A new rule, sparked by shareholder complaints, would compel publicly traded corporations to disclose much of their political spending to investors. The Securities and Exchange Commission announced last month that it will release a rule-making in April of this year.
The proposal arrives on the heel of the first post–Citizens United presidential and congressional election, which was the most opaque in recent history. The Huffington Post’s Paul Blumenthal reported that over $416 million was spent in the last election from sources that do not disclose donors.
Lobbyists, especially those guiding large amounts of undisclosed corporate cash into the election, are not pleased with the SEC proposal. Trade groups that lobby for Walmart, Chevron and major Fortune 100 companies are registering their disapproval on the SEC’s open comment website.
As we reported last September, trade associations and other nonprofit groups, not Super PACs, have been the preferred legal vehicle for many big businesses eager to take advantage of the post–Citizens United political environment. This is because 501(c)(6) trade groups can mimic the activities of a campaign committee (buying campaign ads, hiring GOTV staff) without the requirement to reveal donors. These trade groups—essentially lobbying coalitions for certain industries or similarly sized companies—are protesting the disclosure rule with a novel argument: there is no no need for new transparency requirements, we’re already regulated.
A letter sent to the to the SEC last week, from a coalition of twenty-nine business trade groups, including the US Chamber of Commerce, the National Mining Association, the Retail Industry Leaders Association and the Missouri Insurance Coalition, makes an appeal for the status quo. The business trade group letter argues that current campaign finance laws—which minimally cover expenditures, the rough amount spent on a television or radio advertisement, but allow for complete secrecy in terms of the source of the money—are already “very substantial”:
Political and lobbying activities are already subject to very substantial disclosure regimes. At the federal level, Congress has enacted detailed legislation governing disclosure of political expenditures, which has been implemented in even more detailed regulations issued by the Federal Election Commission. Similar disclosure obligations are in place at the state level.
Harry M. Ng, the General Counsel for the oil and gas industry lobby, the American Petroleum Institute (API), wrote to the SEC in September of last year to make a similar appeal. API says the proposal would “effectively duplicate or “excessively complicate” current rules. “Existing federal campaign finance laws already regulate corporate political activity in federal activities,” Ng wrote. Though API does not disclose donor information, ExxonMobil, Chevron, Conoco-Phillips and other major oil corporations are dues paying members.