The Million-Comment-Letter Petition: The Rulemaking Petition on Disclosure of Political Spending Attracts More than 1,000,000 SEC Comment Letters

Lucian Bebchuk is Professor of Law, Economics, and Finance at Harvard Law School. Robert J. Jackson, Jr. is Professor of Law at Columbia Law School. Bebchuk and Jackson served as co-chairs of the Committee on Disclosure of Corporate Political Spending, which filed a rulemaking petition requesting that the SEC require all public companies to disclose their political spending, discussed on the Forum here. Bebchuk and Jackson are also co-authors of Shining Light on Corporate Political Spending, published last year in the Georgetown Law Journal. A series of posts in which Bebchuk and Jackson respond to objections to an SEC rule requiring disclosure of corporate political spending is available here. All posts related to the SEC rulemaking petition on disclosure of political spending are available here.

In July 2011, we co-chaired a committee of ten corporate and securities law experts that petitioned the Securities and Exchange Commission to develop rules requiring public companies to disclose their political spending. We are delighted to announce that, as reflected in the SEC’s webpage for comments filed on our petition, the SEC has now received more than a million comment letters regarding the petition. To our knowledge, the petition has attracted far more comments than any other SEC rulemaking petition—or, indeed, than any other issue on which the Commission has accepted public comment—in the history of the SEC.

The overwhelming majority of comment letters filed with the SEC are supportive of the petition. We should note that, of the filed comments, the lion’s share came from individuals who expressed their views through one of twenty-three common types of letters filed with the Commission. While these comments use standard form letters, each was separately submitted by individuals who presumably were interested enough in this subject to write to the SEC. Furthermore, the petition has separately attracted over 5,000 distinct comment letters—including letters from institutional investors and Members of Congress—and the overwhelming majority of these letters are also supportive of the petition.

Opponents of our petition, such as the Chamber of Commerce and the American Petroleum Institute, have also filed detailed comment letters, and these comment letters enable assessments of possible objections. In our article Shining Light on Corporate Political Spending, as well as in a collection of posts here on the Forum, we have considered each of the objections raised by opponents, and we have shown that none of these objections—either individually or collectively—provides any basis for opposing rules that would require public companies to disclose their spending on politics.

At the end of 2012, the then-Director of the SEC’s Division of Corporation Finance said that the Division was “looking at the [petition] and we have 300,000 comments on it. So in light of this interest, we’re taking a look at whether to make a recommendation to the Commission;” and the Commission placed the rulemaking petition on its regulatory agenda for 2013. However, at the end of 2013, the SEC issued an updated regulatory agenda, which no longer includes rules requiring public companies to disclose their spending on politics.

We understand that the SEC has been facing considerable political pressure from members of Congress not to consider a rule mandating disclosure of corporate political spending. Nevertheless, the massive support in the comment file for such a rule and the strength of the arguments in favor of the proposal that have been advanced both inside and outside the comment file make the case for the SEC’s consideration of a rule in this area clear and strong.

The unprecedented crossing of the million-comment-letter mark highlights the significance of this issue and the breadth of support for an SEC rulemaking process. We are hopeful that, before too long, the SEC will initiate such a process, and we urge the SEC to do so.

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