Statement of the Corporate Reform Coalition and Other Undersigned Organizations in Response to the Securities and Exchange Commission’s Shift on Political Spending Disclosure
The Corporate Reform Coalition is deeply disappointed by and demands an explanation for the removal from its agenda of the most widely supported rulemaking in the Securities and Exchange Commission’s history. The agency chose to put the political spending disclosure rule on their docket for consideration based on its strong support from investors and the potential risks to companies from secret political spending. The decision to drop this rule and others from the 2014 Commission agenda is a step back from the SEC’s proactive agenda to protect investors.
There is an urgent need for a new disclosure rule to address political spending since the U.S. Supreme Court’s Citizens United decision allowed companies to directly spend their money in politics. Citizens United also affirmed the constitutionality of disclosure requirements and, in fact, assumed that new corporate political spending would be transparent to shareholders. Justice Kennedy said in the opinion that “shareholder objections raised through the procedures of corporate democracy” would provide accountability for the new political spending. Without a mandatory disclosure rule shareholders do not have the ability to raise those objections.Read more
The New School Advisory Committee on Investor Responsibility Calls for Mandatory Disclosure of Corporate Political Spending
Following the Supreme Court ruling on Citizens United, political campaigns have been flooded by soft money of ambiguous origin. Terra Lawson-Remer, faculty member and chair of the ACIR states that, "it has become increasingly clear that non-transparent and unaccountable corporate financing of political campaigns is corroding our democracy.” The New School ACIR is urging the SEC to mandate the disclosure of material corporate political spending, in order to facilitate market transparency, assist shareholders in monitoring the spending practices of the corporations they own, provide the information necessary for universities to invest prudently and in line with their missions, and illuminate the activities of corporations in the elections that govern this nation.
The ACIR of The New School has prioritized this issue as it believes that American universities, who collectively hold over $400 billion in their endowments, have a special responsibility to ensure that their investments align with the ethos of the overall institution. Izza Aftab, student representative on the ACIR and a graduate student in economics, noted that, “Universities play the dual role of investors and educators in a dynamic environment. Therefore, it is absolutely essential that universities call for transparency in corporate political spending in order to set standards for the students of today, who are the leaders of tomorrow.” Non-transparency, and the corresponding failures of weak accountability and poor governance, undermines the values and practices of educational institutions. These concerns are of particular concern at The New School, given its long history of progressive social action and critical thought.
You can read the letter on the SEC website here.