Say you owned a business, and found out one of your employees was taking money out of the cash register and spending it on questionable ventures without telling you. You’d fire him, right? It’s a pretty clear-cut case of right and wrong. Now imagine that you aren’t allowed to know whether that employee is taking money out of your profits, or where the money is going. Sound unfair – and like a bad way to run a business? Sadly, that’s the case for shareholders – owners of the largest corporations in America – who’d like to know how their profits are being spent on political causes. Now Sens. Robert Menendez (D-N.J.) and Elizabeth Warren (D-Mass.) are holding a briefing to explain why shareholders’ need this information in their hands.
Since the 2010 Citizens United Supreme Court decision, corporations have been allowed to contribute as much so-called “dark money” as they would like to independent entities like 501(c)(4) “social welfare” nonprofits, and 501(c)(6) “trade associations” like the Chamber of Commerce. The corporations don’t have to tell their own shareholders or the American public how much dark money they’re paying or where it’s going, and the nonprofits don’t have to disclose their donors. The winners are corporate executives with a political agenda and politicians. Shareholders and the American public are the losers.
Now, the Securities and Exchange Commission has a chance to adopt a rule to require disclosure of public companies’ political spending. The SEC put such a rule on their agenda at the beginning of 2013. Nine months later, we believe it is the time to see some real movement since pro-disclosure retail investors around the country have set the all-time comment record at the SEC, with more than 640,000 supportive comments on the rulemaking petition.