Corporate influence over our political system is one of the concerns heard loudest from the Occupations springing up everywhere these days. The standard corporate response to those who notice that corporate capture of politics is harming our country goes something like this: (in your whiniest, spoiled-child-complaining-to-Mom-like voice): "but corporations are people too and dominating the political discourse is ourri-ight. The Supreme Court even says so!" That's technically true little Jonny, but you and I both know it is also some of the most dangerous horse s--t our legal system has ever produced. While corporations are legally recognized "persons," the reality is that public corporations are vast, ungainly amalgamations of people and institutions. And their political influence is eating away at the fabric of our Republic with increasingly greedy mouthfuls. On issue after issue, corporate agendas differ from the interests and policy positions of most Americans, and on issue after issue "we the people" are losing out to "them, the corporations." Let's take perhaps the most common way in which ordinary Americans and big corporations interact -- taxes. A recent report outlines how some of America's largest and most profitable companies in fact paid NEGATIVE taxes over the past several years. Why are ordinary Americans subsidizing massive and profitable corporations? Publicly traded companies have diffuse and dispersed constituents -- shareholders, employees, executives, trustees, customers, suppliers, communities, etc. Each of these categories can be further disaggregated according to gender, geography, race, industry, political affiliation, etc. In short, big corporations have a lot of competing stakeholders that all have potential to help or harm the bottom line. Navigating these interests is one of the main reasons why corporate managers and directors earn such, ahem, "healthy" salaries -- it is very sophisticated and difficult work. Unfortunately, decades of wrongheaded incentive structures have got us to the point where corporate managers generally default to achieving short term profits while taking on medium term risks. That is why the Shareholder Protection Act (SPA), stands to make everyone's life easier and why it should be supported by everyone from Wall Street Occupiers to Wall Street Fat Cats and all of the well-intentioned-but- a-bit-confused-folks in between. And don't worry little Johnny, it does so in a way that won't impede their (current) first amendment rights. What it proposes, quite simply, is the establishment of a commonsense framework by which corporations will decide internally and disclose externally how they insert themselves into politics. By establishing a legal structure with several rules that apply when public companies wish to use corporate resources for political activity, the SPA addresses two of the riskiest, costliest, and most controversial aspects of corporate management today -- government relations and public relations. One the one hand, corporations allocate massive investments of human capital and money toward the political process. Those are resources that could be otherwise devoted to strengthening their businesses or rewarding their shareholders through dividends -- you know, things that corporations are supposed to do with excess cash. On the other hand, corporations are regularly in the news for making a controversial contribution to some politician or ballot initiative. When these controversies break, corporate managers are forced to take their eyes off the ball, scrambling to mend fences with offended constituencies. Corporate managers need better systems to support and streamline their political giving. Better, um, "occupied" corporations would be better governed corporations. The SPA would be a powerful mechanism to reign in out of control corporate spending by:
- requiring specific disclosure of political contributions,
- providing a meaningful voice to independent (non-management) corporate directors,
- mandating prior shareholder approval of the amount budgeted to politics.
That doesn't sound unreasonable, now does it? It shouldn't; in addition to addressing some of the central points that the Occupy Everything movement is coalescing around, the bill has been supported by some of leading corporate governance experts in the land. The SPA would apply to all publicly traded companies equally so it won't place some companies are at an inherent disadvantage.
What the SPA would do is allow shareholders to shoulder some of the responsibility that has been wrongly placed in the hands of corporate managers. So when future controversies arise, corporate managers won't be the only ones to blame -- the processes of approving expenditures will be transparent to all. Currently, shareholders can only guess at how corporations are making political expenditures and they have virtually no means by which to alter those policies. Once the SPA goes into effect, if you own stock in a company that is spending money in questionable ways, you have the option of either trying to alter those policies through the proxy process or disinvesting. Your choice. We can all agree that informed decision-making is one of the core tenants of American democracy and capitalism.
To the delight of public interest groups and shareholder advocates, the Shareholders Protection Act was introduced by Senators Menendez (D-NJ) and Blumenthal (D-CT) in July, but it hasn't received much love from the Wall St. occupied political establishiment since being introduced. Given the hunger for alternatives to corporatacracy that #OWS has manifested, there is reason to hope the SPA will get a second look by politicians concerned about their chances for re-election.
The next step is for the SPA to be considered by the Senate Banking Committee. So regardless of whether you are an Occupier, or presently find yourself in the uncomfortable position of being Occupied, the appropriate next step is to contact your federal representatives and urge them to give the SPA a fair hearing.
Abraham Lincoln told us that ours is a "government of the people, by the people, for the people." Let's take it back.