Why is Washington Still Protecting the Secret Political Power of Corporations?

Search form

Why is Washington Still Protecting the Secret Political Power of Corporations?

Why is Washington Still Protecting the Secret Political Power of Corporations?
Wed, 7/2/2014 - by Alexis Goldstein
This article originally appeared on The Guardian

In post-Citizens United America, there is growing concern that the ability for corporations to anonymously funnel money into politics – with no need to disclose these donations to voters, election officials or their own shareholders – will corrupt the political process. Democrats have previously tried and failed to pass the Disclose Act, which would require greater disclosure of donors – but with a divided Congress, many in Washington see bringing meaningful transparency to campaign finance an utterly impossible task.

Still, there is another way to achieve the disclosure of corporate political donations that doesn't require Congress at all: the administration could simply propose new regulations under its existing authority. Unfortunately, despite having a Democratic chair – Mary Jo White – the Securities and Exchange Commission, which could mandate such disclosures, is either too intimidated (or too captured) to act.

Despite congressional shenanigans, blame for regulatory inaction on the issue sits squarely on the shoulders of the Democrat-led SEC. After adding a political disclosure rule to its 2013 agenda, the agency quietly dropped the rule for this year. SEC spokesman John Nester implied it was a capacity issue, noting that the agenda is its "best estimate as to what would be ready for Commission consideration by fall of 2014."

But we're already halfway through the year and the agency has made time for other "discretionary" activities: a pilot program to allow some stocks to trade in 5-cent increments rather than pennies, and a roundtable considering new regulations for the companies that advise institutional investors (a priority of the pro-business Chamber of Commerce).

House Republicans, of course, have stepped in, which gives the agency a convenient excuse for their inaction.

Last May, Republicans on the House Financial Services Committee warned White not to pursue the political disclosure rule. During the hearing, Rep Scott Garrett (R-NJ) went so far as to ask her to formally commit to removing the political disclosure rule from their regulatory agenda.

It would appear White – despite claims she is "apolitical" – heard him loud and clear. No proposed rule materialized, and seven months after Rep Scott Garrett requested it, the rule was removed from the agency’s 2014 agenda.

Not content to leave the SEC any opening to consider political disclosure rules in the future, House Republicans are now tinkering with the agency's budget in order to bury the issue forever.

Last week, the Republican-led House Appropriations Committee passed the bill to fund the SEC for $1.4 billion (a figure less than the marketing budgets for many Wall Street firms, and $300 million less than the budget requested by President Obama). Buried in the bill is a section that explicitly prohibits the SEC from using any funds from Congress to create political disclosure rules.

This Republican attempt to explicitly block the SEC from pursuing a political disclosure rule may seem overblown – they are essentially legislating that the dead horse must not rise again.

Democrats, to their credit, have tried to pressure the agency to keep pushing for a political disclosure rule. In April, when White appeared before the House Financial Services Committee, Rep Mike Capuano (D-MA) remarked that "the SEC has now taken a walk" on the issue. Before that, in January, 62 members of the House and 17 Senate Democrats signed letters to her urging action on a political disclosure rule – less than the 83 House and 50 Senate co-sponsors of the DISCLOSE Act.

It hasn't worked.

So how is it that Republicans' statements are so much more effective in influencing Mary Jo White's SEC? Some of her critics theorize that it's because she agrees with them. Prior to her role as Chair, she spent 10 years representing corporate clients like Bank of America and Morgan Stanley at the law firm Debevoise & Plimpton.

And last October, White gave a speech before Fordham Law school that included a critique of the usefulness of company disclosures to investors, even criticizing Congress for requiring companies – like those that manufacture electronics – to disclose if they use conflict minerals (a rule long opposed by Republicans and the future of which is uncertain due to recent court rulings).

The SEC's recalcitrance not only runs afoul of Democratic politicians – it's counter to a growing public interest in understanding companies' political spending. In 2011, a group of 10 academics petitioned the agency to develop rules requiring public companies to disclose political spending, arguing that such disclosure was important for shareholders. Many shareholders are already petitioning companies directly for these very disclosures: proxy advisory firm Glass Lewis found that the most common shareholder proposals of 2013 were those related to the political spending of a company. And nearly 1m people asked the SEC to pursue corporate political disclosure rules.

White’s decision to keep political disclosure rule off the 2014 agenda isn't a matter of a too-full regulatory plate, Republican appropriations tricks or a lack of popular support. It is a problem of political will.

Article Tabs

FarmDrop and Open Food Network stress the desire to create positive, systemic social change that disrupts the existing dominance of supermarket provision of food.

Republicans are arguing that Wall Street should have the constitutional right to influence politicians and the investment decisions those politicians make on behalf of pension funds and pensioners.

As the outrage in Ferguson takes on new forms and becomes less openly confrontational, the shooting of Michael Brown has started a nationwide dialogue about race, class and American law enforcement.

The vote on Independence is a moment of unprecedented possibility for Scotland to peacefully reject the U.K.'s failed neoliberal agenda.

Grassroots organizations that once made American democracy strong plummeted in the Reagan era – when political parties stopped representing the views of constituents and turned instead to money.

Charlie Hardy, the 75-year-old former Catholic priest now running for Senate, wants to halt NSA spying on ordinary citizens and overturn Citizens United with a Constitutional amendment.

Posted 5 days 20 hours ago

A group of watchdogs at Maplight has introduced an interactive tool to track not only the level and location of political donations, but how the money impacts specific pieces of legislation.

Posted 6 days 16 hours ago

If we want a healthy society that follows its laws and applies them equally to everyone, we must demand a full investigation and criminal prosecutions for everyone involved in the mortgage backed securities fiasco.

Posted 3 days 11 hours ago

The vote on Independence is a moment of unprecedented possibility for Scotland to peacefully reject the U.K.'s failed neoliberal agenda.

Posted 2 days 16 hours ago

From clashes during the Occupy movement to violence this month in Ferguson, Mo., researchers say protests get ugly when officers use aggressive tactics, dress in riot gear and line up like military.

Posted 5 days 20 hours ago
Workers Are Boldly - and Successfully - Fighting for Their Human Rights

From strikes at California ports to fast food chains in New York City, the past month saw labor rise up in defense of people's basic rights.

Despite propaganda that rich countries like Canada take the dangers of climate change seriously, it is absolutely clear they do not.

Highway to Wall Street

Set to ACDC's "Highway to Hell," this video weaves together protest footage from May Day and the occupation of Wall Street.

Techtivist Report: Hiding in the Blogosphere

Ever wonder why they can’t bring down WikiLeaks? It’s because Julian Assange uses Tor. If you're writing your own blog that is controversial with authorities, here are some tips to stay hidden and avoid being tracked, monitored -- or worse.

Autarchy requires an entrepreneurial spirit as well as an accurate understanding of the measure of our true needs versus wants so that we can live free from money worries.

Sign Up