This week has showcased a dire need, a need to spotlight the unregulated money overwhelming our democracy. Reform groups, investors, state elected officials and more have demanded that Congress and federal agencies do their jobs and make elections transparent to the people voting in them.
First, on Monday morning organizations and investors gathered to urge the Securities and Exchange Commission (SEC) to require publicly-traded companies to disclose contributions when they engage in electoral politics. Today, the DISCLOSE Act will come up for a hearing in the United States Senate.
Both SEC rules and congressional action are critical to closing the gaping loopholes in our system left by the Citizen United v. Federal Election Commission (FEC) decision and ineffective FEC regulations on the disclosure of political spending.
Polls show the public overwhelmingly supports disclosure. According to a New York Times article on a New York Times/CBS News poll released on October 28, 2010, Americans significantly, "favor full disclosure of spending by both campaigns and outside groups."
When it comes to investors, it is the job of the SEC to pull them out of the dark and create a rule on political spending. In his opinion in Citizens United, Justice Anthony Kennedy incorrectly stated that shareholders would be in the know on political spending, but there’s actually no mechanism to give them the information. This is particularly troubling because companies can now give unlimited amounts to nonprofits and trade groups playing in elections that don’t have to disclose their funders. Groups on both the right and left like the U.S. Chamber of Commerce, Crossroads GPS, and Priorities USA can now receive unlimited gifts from companies without the knowledge of the corporation’s investors.
A company's political spending is relevant information to current and potential shareholders who are deciding where to invest their money.
One SEC commissioner, Luis Aguilar, has already said publicly that he would support a disclosure rule. Only two more votes are needed to promulgate a rule via the SEC, and they should quickly move the ball forward on this key disclosure measure.
Another important avenue for disclosure is the subject of this today’s hearing, the DISCLOSE Act. Parts of this bill would ensure that citizens know on a timely basis the identities of the large donors that fund tax-exempt organizations spending money on elections. The legislation would also fix the problem of untimely disclosure of the donors to Super PACs supporting presidential candidates, instead giving the public information in time to act on it.
The slow SuperPAC disclosure problem was highlighted sharply in the Republican primaries, when the disclosure of most of the Super PAC donors didn’t even happen until after the pivotal Iowa caucus and New Hampshire, South Carolina and Florida primaries were long over.
This bill is practical, problem-solving and popular.
Opposition to either the DISCLOSE Act or a new rulemaking on disclosure at the SEC in the face of overwhelming public support for such action can mean only mean one thing: the opponent thinks that large donors should be kept hidden from the American people and we should forget about spotlights on spending.