The Securities and Exchange Commission (SEC) is getting with the times and is now receptive to Public Citizen’s push to require publicly traded companies to disclose their political spending. At today’s conference, “SEC Speaks,” Securities and Exchange Commissioner Luis Aguilar loudly championed the key reform of political spending disclosure, saying that “investors are not receiving adequate disclosure, and as the investor’s advocate, the commission should act swiftly to rectify the situation.”
Aguilar’s message is pitch-perfect.
Corporations generate massive profits, in part because of investments by their shareholders. And corporations’ new license to spend – a gift in the form of the U.S. Supreme Court’s decision in Citizens United v. Federal Election Commission – could have real consequences to investors.
The idea that U.S. corporations can make unlimited political expenditures without giving its shareholders any knowledge of the spending is both anti-democratic and bad for the market.
Justice Anthony Kennedy’s opinion in Citizens United incorrectly assumed that comprehensive disclosure requirements were already on the books. For publicly traded companies, the SEC can and should close this gap.
Lisa Gilbert is the deputy director of Public Citizen’s Congress Watch division. Follow her @Lisa_PubCitizen and @CorporateReform for the latest on issues like this!