* Aguilar wants companies to disclose political spending
* Says concerned about undisclosed contributions
* SEC has been petitioned to require such disclosures
By Sarah N. Lynch
WASHINGTON, Feb 24 U.S. securities
regulators should develop a regime to require companies to
disclose all of their political spending, a Securities and
Exchange Commission official said on Friday.
"Requiring transparency for corporate political expenditures
cannot wait a decade," said Luis Aguilar, a Democratic
commissioner, in a speech at the Practising Law Institute's
annual SEC Speaks conference.
"It is the commission's responsibility to rectify this gap
and ensure that investors are not left in the dark while their
money is used without their knowledge or consent."
The call for more disclosure comes after the Supreme Court's
"Citizens United" ruling in 2010 that found independent
expenditures by corporations do not give rise to the appearance
of corruption and are constitutional.
That decision paved the way for a dramatic increase in
political action committees known as Super PACs that have played
an influential role in the Republican nomination race ahead of
the 2012 presidential election.
Unlike campaigns, these PACs have no limits on what they can
raise or spend, allowing them to have a much greater impact
thanks to donations by wealthy individuals or companies. These
Super PACs have largely taken on the job of running attack ads
in the Republican campaign.
So far, mostly wealthy individuals, as opposed to companies,
have been visibly involved in funding the Super PACs.
The SEC does not currently require public companies to give
detailed information on corporate spending on politics, unless
the spending is considered "material."
The SEC has received petitions over the past year, including
one from a group of prominent securities law experts, asking the
agency to force companies to make such disclosures.
SEC Chairman Mary Schapiro told reporters on the sidelines
of the conference on Friday that the SEC will address the
rule-making petitions it has received "at some point", but said
that shareholders already have a means of requiring more
disclosure from the companies they own.
"Companies that receive a shareholder proposal asking them
for disclosure about political contributions have been required
to put those shareholder proposals in the proxy, so there is a
mechanism for shareholders to directly represent to the
companies they own to have that issue put forward for a
shareholder vote," she said.
In 2011, out of 465 shareholder proposals appearing on
company proxy statements, 50 were related to political spending,
"The demand from investors has been so significant that
large public companies have increasingly agreed to adopt
policies requiring disclosure of companies' political
expenditures," said Aguilar. "However, it is important to keep
in mind that while some companies are voluntarily providing
disclosures, many others are not. In addition, the disclosure
that is provided is not uniform and may not be adequate."
Even with the groundswell of interest in the topic, the SEC
has not focused on developing new rules, partly because of the
rulemaking workload its was given in the 2010 Dodd-Frank
financial oversight law.
But Aguilar warned that shareholders will suffer the longer
the SEC waits.
"The cost of commission inaction - particularly in the face
of compelling evidence for the commission to act - can be
devastating," he said.
(Reporting By Sarah N. Lynch; Additional reporting by Alina
Selyukh and Patrick Temple-West; Editing by Tim Dobbyn)