Jan 8 Backers of a rule to require companies to
disclose political spending said on Tuesday they were heartened
by a recent notice that the U.S. Securities and Exchange
Commission may take up the controversial idea soon.
A federal notice from late December states an SEC division
"is considering whether to recommend that the Commission issue a
proposed rule to require that public companies provide
disclosure to shareholders regarding the use of corporate
resources for political activities."
The text suggested some action by April. Proponents of
disclosure held a call with reporters on Tuesday to applaud the
item since even its appearance would have required a sign-off by
"The fact they put this on the agenda is a very good sign
they intend to move forward with it," Adam Kanzer, general
counsel of Domini Social Investments LLC, said on the call.
It is not clear just how hot the topic is at the SEC, whose
four commissioners either declined to comment or did not
immediately return messages on Tuesday. SEC spokesman John
Nester said its staff "is considering whether to make a
recommendation" but said no date for a decision has been set.
Spending on elections by publicly traded companies has drawn
much criticism after a 2010 Supreme Court ruling eased
In 2011, a group of law professors backing more corporate
spending disclosure petitioned the SEC. They asked the agency to
design rules that would require the disclosure of contributions
at relatively low levels, perhaps with annual proxy disclosures,
and to sort out just what sort of contributions would have to be
disclosed such as money given to trade associations.
Democratic-leaning groups and some public pension fund
managers have argued companies owe their shareholders more
details about their outlays for candidates and lobbying.
On Jan. 3, New York State's $150 billion public pension fund
sued chipmaker Qualcomm Inc for details of its
The debate is intertwined with a political contest over
funding sources. Along with two of the law professors, elected
officials who spoke on the teleconference call on Tuesday
included two Democrats, Pennsylvania Treasurer Rob McCord and
congressman John Sarbanes of Maryland.
Businesses worry new rules could interfere with how
companies interact with public officials, according to a Jan. 4
letter sent to the SEC by trade associations including the U.S.
Chamber of Commerce.
Opponents also worry the disclosures could violate Free
Speech rights and say the idea is far outside the agency's
authority. "Wading into these waters is not the SEC's
appropriate mandate," said James Copland, director of a legal
policy center at the market-oriented Manhattan Institute in New
York, via email.
Still, Copland said he was not surprised the SEC is
reviewing the topic and cited pressure from the academics and
investors aligned with labor groups.
SEC Commissioner Luis Aguilar, a Democrat, backed the idea
of requiring more corporate disclosure in a speech last
February. At the same event, then-SEC Chairman Mary Schapiro
said the SEC would take up the matter but said that shareholders
already could require more disclosure through proxy resolutions.
A representative for Aguilar said he declined to comment on
Tuesday. The three other commissioners did not respond to
questions. SEC spokesman Nester said the review's timing could
be influenced by other rulemakings.