Former SEC officials press for corporate giving disclosure

Former SEC officials press for corporate giving disclosure
© Anne Wernikoff

Former officials are calling on the Securities and Exchange Commission (SEC) to issue new regulations requiring all publicly traded companies to disclose their political spending.

In a letter to SEC Chairwoman Mary Jo White, three former agency leaders — former chairmen William Henry Donaldson and Arthur Levitt and former Commissioner Bevis Longstreth, appointed by Ronald Reagan ­­­— backed a rule-making petition sent to the SEC in August 2011 that received over 1.2 million comments.

ADVERTISEMENT

Without the political spending information, the supporters of the rule say, shareholders are left in the dark, unable to make informed investment decisions or determine whether their money is going to groups that advocate for issues they oppose.

Opponents, however, have argued the SEC is already too inundated with finalizing rules required by the 2010 Dodd-Frank Wall Street reform law to take on campaign spending.

The debate stems from the Supreme Court’s Citizens United decision, which allowed corporations to spend freely on politics from their general treasuries. The case spurred the creation of super-PACs and increased the amount of spending flowing through tax-exempt organizations that aren’t required to disclose donors. The funds became known as "dark money."

Though corporations were given greater freedom to spend shareholder money, the former agency leaders said there have been no rules or procedures established to ensure that shareholders, “those who actually own the wealth of corporations,” are informed of company decisions to spend their money on politics.

“It is now five years since Citizens United and almost four years since Petition 4-637 was filed,” they said in their letter. “The Commission’s inaction is inexplicable. Its failure to act offends not only us, who are alumni of this agency struggling to retain our deep pride of association, but investors and the professionals who serve them.”

Despite pressure from outside groups, the commission declined to add the rule to its 2015 regulatory agenda. The measure was included on the agency's 2013 agenda, but later abandoned amid fierce pressure from business groups and congressional Republicans.

Longstreth served from 1981 to 1984 as the 60th Commissioner of the SEC, Levitt served from 1993 to 2001 as the 25th chairman of the SEC and Henry Donaldson served from February 2003 to June 2005 as the 27th chairman of the SEC.