Congressional Democrats Seek Corporate Disclosure Post-Citizens United
WASHINGTON -- Congressional Democrats are stepping up support for transparency in corporate political spending ahead of the 2012 elections.
On Wednesday Rep. Michael Capuano (D-Mass.), Sen. Robert Menendez (D-N.J.) and Sen. Richard Blumenthal (D-Conn.) held a press conference to introduce a bill that would put more power in shareholder hands in decisions over corporate political spending, as well as require public disclosure of those spending decisions.
The bill, known as the Shareholder Protection Act, would allow shareholders of public companies to vote on political spending on an annual basis. It would also require quarterly disclosure reports to be filed with the Securities and Exchange Commission (SEC) revealing any contributions by a company to a group spending on elections, either by way of independent expenditures or electioneering communications.
The lawmakers made clear that the money spent from the treasuries of publicly traded companies is shareholder money, not just management's money.
"Would anybody here object if I reached into your wallet and contributed to my favorite candidate?" Capuano asked at the press conference. "It's about whose money is it. ... Let the people who own that money decide."
The effort comes a year and a half after the Supreme Court ruled in the case Citizens United vs. Federal Election Commission that corporations could spend money on independent expenditures to support or oppose candidates for election. This ruling opened the door to a host of new campaign spending vehicles, including non-profit groups that do not have to disclose their donors -- an effective disclosure loophole.
In June, a coalition of more than seventy reform groups urged support for the bill in a letter to Congress. The coalition letter stated:
Responsible corporate governance requires the involvement of informed shareholders and is not a partisan issue. We believe that holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business is important for both the market and for democracy.
Ciara Torres-Spelliscy, an incoming assistant professor at Stetson University College of Law who has written extensively on the issue, told HuffPost, "When you're talking about a publicly traded corporation ... which have millions and millions of shareholders, the idea that a single corporate manager could know how to represent [all of the shareholders] is ridiculous."
Torres-Spelliscy also explained that the Securities and Exchange Commission could require disclosure without congressional action. "The SEC has the authority to require more disclosure than it currently does," she said.
All the lawmakers present at the press conference agreed that the SEC has this authority and stated they had all pressed SEC Chairman Mary Schapiro on the issue.
"As a member of the Banking Committee ... I have been pursuing this as well," Menendez said, "We have not received a commitment from the chair of the SEC."
The lawmakers were joined by Rep. Anna Eshoo (D-Calif.), who had recently pressed the case for outside spending transparency. Last month, Eshoo and Capuano sent a letter co-signed by 22 members of Congress to President Obama voicing support for a leaked draft executive order that would require federal government contractors to disclose their contributions to groups spending money in elections.
Eshoo took that support to the floor of the House last Thursday, voicing opposition to an amendment to the Department of Defense appropriations bill proposed by Rep. Tom Cole (R-Okla.) that would block the administration from enacting that executive order. Eshoo attempted to introduce her own amendment to the bill that would have required all contractors receiving money to disclose their contributions to groups spending in elections, but her amendment was ruled out of order by the Republican majority.
Speaking from the House floor, Eshoo said:
The draft of the President's order would require disclosure requirements for contractors who do business with the Federal Government. Now, any business that does business with the Federal Government is paid with taxpayer dollars. Why shouldn't there be transparency, accountability, and disclosure relative to those dollars? This amendment, your amendment, would prohibit disclosure, which I think is the exact wrong thing to do.
The Cole amendment ultimately passed on a near party line vote with 20 Democrats crossing over to vote in its favor. Rep. Steny Hoyer (D-Md.), the Democratic Whip, ultimately voted against the amendment after publicly stating his opposition to the executive order.
The Senate will now decide what happens to the Cole amendment. The majority of Democrats in the Senate support the president's executive order in favor of disclosure, making passage of the Cole amendment unlikely.
Eshoo told HuffPost that the Democrats are showing "broad support" for the executive order that has "manifested in many ways."
She cited the letters sent to the White House and the many Democrats who voted both against the Cole amendment and the House passage in the previous Congress of the DISCLOSE Act, which would have closed the disclosure loophole but was shelved by the Senate.
According to Eshoo, the clearest evidence of that broad support among Democrats for disclosure is that Republicans "won't even allow" her amendment on the House floor.