Among the many lines of attack campaign finance reformers have opened on the post–Citizens United world of unlimited, dark corporate money, one of the most interesting involves shareholder disclosure. The argument is that if corporations are spending massive sums from their own coffers to influence politics, then shareholders should at least know what the money is going towards. In his opinion in Citizens United, Justice Anthony Kennedy erroneously assumed this was already law—but it isn’t.
Corporations benefit from secret giving because it obscures the true goals of many seemingly earnest political advertisements; an ad criticizing a candidate for supporting health care reform would seem much less convincing people knew for certain it was funded by Aetna. If shareholders were able to discover what kind of electioneering the corporation purchased, that would push corporate spending into the daylight.
Public Citizen has been urging the Securities and Exchange Commission to require publicly traded companies to disclose political donations, and today it picked up an important endorsement—from a current SEC commissioner. At an “SEC Speaks” event in Washington today, commissioner Luis Aguilar said that “investors are not receiving adequate disclosure, and as the investor’s advocate, the commission should act swiftly to rectify the situation.”
Lisa Gilbert, who’s been leading the push from Public Citizen, immediately praised the remarks. “Corporations generate massive profits, in part because of investments by their shareholders,” she said. “And corporations’ new license to spend—a gift in the form of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission—could have real consequences to investors.”
If the White House is serious about campaign finance reform—as it claimed to be when announcing it would seek Super PAC donations—it could get behind this push. Similarly, another way to force companies into disclosure would be to issue a federal rule that any corporation with a government contract must reveal its political funding efforts. The administration drafted such a rule in the spring, but Obama has yet to sign it.