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 In an hour-long press conference on the SEC's doorstep, the
Corporate Reform Coalition said that more than a million comments in
support of a corporate political spending disclosure rule have been
sent to the SEC, a number they called "record breaking."
Flanked by signs that read "Your money is being invested in secret.
Why is the SEC doing nothing?" the activists accused the SEC of
caving into pressure from Republicans who oppose a political
spending rule and restrictions on campaign spending in general.
To date, SEC Chair Mary Jo White has not publicly expressed a view
on the issue, though in the past she has said generally she opposes
writing rules to exert "societal pressures on companies."
She has also noted the agency has a full agenda and is struggling to
complete rules called for in the 2010 Dodd-Frank Wall Street reform
act and other legislation.
"The SEC should closely consider a rule like this, rather than
turning its back on investors' interests because of Republican
objections," said Robert Jackson, a Columbia University law
professor who along with other academics first submitted a public
petition for the rule in August 2011.
"The SEC is an independent agency. They are charged with protecting
investors - not politicians."
The effort by the activists dates back to the Supreme Court's 2010
Citizens United decision, which loosened campaign finance rules and
opened the floodgates to millions of dollars in political spending
by businesses and individuals.
The decision inspired a new wave of politically focused non-profit
groups which are not required to disclose the identity of their
donors.
A network of conservative groups backed by the billionaires Charles
and David Koch, for instance, spent at least $400 million in the
2012 elections. Those "dark money" groups, organized under section
501(c) of the tax code, differ from so-called "Super PACs," which
can advocate directly for candidates, but must disclose the identity
of their donors.
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"As we start to see the wave of dark corporate political money crest
in the 2014 elections, the need for this rule has really never been
more obvious," said Lisa Gilbert, the director of Public Citizen's
Congress Watch, a nonprofit that promotes good government.
Activists at one point had hoped the SEC would take up a rule, after
the agency's former Chair Mary Schapiro included the item on a list
of her topic policy priorities in 2013.
Since then, however, the SEC's current Chair White had the item
removed from the rulemaking agenda.
Republicans in the U.S. House of Representatives, as well as both
SEC Republican commissioners, have staunchly opposed an effort to
enact a political spending disclosure rule, saying campaign spending
is not material for investors.
The renewed push by the activists and professors for action on a
rule targeting public company spending comes at the same time that
the SEC is also facing a legal battle with Republicans over
"pay-to-play" rules that limit investment advisers from making
campaign contributions.
Last month, Republicans in New York and Tennessee sued the SEC to
block a 2010 rule prohibiting investment advisers from making
campaign contributions in exchange for contracts to manage public
pension funds, saying the rule violates their free speech rights.
The SEC will face off in court against the Republicans on Sept. 12.
(Reporting by Sarah N. Lynch; Additional reporting by Andy Sullivan;
Editing by Lisa Shumaker)
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