A heated debate in the US around disclosure of corporate political spending has intensified this week with nearly every Senate Democrat calling on the Securities and Exchange Commission (SEC) to make it a requirement for public companies.
It follows the Republican-controlled US House of Representatives trying to prevent the SEC from mandating disclosure of corporate political spending in June, and a bipartisan group of former top SEC officials calling on chair Mary Jo White to introduce disclosure in May.
The latest intervention, by 44 Senate Democrats, is also aimed at White. In a letter, the senators say that shareholders are true owners of a corporation; therefore a public company should be required to disclose to its owners how their money is being spent.
The letter expresses support for a rulemaking petition on corporate political spending submitted by the Committee on Disclosure of Political Spending in 2011. The Committee was co-chaired by Lucian Bebchuk, the well-known professor of law, economics and finance at Harvard Law School and Robert Jackson, professor of law at Columbia Law School.
Since its recommendation, the SEC has received more than one million comments in favour of transparency on corporate political spending; notably, from former SECchairmen Arthur Levitt and William Donaldson, and former commissioner Bevis Longstreth.
However, despite widespread support, White has made little comment on the issue. An SEC spokeswoman declined to comment to the Wall Street Journal on the Senators’ letter to White this week. The Wall Street Journal reports that in 2013, White removed the political spending rulemaking petition from the SEC’s priority list, saying she was focused on completing Congressionally-required rulemaking mandates form the 2010 Dodd-Frank law and 2012 Jumpstart Our Business Startups Act.
The Senators’ letter to White this week asks her to reconsider this decision and inform them of the basis for her decision if it isn’t on the Commission’s agenda for the upcoming year.
However, the Republican-controlled US House of Representatives is making moves to block mandatory disclosure of corporate political activities.
When the US House Appropriations Committee approved the Fiscal Year 2016 Financial Services Bill in June, it included a prohibition to the SEC from implementing a rule to require disclosure of corporate political spending. Congress will start to scrutinise the bill this month.