House Dems to SEC: Make companies come clean on political spending

By Peter Schroeder - 10/20/11 12:44 PM ET

A group of House Democrats wants the government to require public companies to disclose all political spending in an effort to combat the "radical" Supreme Court decision that opened the door for corporations to spend on elections.

In a letter sent to Securities and Exchange Commission (SEC) Chairman Mary Schapiro, 43 House lawmakers said shareholders currently are "completely in the dark" on a company's political activities, meaning their money could be going toward political attack ads without their assent.

"Shareholders cannot hold corporate management accountable for decisions the shareholders never knew were made," they wrote. "The present system is undemocratic and untenable...[and] serves the interests of no one except corporate executives wishing to skirt accountability."

Instead, the SEC should require public companies to disclose on regular public documents, like quarterly reports, should include a detailed rundown of political spending by each company, including donations to super PACs, the lawmakers said.

The letter comes in response to the Supreme Court's decision last year in the Citizens United v. Federal Election Commission case. That controversial decision ruled that government limits on corporate funding of political broadcasts for or against individual candidates violate the right to free speech guaranteed under the Constitution and opened the door to more business spending in elections.

“Now, corporations can donate unlimited amounts of shareholder funds to Karl Rove political attack groups without ever telling shareholders how their money is being used," said Rep. Gary Ackerman (D-N.Y.), who spearheaded the letter. "The SEC should empower shareholders with the ability to hold corporate management accountable for their decisions by requiring transparency in corporate political spending. Shareholders have a right to know.”

Ackerman previously has introduced legislation that similarly would force corporations to disclose political spending, but it has languished in the Republican-controlled House.

The push for corporate disclosure also has earned the backing of several open-government groups, such as the Sunlight Foundation and the U.S. Public Interest Research Group (U.S. PIRG).

"The proposed SEC disclosure rules would allow us to follow the river of corporate money and may well be the first step in damming it up," U.S. PIRG's Blair Bowie said.