rider impeding the SEC from finalizing the political spending disclosure rulemaking should be removed so that the SEC can move forward with a critical rulemaking both investors and the American public want.
Lisa Gilbert is vice president of legislative affairs at Public Citizen, an organization dedicated to ensuring that all Americans are represented in government.
Rachel Curley is democracy associate with Public Citizen’s Congress Watch division.
This post originally appeared on The Hill.