Advocates for campaign finance reform believe they have an opportunity, in President Obama’s second term, to blow the lid on the political spending of corporate America.
Reformers were buoyed by the news this week that Mary Schapiro will step down as chairwoman of the Securities and Exchange Commission (SEC), and are hopeful the next leader of the agency will be more receptive to a petition that calls for forced disclosure of political activities by publicly traded companies.
“Now, with [President Obama] reelected, he can appoint someone who would be more willing to stick their neck out on this,” Bowie said. “If someone new does come in and [SEC Commissioner Elisse] Walter stays, I do think we will have the critical mass to get this moving.”
The August 2011 petition filed with the SEC asks officials to propose a regulation that would force publicly traded corporations to reveal their political giving to shareholders.
The petition has received more than 300,000 comments and the support of academics, investors, elected officials, unions and watchdog groups. Activists want the SEC to place the petition on its next regulatory agenda, which will likely be released soon, and begin a formal rulemaking process that could lead to new regulations.
The effort is increasingly seen as perhaps the best hope for campaign finance advocates, who have failed to gain traction for reform proposals in Congress despite the unprecedented political spending of the 2012 election cycle.
“We have had trouble getting a vote in Congress. We have had trouble getting the FEC [Federal Election Commission] to do its job. This is a chance for the SEC to do something about this,” Bowie said.
A decision by the SEC to take up the petition would send shockwaves through Washington, where corporate money flows to a panoply of trade groups and associations that lobby the government. Many of those groups keep their donors secret.
The biggest business lobby of them all, the U.S. Chamber of Commerce, strongly opposes the petition. Chamber spokeswoman Lisa Burgess said the “apparent goal” of the effort is “to silence the business community by creating an atmosphere of intimidation under the cover of investor protection.”
“Campaign finance reform is the [purview] of Congress and the FEC. It is not, and should not be, a function of the SEC,” Burgess said.
Burgess said the Chamber has shared its views with SEC officials in meetings and will submit a comment letter as well.
Another powerhouse trade group, the American Petroleum Institute (API), has likewise made its opposition known.
“Requiring redundant disclosures would waste corporate resources and harm shareholder value. Shareholders themselves have repeatedly and overwhelmingly voted against the types of disclosures sought by this petition,” said Carlton Carroll, an API spokesman.
In a September letter to the SEC, Harry Ng, API’s vice president, general counsel and corporate secretary, said if the petition became a rule, it would discourage companies from participating in trade associations.
“Corporations might decline to contribute to or become members of trade associations that periodically took controversial political positions, even if they stood to benefit otherwise from membership, for fear of having the trade association’s views incorrectly attributed to the member corporations,” Ng said.
Outside spending groups that were active during the 2012 campaign have also voiced concerns. Americans for Prosperity (AFP), a group tied to the billionaire businessmen Charles and David Koch, fears where the new regulations might lead.
“President Obama has shown a willingness to use executive privilege, unelected bureaucrats and regulatory control to advance his agenda — so of course there is concern that his appointees will share that desire to exceed their proper role,” said Levi Russell, an AFP spokesman.
The group has made its worries known to the SEC.
“It is outrageous for the Securities and Exchange Commission to even consider doing an end-run around Congress, the courts and the FEC by creating for itself a new mission to regulate political speech,” said Phil Kerpen, AFP’s then-vice president of policy, and Steven Lonegan, the group’s New Jersey state director, in a January 2012 letter to the SEC.
The group was one of the biggest political spenders this last campaign, spending more than $39 million on electioneering communications and independent expenditures, according to the Center for Responsive Politics.
The petition wouldn’t affect private companies like Koch Industries, however.
Campaign finance advocates are undeterred by the resistance, and are pressuring Obama to appoint a new chairman of the SEC who will be receptive to their cause.
“We clearly want a chairperson to promote the public as well as the shareholders’ interests. Having disclosure of political contributions is very much in favor of the shareholders’ interests,” said Craig Holman, a government affairs lobbyist at Public Citizen.
Holman has been in several meetings with SEC officials to discuss the petition, and said Walter seemed open to it.
“She hasn’t expressed any hostility to the idea and seemed open to discussion. Like the other commissioners, except for [Luis] Aguilar, she didn’t want to bring it up before the election because it was such a political hot potato. … I have considerable confidence in her,” Holman said.
Aguilar made waves in February when he said he supported companies disclosing their political contributions to their investors. That speech has since been quoted in more than 52,000 form letters filed to the agency.
Advocates have tried to drive up the number of comments on the petition as part of a pressure campaign to get the SEC to act. Supporters have put up posters in favor of the petition outside of Union Station — where SEC staff and commissioners likely see them on their way to work — and held demonstrations outside the agency’s headquarters.
Supporters are optimistic that they can force the SEC to put the petition on the agenda.