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. 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 that Presidential candidate Hillary Clinton just announced her support for SEC rulemaking that would require public companies to disclose their political spending to their shareholders.
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—far more comments than those submitted on any rulemaking petition in the Commission’s history.
A statement just released by the Clinton campaign expressed Clinton’s support for “SEC rulemaking requiring publicly traded companies to disclose all political spending to their shareholders.” It further indicated that “Clinton believes that information about how corporate funds are being used to fuel political activity and influence elected officials is material to investment decisions and should be made available to shareholders.”
In addition to Clinton’s announcement, there have been recently other notable expressions of support for the rulemaking petition. Last week, forty-four U.S. Senators sent a letter to the SEC chair to “express [their] support” for the rulemaking petition” and requested that the SEC Chair make the petition “a top priority for the SEC in the near term” (discussed on the Forum here). Earlier, in a letter in support of the rulemaking petition, 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” (discussed on the Forum here).
As we have discussed in previous posts on the Forum, the case for rules requiring disclosure of corporate political spending is compelling. Moreover, as our article Shining Light on Corporate Political Spending shows, a close examination of the full range of objections that opponents of such rules have raised indicates that these objections, both individually and collectively, fail to provide an adequate basis for opposing rules that would make disclose corporate political spending to investors. The SEC should proceed to rulemaking in this area.
