By Benjamin Goad - 10/30/13 04:14 PM EDT
The Securities and Exchange Commission should move forward with regulations requiring publicly traded firms to disclose their political spending to shareholders, a pair of Democrats on the Senate Banking Committee said Wednesday.
Sens. Robert Menendez (D-N.J.) and Elizabeth Warren (D-Mass.) are seeking to ramp up pressure on the agency as it weighs hundreds of thousands of comments from proponents of the plan.
“It’s simple — it’s shareholder’s money,” Menendez said, brushing off warnings from critics who say implementing the regulation would be complicated and expensive. “I do not accept that it is so onerous on the companies as so to undermine their ability to be successful financially.”
Warren, who is a co-sponsor of the bill, urged the SEC to move forward with the rulemaking in lieu of congressional action.
“We don’t have to have legislation for the SEC to do the right thing,” said Warren, a freshman senator who has pushed financial regulators to be more aggressive. “They have the power to do the right thing right now.”
Speaking at a briefing on Capitol Hill, Warren and Menendez called upon supporters of the plan to press the SEC to enact the rule. The agency revealed last December that it was considering proposing the rule in response to a petition put forward by a group of law professors and advocates.
The petition was a direct response to the dramatic increase of corporate money in politics in recent years, which they attributed to the U.S. Supreme Court’s Citizen United ruling.
Since then, the SEC has been flooded with more than 640,000 public comments, the vast majority of which back the petition.
Critics call the initiative a brazen effort to drive business interests out of politics and say the SEC is ill equipped to wade into the campaign finance issues, traditionally the Federal Election Commission's (FEC) territory.
Proponents, meanwhile, contend that investors have a right to know how companies are spending their money. Among them is Robert Jackson, a professor at Columbia Law School who is helping to lead the charge in favor of SEC action.
“Without transparency, shareholders can’t possibly hold directors and executives accountable when they spend corporate money — shareholder money — on politics,” Jackson said.
The SEC declined to comment Wednesday afternoon on the status of the petition.