August 31, 2015

Warner, Kaine Push SEC To Require Public Companies To Disclose Their Political Spending To Shareholders

WASHINGTON – U.S. Sens. Mark R. Warner and Tim Kaine (both D-VA) today pressed the Securities and Exchange Commission (SEC) to require public companies to disclose political spending to their shareholders, a move that would increase transparency in the U.S. political process following the Supreme Court’s 2010 Citizens United decision that unleashed unlimited corporate spending into American elections.

Without requirements for disclosure, corporate political spending can become “dark money” that influences elections without voters being able to see the source of the money or take into account what special interests may be behind it. In a letter sent today to SEC Chairwoman Mary Jo White, Sens. Warner and Kaine wrote that requiring public corporations to disclose their political spending to shareholders would bring “much needed accountability to shareholders and transparency to corporate political spending.”

Wrote the Senators, “We believe this is consistent with the SEC’s requirement for public companies to disclose meaningful financial information to the public. We strongly disagree with the Supreme Court’s 2010 decision in Citizens United v. FEC that allowed unlimited and unchecked corporate spending on campaign ads and various other political communications. This reversed long-standing precedent and has moved our country in a different and disturbing direction when it comes to corporate influence in politics.”

After a record number of people signed a petition asking for the SEC to address shareholder disclosure of political spending, the SEC added the item to its rulemaking agenda for 2013. The rule was never completed, however, and in 2014, it was pulled from the SEC’s docket with little explanation 

In today’s letter, the Senators wrote, “We add our voices to the many who have expressed frustration and disappointment that the SEC decided to remove this issue from its regulatory agenda entirely…. We ask that you make this a top priority for the SEC in the near term, and inform us of the basis for your decision should you not plan to include it on the Commission’s agenda for the upcoming year.”

In addition to Sens. Warner and Kaine, the letter was signed by Sens. Jeff Merkley (D-OR), Bob Menendez (D-NJ), Charles Schumer (D-NY), Sheldon Whitehouse (D-RI), Tom Udall (D-NM), Ron Wyden (D-OR), Patrick Leahy (D-VT), Mazie Hirono (D-HI), Kirsten Gillibrand (D-NY), Jack Reed (D-RI), Bernie Sanders (I-VT), Patty Murray (D-WA), Tammy Baldwin (D-WI), Dick Durbin (D-IL), Al Franken (D-MN), Debbie Stabenow (D-MI), Richard Blumenthal (D-CT), Elizabeth Warren (D-MA), Maria Cantwell (D-WA), Sherrod Brown (D-OH), Martin Heinrich (D-NM), Dianne Feinstein (D-CA), Edward J. Markey (D-MA), Jeanne Shaheen (D-NH), Chris Coons (D-DE), Angus King (I-ME), Amy Klobuchar (D-MN), Gary Peters (D-MI), Michael Bennet (D-CO), Brian Schatz (D-HI), Bob Casey (D-PA), Cory Booker (D-NJ), Chris Murphy (D-CT), Bill Nelson (D-FL), Ben Cardin (D-MD), Barbara Boxer (D-CA), Barbara Mikulski (D-MD), Jon Tester (D-MT), Tom Carper (D-DE), Claire McCaskill (D-MO), Harry Reid (D-NV), and Heidi Heitkamp (D-ND).

The full text of the letter appears below. A PDF of the signed letter is available here.

Dear Chair White:

We write to express our support for the Petition for Rulemaking, File No. 4-637, Petition to Require Public Companies to Disclose to Shareholders the Use of Corporate Resources for Political Activities, dated August 3, 2011 (the “Petition”), submitted by the Committee on Disclosure of Political Spending, which the Securities and Exchange Commission (SEC) is currently considering.

If implemented, the Petition would require public companies to disclose to their shareholders how they use corporate resources for political activities, bringing much needed accountability to shareholders and transparency to corporate political spending. We believe this is consistent with the SEC’s requirement for public companies to disclose meaningful financial information to the public.

We strongly disagree with the Supreme Court’s 2010 decision in Citizens United v. FEC that allowed unlimited and unchecked corporate spending on campaign ads and various other political communications. This reversed long-standing precedent and has moved our country in a different and disturbing direction when it comes to corporate influence in politics. 

Because shareholders are the true owners of a corporation, a public company should be required to disclose to its owners how their money is being spent. When it comes to spending on political activity, only roughly 2.2% of all public companies in the United States make such disclosures, and they do so voluntarily. [i] 

As you know, the SEC has received more than 1 million public comments in favor of political spending disclosure, including from leading academics in the field of corporate governance, investment managers and advisors, and the investing public. A number of State Treasurers have weighed in supporting the Petition, as they have “an obligation to make sure public funds are invested responsibly and accountably.”[ii] In addition, 70 foundations wrote to the SEC in support of political spending disclosures to “know whether companies in which [they] invest are making questionable or controversial political expenditures.”[iii]

Notably, we are also joined in our support for the Petition for rulemaking by former SEC Chairmen Arthur Levitt and William Donaldson and former Commissioner Bevis Longstreth. In the letter they sent to you at the end of May, they highlight that the SEC’s failure to act “flies in the face of the primary mission of the Commission, which has since 1934 been the protection of investors.”[iv]  We add our voices to the many who have expressed frustration and disappointment that the SEC decided to remove this issue from its regulatory agenda entirely.

We appreciate your willingness to strongly consider the importance of this rulemaking and reconsider the decision to remove it from the SEC’s regulatory agenda.

We ask that you make this a top priority for the SEC in the near term, and inform us of the basis for your decision should you not plan to include it on the Commission’s agenda for the upcoming year.


[i] Calculation made using number of public companies that disclose corporate political spending divided by total number of public companies. Dan Strumpf, “U.S. Public Companies Rise Again,” The Wall Street Journal, Markets, 5 February 2015,http://www.wsj.com/articles/SB10001424052702304851104579363272107177430

[ii] State Treasurers Janet Cowell (NC), Seth Magaziner (RI), Ja