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The People Want to Know

Today’s Senate vote on the DISCLOSE Act could help shed light on the billionaires, shadowy outside groups and corporations spending heaps of cash to influence our elections. It could ensure voters fully understand the barrage of campaign advertising assaulting their television screens. It could even force some accountability into a democracy, and marketplace, otherwise plagued by darkness and secrecy.

It could happen…

The legislation would be huge win for voters who overwhelmingly favor campaign finance reform and want to know how corporations and other outside sources are spending money in politics. In fact, voters want more than just sunlight when it comes to corporate political spending. In a study conducted in April, 80 percent of those surveyed said corporations should be required by law to get approval from shareholders before spending money on politics.

Many opponents of disclosure say the threat from corporate spending has been overblown and that Super PACs are raking in tons of cash from individuals, but corporations have accounted for less than 20 percent of donations to these groups. According to Senate Minority Leader Mitch McConnell (R-Ky.), “not a single Fortune 100 company contributed a penny to the eight super PACs that supported the Republican primary candidates.

So does that mean voters have it wrong and corporations are sitting this one out?

Not a chance. Evidence shows that corporations are increasingly turning to hyper-political nonprofits that function like Super PACs and the U.S. Chamber of Commerce to spend their money and keep it secret. An example came last month when the Fortune 100 company Aetna’s $3 million gift to the nonprofit American Action Network (AAN) was accidently outed. AAN has spent millions attacking members of Congress.

Aetna also gave another $4 million to the U.S. Chamber. CEO Mark Bertolini explains that Aetna did not disclose the donations because they were for “educational purposes,” but in reality it seems a safe assumption that the motivation was political when you look at the recipients.

In good news, while some corporations seek to evade existing requirements or push back against increased disclosure, many understand the importance of accountability. There is a growing sense that disclosure, along with a stated policy on political spending and board oversight, is becoming part of standard best practices for many companies.  In April, the Center for Political Accountability announced that it had reached agreements with 100 companies to disclose their political spending, including 94 companies in the S&P500.

In that vein, the Corporate Reform Coalition is holding a press conference on the Hill this Wednesday in which small business leaders will join U.S. Sens. Bob Menendez (D-NJ), Sheldon Whitehouse (D-R.I.) and Jeff Merkley (D-Ore.). They will stand with the Coalition for Accountability in Political Spending (CAPS), a bipartisan coalition of state treasurers and officials, on behalf of their fiduciaries and their trillions of invested dollars and declare the importance of disclosure of political spending.

These senators want Congress to move ahead with disclosure legislation and the SEC to develop rules and guidelines for responsible and transparent corporate political spending.

Pending before the SEC is a petition for rulemaking filed by 10 law professors who want the agency to require public companies to disclose to shareholders their political spending. An all-time record of 300,000 comments has been received by the agency from everyone from institutional investors, business owners and the public urging the SEC to go forward with the rulemaking.

The historic number of supportive comments submitted to the SEC speaks volumes about the importance of and public demand for greater transparency of money in elections and for responsible corporate governance.

The U.S. Supreme Court’s ruling in Citizens United v. Federal Election Commission may have opened the door to this flood of corporate money, but it did not say that voters should be left in the dark.  In the majority opinion for Citizens United, Justice Anthony 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.”

To make this happen, we need Congress to step up to the plate, and we need the SEC to fulfill its mandate and protect investors. Voters deserve to know who is behind every political ad, something that the Supreme Court has affirmed again and again as being important for a healthy democracy.

The people understand and they want to know. Now we just need Congress and the SEC to make it happen.

Kelly Ngo contributed to this post.