Well, one good sign is that the opposition starts getting nervous about your progress.
That’s why we took it as a positive sign that the U.S. Chamber of Commerce recently stepped up attacks on shareholders who attempt to make companies disclose political spending.
Earlier this month, I attended an almost comical presentation at the U.S. Chamber headquarters where speakers spent most of a four hour event attacking political spending disclosure resolutions as being bad for business.
I say ‘almost’ comical because, while much of the information is laughably wrong, the subject matter is far too important to joke about.
There are a number of things wrong with what I heard at this event, but I’d like to focus on two disturbing claims in particular.
First, I heard several participants—including former SEC commissioner Paul Atkins—make the claim that requiring companies to disclose political spending is incompatible with free speech.
That’s just flatly wrong.
Even if you agree that corporations have free speech rights similar to those of real people—which Chamber Watch absolutely does not—the courts have acknowledged that transparent disclosure of corporate political spending strengthens the democratic process and protects shareholders.
When the Supreme Court ruled in the Citizens United case, Justice Anthony Kennedy said in writing the majority opinion:
With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.
Companies should be required to disclose their political spending as part of their responsibility to provide relevant information to investors.
And that brings us to the second erroneous claim made at the U.S. Chamber event.
Participants repeatedly said that a company is violating its fiduciary duty to shareholders by disclosing its political spending.
How a company spends its political dollars can have an impact on the company’s value—so it is imperative that stockholders be well-informed about what corporate treasury money is being spent on. This information is relevant to the bottom line and clearly material to investors.
The need for this information is why shareholders have continued to demand that their companies implement strong political spending disclosure rules via shareholder proposals and why shareholders and others have made a loud call to the SEC for a uniform rule for all public companies.
More than 500,000 citizens and retail investors have signed a formal petition to the Securities and Exchange Commission asking the agency to consider requiring political spending disclosure from all publicly traded companies. The SEC has said it will consider proposing such a rule soon.
However, until a rule is proposed and implemented, we applaud the huge number of institutional shareholders that continue to introduce resolutions asking for political spending disclosure. If adopted, these shareholder resolutions would help protect our economy and our democracy.
Attacks like those at the U.S. Chamber event just show that the push is working.