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E-MailLucian 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. Bebchuk and Jackson are also co-authors of Shining Light on Corporate Political Spending, published 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.
We are pleased to report that this week a group of forty-four U.S. Senators sent a letter to SEC Chair Mary Jo White expressing support for the rulemaking petition on corporate political spending submitted by the committee of corporate and securities law experts that we co-chaired. We are delighted that forty-four Senators have added their voices to the unprecedented support that the petition has already received.
In July 2011, we co-chaired a committee on the disclosure of corporate political spending and served as the principal draftsmen of the rulemaking petition that the committee submitted. The petition urged the SEC to develop rules requiring public companies to disclose their spending on politics. To date, the SEC has received more than 1.2 million comments on the proposal—more than any rulemaking petition in the Commission’s history.
The forty-four Senators’ letter begins by stating that they “write to express [their] support” for the rulemaking petition. They go on to state their belief that the disclosure rules advocated by the petition are “consistent with the SEC’s requirement for public companies to disclose meaningful financial information to the public.” They express appreciation to the SEC Chair’s “willingness to strongly consider the importance of this rulemaking.” They conclude by asking that the SEC Chair make the petition “a top priority for the SEC in the near term, and inform [the Senators] of the basis for [the SEC Chair’s] decision should [the SEC Chair] not plan to include it on the Commission’s agenda for the upcoming year.”
The Senators’ letters refers to a prior letter in support of the rulemaking petition that was sent to the SEC by a bipartisan group of former SEC officials. In this letter, former SEC Chairmen Arthur Levitt and William Donaldson and former Commissioner Bevis Longstreth stated that the rulemaking proposed in the petition is a “slam dunk” and that the SEC’s failure to act “flies in the face of the primary mission of the Commission, which since 1934 has been the protection of investors.”
As we have discussed in previous posts on the Forum, the case for rules requiring disclosure of corporate political spending is compelling. Unfortunately, the Commission has so far chosen to delay consideration of rules in this area. The delay is unfortunate and unwarranted in light of the strong arguments for disclosure put forward in the rulemaking petition and the remarkable and broad support that the petition has received. Moreover, as we showed in our article Shining Light on Corporate Political Spending, a close examination of the objections that opponents of such rules have raised indicates that these objections, both individually and in combination, fail to provide an adequate basis for opposing rules that would make disclose corporate political spending to investors.
The letter of the forty-four Senators highlights the remarkable level of support that the rulemaking petition has received. The SEC should proceed with rulemaking in this area without further delay.
The forty-four U.S. Senators who signed the letter supporting the rulemaking petition are:
| Jeffrey A. Merkley | Robert Menendez |
| Charles E. Schumer | Sheldon Whitehouse |
| Tom Udall | Ron Wyden |
| Patrick Leahy | Mazie K. Hirono |
| Kirsten E. Gillibrand | Jack Reed |
| Bernie Sanders | Patty Murray |
| Tammy Baldwin | Richard J. Durbin |
| Al Franken | Debbie Stabenow |
| Richard Blumenthal | Elizabeth Warren |
| Maria Cantwell | Sherrod Brown |
| Martin Heinrich | Dianne Feinstein |
| Edward J. Markey | Jeanne Shaheen |
| Christopher A. Coons | Angus S. King Jr. |
| Amy Klobuchar | Gary C. Peters |
| Michael F. Bennet | Brian Schatz |
| Robert P. Casey Jr. | Cory A. Booker |
| Christopher S. Murphy | Bill Nelson |
| Benjamin L. Cardin | Tim Kaine |
| Barbara Boxer | Barbara A. Mikulski |
| Jon Tester | Thomas R. Carper |
| Mark R. Warner | Claire McCaskill |
| Harry Reid | Heidi Heitkamp |
2 Comments
Arguably, the Citizens United decision assumed shareholders already had access to the information on political spending by the companies they own.
However, we do not. As bad as Citizens United was as a decision, it doesn’t work as Chief Justice Kennedy wrote without this requested rulemaking. No more excuses. Get it done.
What Professors Bebchuk and Jackson fail to mention is that all 44 are Democrats. They thus continue to studiously ignore the highly partisan nature of their proposal. The Democrats and unions that support it do so not out of policy concern but because they think it will deter corporate campaign contributions to Republicans. Bebchuk and Jackson thus continue to studiously ignore the highly partisan nature of their proposal and, accordingly, continue to provide purportedly objective academic cover for left-liberal politicians.