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 to report that a group of fifty-eight members of the House of Representatives last week 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 these fifty-eight members of the House of Representatives have added their voices to the unprecedented support that our 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.
Taking notice of the overwhelming support that the petition had received, the SEC placed consideration of the petition on its regulatory agenda in 2013. Unfortunately, Chair Mary Jo White encountered significant political pressure to remove the petition from the Commission’s agenda, and the Commission chose to delay consideration of rules in this area.
In their letter, the fifty-eight Representatives stated that they are writing to “express [their] support for” the rulemaking petition. They urged the SEC chair “to reconsider the frustrating decision to remove corporate political disclosure from the regulatory agenda and make corporate political disclosure a top priority for protecting investors.”
The Representatives’ letter that forty-four Senators sent Chair White in August. The Senators’ letter stated that the Chair should 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.” Earlier this year, a bipartisan group of former SEC officials (including former Chairmen Arthur Levitt and William Donaldson) sent a letter to SEC Chair White stating that 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. 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 mandate the disclosure of corporate political spending to investors. The SEC should proceed with rulemaking in this area without further delay.
The fifty-eight members of the House of Representatives who signed the letter (available here) supporting the rulemaking petition are:
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