Shareholders in publicly traded corporations have a right to know if their investment is being spent on political campaigns. And voters have a right to know what interests are trying to persuade them. But three years after the U.S. Supreme Court opened the floodgates for American corporations to pour money into campaigns, the transparency it urged in that same decision does not exist. A proposed rule before the U.S. Securities and Exchange Commission offers the best hope yet that publicly traded corporations will have to fully disclose donations to political organizations.
It's notable that since the 2010 ruling in the Citizens United case, few publicly held corporations have donated to super political action committees, which are regulated by the Federal Elections Commission and require disclosure of contributions. Instead, corporations have sent hundreds of millions of dollars to tax-empt groups such as the U.S. Chamber of Commerce, Karl Rove's Crossroads Grassroots Policy Strategies, the American Gaming Association or the National Retail Federation, all of whom engage in political activity on behalf of candidates but are not subject to the same PAC disclosure standards.
The proposed SEC rule would end that charade and require publicly traded corporations to reveal how they spend shareholder money for political purposes. The proposal is an early test of newly installed SEC Chairwoman Mary Jo White, who pledged to be a vigilant guardian over Wall Street abuses. By approving the enhanced disclosure rule, White can send a clear message that she intends to be more sheriff than bystander.