|Mary Jo White.|
When Mary Jo White took over as chair of the Securities and Exchange Commission (SEC) nearly two years ago, there was hope she'd require publicly traded companies to end the secrecy about their political spending.
The SEC had been considering such a rule. By last fall, it received more than 1 million comments on the proposal -- a record. Only a handful of those comments were negative. Typically, the SEC gets fewer than 100 comments on its proposed rules.
Despite the overwhelming support for such disclosure, the SEC is still considering the rule.
Right now, corporations are able to secretly spend billions of dollars to influence politicians on issues that are often controversial. As Teamsters General Secretary-Treasurer Ken Hall pointed out in comments to the SEC, that can hurt investors. It can also go against the investors' self interest.
Union pension funds that invest in corporations should -- at the very least -- know if they're donating money to anti-worker candidates, stink tanks or ALEC, the escort service for corporations and politicians.
As Zoe Carpenter pointed out in The Nation,
The point of requiring corporations to disclose their political donations is twofold. First, it’s intended to protect investors, which is the SEC’s responsibility. Shareholders “understand that they have a right to know if the company they invest in is spending money on controversial political causes,” said Lisa Gilbert, the director of Public Citizen’s Congress Watch Project.
Secondly, reformers hope that disclosure will help stanch the flow of secret money in elections, which has increased dramatically since the Supreme Court’s ruling in Citizens United. A critical assumption in the majority’s ruling was that “prompt disclosure of expenditures” would allow shareholders to “determine whether their corporation’s political speech advances the corporation’s interest in making profits.” But without a mechanism to ensure that companies are truly transparent about their political spending, the Court’s faith in “the procedures of corporate democracy” is just wishful thinking.
Remember when Target donated $150,000 in cash and in-kind goods and services to a gubernatorial candidate who opposed gay marriage? The problem for Target was that it promoted itself as friendly to people of all sexual orientations. It even bragged that it had been recognized as one of the best places to work for LGBT equality.
Consumers and shareholders went ballistic when they found out about the donation to the anti-gay marriage candidate.
Imagine the reaction among union pension fund managers if they suddenly learned they invested in companies that spent heavily to promote right-to-work laws. And yet they currently have no right to meaningful information about where corporations spend their political dollars.
"The financial impact of increased corporate political spending on investors is tangible and significant," wrote Hall in his comments to the SEC. "Meaningful disclosure of corporate political spending is sorely needed."