SEC mulling campaign disclosure rule


WASHINGTON — A decision by the U.S. Securities and Exchange Commission to consider a new rule this year requiring companies to release information about their political spending has buoyed disclosure advocates, who say such a move could be a game-changer in their quest for more transparency.

If approved by the SEC, the regulation could require all publicly traded corporations to detail how much money they give for political activities, including to tax-exempt advocacy groups and trade associations such as the U.S. Chamber of Commerce. But the move faces stiff opposition from many in the business community.

The new rule would provide the fullest picture yet of how much corporations have become engaged in campaigns since the 2010 Supreme Court Citizens United ruling legalized unlimited corporate spending on independent political activity.

In the 2012 campaign, federal “super PACs” reported receiving $42.4 million from corporations, most of them privately held, according to a tally by the Sunlight Foundation. But tax-exempt groups, which do not have to report their contributors, spent hundreds of millions of dollars more on election-related activity.

It remains a mystery exactly how much money they raised — and from whom.

The push for more disclosure is being driven not only by liberal campaign finance reform advocates, but by shareholders and institutional investors who argue that good corporate governance requires accountability of how much money is spent on politics and whether it is in the interest of the corporation.

“As an institutional investor, you take a look at the decline in transparency surrounding this, and it gets really hairy for people putting money into publicly traded securities,” Pennsylvania State Treasurer Rob McCord said Tuesday in a conference call organized by the Corporate Reform Coalition.

The proposed SEC rule is being pushed by a bipartisan group of law professors who filed a petition in 2011 seeking the regulation. Since then, more than 322,000 comments have been filed in favor of the move — far and away the largest number of comments filed in response to a proposed SEC rule.

In late December, the SEC posted notice that it will consider the rule this year, and will issue a notice about the process by April.

Robert Jackson, law professor at Columbia University and one of the original petitioners, said the huge response reflects the desire by shareholders for the SEC to better protect their interests.

“Investors should be given the information they need to assess whether and how their money is spent on politics,” he said.

But the proposed rule is sharply opposed by the Chamber of Commerce and other business groups, which argue that the SEC does not have the authority to issue such a broad regulation and that information about political spending is not material to a company’s bottom line.