A recent petition on the Securities and Exchange Commission (SEC) website has begun to bring light to a move by advocacy groups and others to force disclosures of corporate political campaign funds. Proponents seek the adoption of a rule by the SEC that would compel publicly traded corporations to disclose any and all political campaign contributions to their shareholders, a move that would force “hundreds of millions of secretly-spent dollars out in the open.”
Hundreds of thousands of signatures have been gathered on the petition, making the rule’s exposure vast in the public eye, but the responses have been ardent on both the side of support and of dissent. Republicans in the House, for example, countered the rising wave of shareholder advocacy with a legislative measure last week that would make disclosure regulations illegal. This move against the proposed SEC rule joined the voices of the Business Roundtable, the National Association of Manufacturing, and the U.S. Chamber of Commerce, who jointly issued a letter to Fortune 200 companies in early April asking for opposition to the rule. The rule’s final decision, however, will fall into the hands of the SEC’s newly appointed chair Mary Jo White, a Democrat who has said to have “promised dynamic changes in corporate oversight” as the head of the SEC.
Campaign financial disclosures have been a contentious issue in recent years, as shareholder activists, academics and the general public ask corporations for greater financial transparency, and as campaign finance cases like Citizens United v. Federal Election Commission (FEC) are debated in the U.S. Supreme Court. The FEC has normally dealt with the implementation of these regulations in the past, but advocates assert that shareholders have the right to know and make decisions about how invested companies spend their funds, thereby falling under the SEC’s jurisdiction.
In either case, the SEC’s decision on the rule, and the reverberations of the rule’s implications in the corporate world, will likely remain a potent financial and regulatory concern in the coming months. For more information, or for assistance on other compliance topics, please contact us at (619) 278-0020 to schedule a consultation.