Is campaign finance disclosure coming from the SEC?

Posted by AzBlueMeanie:

This is an under-reported story in the political media, although you can bet that corporate players in campaign finance are all over this like white on rice. Christine Hurt at The Conglomerate legal blog writes, “Is Mandatory Political Activities Disclosure Coming from the SEC?”:

Two summers ago, a group of well-known law professors submitted a proposal to
the SEC to require disclosure of political contributions by Exchange
Act filers
.  The arguments for new rulemaking were valid and
persuasive:  investors are increasingly interested in the political
contributions corporations make; even a diligent investor would have a
difficult time finding this information independently; many corporations
voluntarily disclose such information; and disclosure rules have
historically evolved to require disclosure in various areas.

Wednesday, the NYT ominously declared that
"S.E.C. officials have indicated that they could propose a new
disclosure rule by the end of April
, setting up a major battle with
business groups that oppose the proposal and are preparing for a fierce
counterattack if the agency’s staff moves ahead."  That sounds very
dramatic.  The article reports that half a million comments have been
submitted to the proposal; I did not count, but you can try here.  The NYT also reports that the majority of the comments are in favor of the proposal; again, feel free to count yourself!

The proposal's authors are correct in stating that investors want to know this information. On the SEC website, I searched for 14a-8 shareholder proposals that
related to political activities and came up with many requests from
companies to exclude proposals relating to political contributions and
lobbying activities.  In March alone, the SEC responded to requests for
no-action letters relating to excluding political contribution
proposals from Target; CVS Caremark (no letter given); Western Union (no
letter given); Bank of America (no letter given); JP Morgan (included
voluntarily); Goldman Sachs (no letter given); Bristol-Myers;
Exxon-Mobil (proposal withdrawn); and CBS Corp. (shareholder
ineligible).  According to this post on the HLS Forum on Corporate Governance and Financial Regulation, this Spring has seen a "renewed blitz of resolutions on corporate
campaign finance, particularly indirect lobbying activities, following
the record spending in the 2012 election cycle."

But, as the NYT not-so-subtly-hints, a lot of groups, perhaps groups
that receive the monies, vehemently oppose the bill, including Americans
for Prosperity, the U.S. Chamber of Commerce, the American Gaming
ASsociation, the National Retail Federation, and the National Mining
Association
.  The arguments against, though, just aren't that
compelling.  As you might imagine, saying "our shareholders don't need
to know this" or "we don't want our shareholders to know this because
then they might sell" doesn't sound very good. 

One argument is that the amount of money involved is "immaterial to the company's bottom line."

* * *

The other argument is, of course, free speech. I love free speech, but that argument doesn't ring true to me.  The SEC
wouldn't be limiting or prohibiting political speech, just mandating
that corporations tell their owners about it.  Their owners. . . Not only will current and prospective owners know about political
activity, but so will consumers and the public at large.  But arguing
against this potential rule seems to fall under the "protests too much"
category.

Wait for it… this is how the Tea-Publican controlled Congress, which does the bidding of the one percent, responded to news of the SEC rule making for political contribution disclosure to investors.

Finally, last Thursday, the House of Representatives passed the
"Focusing the SEC on its Mission Act," to prohibit the SEC from
requiring corporations to disclose information regarding political
activities
. Apparently, that is the SEC's mission — to not require
corporations to disclose information regarding political activities.

This reminds me of that old poster from the 1970's that said "I must be a mushroom, Cause they keep me in the dark and feed me bullshit." Tea-Publicans want to treat investors like mushrooms. Don't question what your over-paid corporate executives are doing with your investment dollars. They are your betters, and your masters.

UPDATE: Bloomberg's Megan Hughes reports on shareholder votes on corporate
disclosure of political donations as the SEC considers a proposal to
require mandatory disclosure of a company's political activity. She
speaks on Bloomberg Television's "In The Loop." More: Shareholders Force Firms to Reveal Secret Political Funds – Bloomberg.

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