Ever since the U.S. Supreme Court’s landmark 2010 Citizens United decision that allows unlimited corporate campaign spending, American politics has become less and less transparent. Just now, things are murkier than they’ve been in generations, with Super Political Action Committees so far this year taking in more than $300 million and no one knowing for sure where most of the money comes from.
This means voters often have no way to tell who is trying to sway their votes, when that very knowledge can be the best way to instill a little healthy skepticism in voters about the many messages they see and hear during election seasons.
There’s little prospect that Supreme Court justices, who explicitly – and mistakenly – stated in the Citizens United decision that it would not likely make political donations more secretive, will alter their decision anytime soon. But one federal agency could change things quickly if it took a page from the California initiative book.
That would be the Securities and Exchange Commission, whose job is to protect investors from fraud and other wastes of shareholder money by publicly traded companies.
All the SEC needs to do is adopt a rule requiring firms to disclose all their political spending. “Corporate shareholders,” wrote state Treasurer Bill Lockyer in an essay the other day, “…have a right to know (that) a company’s policies and actions advance the firm’s legitimate business and financial interests and do not endanger its value.”
Shareholders today generally have no way to know whether a portion of the proceeds of any company they invest in go to advance political causes that may or may not be related to the business itself.
Of course, if corporations disclose to their shareholders, it won’t be long before the information becomes public via news media and the Internet.
There’s nothing to guarantee this would in any way curb the record levels of corporate political spending seen so far this year. But it could make voters more informed about who’s trying to sell them what.
That’s what California has required for years in its initiative politics, where ads specify the leading contributors to any proposition-related TV or radio commercial. Significant donors to campaign committees and candidates are routinely listed on the secretary of state’s Web site, too. Donors of $5,000 or more must disclose within 10 days. That’s how the public came to know that big tobacco companies, for example, spent more than $47 million to beat back the June Proposition 29, which narrowly missed imposing an additional $1 per pack tax on cigarettes and a similar levy on other tobacco products.
The California disclosures are usually included in small type or fast talk at the end of spots because voters rejected an early-2000s initiative that would have required listing the top five donors to any TV commercial within the ad in type matching the largest anywhere else in that message. But at least they are present for anyone who cares to look or listen.
The federal government requires nothing like that. This is unfair to voters and it puts investors large and small at risk.
Both of California’s largest public pensions systems, CalPERS and CalSTRS, among the world’s largest stock and bond investors, routinely support shareholder resolutions calling for disclosure and board oversight of corporate political spending. So far, that hasn’t gotten the job done.
To date, just over 100 major companies have adopted full-disclosure policies. These include Altria, Capital One, Pfizer, Wells Fargo, Safeway, Verizon, Merck, Microsoft and General Electric, to name a few. None has been harmed by that self-imposed reform.
What’s happened in California since disclosure was first required by the Jerry Brown-sponsored Political Reform Act of 1974 demonstrates that corporations are not deprived of a voice by disclosure, while voters who care can at least be informed.
Take that June tobacco tax initiative, whose outcome wasn’t finally known until almost a month after the vote. The widely-reported tobacco company spending was the main reason the measure lost after it enjoyed poll leads of almost 2-1 before the spending onslaught began. Polls through the spring campaign season showed that the more the tobacco companies spent, the more support for the per-pack tax dropped.
Corporations exercised their rights to free speech in that campaign, but voters at least knew who was talking.
By contrast, many television commercials in the ongoing presidential campaign don’t specify who is paying, beyond giving the name of a Super PAC. Corporate and fat-cat donors mostly remain secret.
That’s wrong because it does not allow for a fully informed electorate. Forcing corporations to disclose would not in any way limit their Supreme Court-given right to unlimited spending, but at least there would be some transparency.
Congress could fix this, but won’t. The SEC can do it, too, and should. To support this idea, go to the Web site of the Public Citizen organization, www.citizen.org/action and click on “Tell the SEC to Require Corporations to Disclose Political Spending.
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