Earlier this year, Justice Stevens ended his powerful dissent in Citizens United v. Federal Election Commission with the following words: "While American democracy is imperfect, few outside the majority of this Court would have thought its flaws included a dearth of corporate money in politics." While many have focused on how the Court's decision in Citizens United challenges the integrity of our democratic process, it also represents a watershed moment in corporate governance.
The ruling leaves investors in a world where company managers can legally spend shareholder capital on independent electioneering advertising without checks and without limits. As companies are not required to disclose their independent spending, shareholders cannot determine how much company capital will be spent on politics and what its impact will be on the bottom line. We now need to use every available avenue to hold corporations and their boards of directors accountable for their political spending.
The regulations barring spending from corporate treasuries on campaigns did not just shape our political process; they also offered crucial protections for shareholders who could suffer from excessive corporate campaign spending. The potential gap between the interests of company managers and those of their shareholders represents a basic problem in corporate governance. Allowing unfettered campaign spending from corporate treasuries threatens to widen this gap.
Studies of the relationship between spending on politics and risk and returns for shareholders bear out this risk. A study by economists at the University of Minnesota revealed a correlation between high levels of political spending and falling corporate governance standards and returns. The International Monetary Fund also released a working paper that demonstrated a negative relationship between spending on lobbying and performance among lending institutions. The problem is clear -- without restrictions and without shareholder disclosure around campaign expenditures, companies, and by extension their shareholders, suffer.
The current system denies U.S. shareholders measures to ensure transparency and accountability in their companies. The United States should follow the example of other countries that have required transparency and accountability of corporations that engage in political spending to their investors. As an example, in 2000, the United Kingdom amended its Companies Act to require all British companies to disclose and seek the consent of their shareholders before making substantial political contributions. As a result, managers submit proposed political budgets to their shareholders each year. A recent study by the Brennan Center for Justice suggests that this approach has protected investors and restricted the flow of excessive financial resources from British corporations into the political process. By mandating disclosure, the UK allows shareholders access to meaningful information they can use to hold their companies accountable. Congress should adopt legislation that gives shareholders information and the tools they need to hold corporations in which they invest accountable for their political spending.
Investors should not wait for new laws to provide necessary protections; we should use tools that already exist to ensure that corporations do not exploit the new reality to undermine their companies' financial health. Shareholders and institutional investors across the nation should demand more accountability and transparency from the corporations they own.
In the 2010 proxy season, the New York City Employees' Retirement System (NYCERS), the largest pension fund in New York City, filed shareholder resolutions requiring disclosure of political spending by numerous corporations in which it is invested. Now, we are calling for other institutional investors across the country to join us in support of these resolutions and to help us build a national shareholder movement for increased corporate disclosure and accountability. By working together we can help give all shareholders a much needed voice in how corporations decide to spend money on elections.
The Supreme Court's decision has created a new reality for how corporations participate in political campaigns and, by extension, how money influences our government. In the months ahead, corporations, candidates, investors and the public will all face a choice. Will we accept new levels of political spending with no limits and little disclosure or will we demand a new approach and sense of public responsibility from our country's corporations? This decision will define our democracy for generations to come. It is up to all of us to get it right.
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Citizens United v. Federal Election Commission - Wikipedia, the ...
Citizens United challenges the strident side of Supreme Court ruling
After victory, conservatives mount new challenges to campaign finance limits
Post-Citizens United, Courts Begin Reshaping Campaign Funding Law
In his Citizens United vs. Federal Election Commission dissenting opinion, Justice Stevens said, “Corruption can take many forms. Bribery may be the paradigm case. But the difference between selling a vote and selling access is a matter of degree, not kind. And selling access is not qualitatively different from giving special preference to those who spent money on one’s behalf.”
The Declaration of Independence reads, “All men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
It doesn’t appear that the Creator nor the Founding Fathers intended to give corporations equal standing with human beings, little lone dominion over them, but an activist Supreme Court, casting aside conservative judicial restraint, has seen fit to award First Amendment rights to our corporate “relatives”.
In less than two hundred and fifty years, America has come full circle from where it started when our forefathers tossed three shiploads of East India Company tea into Boston harbor in protest against the monopolistic collusion between big business and a corrupt British Parliament.
If Congress wants to stop this, they can. They won't do it, because they will be receiving so much money from the corporations that they don't want to kill off their source of extra funding.
This is a much broader corporate governance problem than Citizens United. Sure, put that ruling and its effects on the very long list of potential abuses that Corporate Boards & Management have come to expect as their due to engage in, understanding that a certificate of common shares doesn't come with a D or R or L or R tucked away in the frilly borders. Regardless of one's political persuasion, if you own common stock as an individual in this country, you have about as much chance of influencing a proxy vote as my pack of terriors do. The authors are putting to print what is becoming a growing movement in the investment community for additional disclosures that give voting shares the opportunity to vote for additional dividends as opposed to, say, spending owner's capital on poliical contributions.
public financed elections.
free equal prime time for all on the ballot.
Guarantee level playing field on buying political ads, by limiting the % of ads, any one group can purchase in any given market.
Senator Mitch McConnell 2005 - 2010
Select cycle and data to include:
2010200820062004200220001998Career Campaign Cmte Only
Leadership PAC Profile Only
Campaign Cmte & Leadership PAC Combined
Top 20 Industries contributing to Campaign Cmte and Leadership PAC
Industry Total Indivs PACs
Securities & Investment $1,258,924 $972,925 $285,999
Lawyers/Law Firms $1,000,508 $748,408 $252,100
Retired $926,780 $926,780 $0
Real Estate $832,630 $598,130 $234,500
Health Professionals $807,100 $512,200 $294,900
Insurance $764,483 $274,983 $489,500
Lobbyists $701,103 $683,364 $17,739
Pharmaceuticals/Health Products $617,985 $166,000 $451,985
Republican/Conservative $530,933 $476,183 $54,750
Oil & Gas $518,350 $267,650 $250,700
Commercial Banks $488,350 $272,850 $215,500
Hospitals/Nursing Homes $453,750 $258,550 $195,200
Pro-Israel $415,710 $304,200 $111,510
General Contractors $379,421 $282,421 $97,000
Leadership PACs $371,044 $0 $371,044
Misc Finance $369,484 $326,484 $43,000
TV/Movies/Music $320,400 $154,400 $166,000
Misc Manufacturing & Distributing $314,350 $200,350 $114,000
Computers/Internet $314,335 $128,750 $185,585
Misc Business
Second, It is up to the investors to deman disclosure, not the voters. If we are not investing in that company, we have no right to demand say in or explanation from their spending habits.
When a political ad is produced, there is a line at the bottom of the page, or is verbalized if the ad is in any other media, that discloses the source of the ad. If voters are not paying attention to that, then they are failing in their role in this process.
This really sounds like another attempt to thwart the ruling. Guided by the philosophy that corporations are inherently evil. As I have said from the first day almost this decision was announced, this will only result in more ads for the populace to sift through to find the candidate or proposition they support. The ruling did not remove donation limits, nor did it legalize bribery. It only removed the time constraints on the ads. They did not bestow voting rights.
So, instead of getting all heated up about the lack of constraints, begin supporting your candidate and proposition. Support the companies that are supporting your candidate or proposition. Remove your support from those that do not. This is how it works in a free election.
Same thing for investors. If they are unwilling to do their homework, they deserve to lose their money.
Unless one chooses to vote for guy with the great hair, or the woman who is pretty. Then no amount of disclosure will affect that. But then, these folks aren't apt to vote anyway.
Incorporation in all its forms int not a right its a privalege that the government give to citizens for the bennefit of society (economic growth) if the benenfit is costing other socially important goals (democracy - equality - the institutions of the republic) then the governemtn can recind that priviliedge or change the rules, its called soverign authority - government has it corporations dont.
A corporation is not a human being, and humans should not be disgraced by their attempted association, or have to defend ourselves against it.
This court created right is not in the constitution, it was created by lawyers.
Corporations are do not have a right to free speech or any other human right.
They certainly have no right to influence our government - a government for and by the PEOPLE.
But the case was about freedom of speech. Not who was making that speech, but speech itself.
And all they can do legally, is produce campaign ads to try to sway the voter one way or another. They still can't vote, or donate unlimited funds directly to a candidate, nor can they bribe. The only thing that has changed is the timeline in which they can publish campaign ads.
it is also disproven by the fact that corporate personhood does not exist untill the 1870 with the Santa Rosa Decision and before that we had coprorations with those protections.
Corporatiosn should not have an automatic right to freee speech, self incrimination, council, double jepordy etc, these can still be granted to them but in the form of privaleges - which can be rencisnded if they do something wrong (with due process) the difference is taht the people that own and work for the corporatiosn have those rights but not the corporations it self
"The United States should follow the example of other countries that have required transparency and accountability of corporations that engage in political spending to their investors."
This must be legislated. In the meantime, we must closely watch their political contributions and hold them accountable in the public limelight.