Senators Urge SEC Nominees to Support Disclosure of Corporate Political Spending

Eight Democratic members of the Senate Banking Committee, led by Senators Jeff Merkley and Charles E. Schumer, have written a letter to the newly named nominees for the U.S. Securities and Exchange Commission (SEC) advocating for a rule that requires public companies to disclose their political spending to shareholders. The letter, signed by Senators Merkley, Schumer, Ranking Member Sherrod Brown, and five others, comes after a record one million public comments were received by the SEC supporting such a rule. The Senators argue that only 2% of public companies currently disclose their political spending, and that a disclosure policy is essential for holding companies accountable to shareholders and bringing transparency to corporate political spending.

Key Takeaways:

• The letter signed by Senators Merkley, Schumer, and others urges the SEC nominees to support a rule requiring public companies to disclose their political spending to shareholders.
• The Senators argue that only 2% of public companies currently disclose their political spending, and that a disclosure policy is essential for holding companies accountable to shareholders.
• A record one million public comments were received by the SEC supporting a rule requiring corporate political spending disclosure.
• The letter highlights the views of former SEC Chairmen William Donaldson and Arthur Levitt, and former Commissioner Bevis Longstreth, who wrote in a May 2015 letter to SEC Chair Mary Jo White that the SEC's failure to act on corporate political spending disclosure was a breach of its primary mission.
• The Senators also cite the words of former Supreme Court Justice Louis Brandeis, who said "sunlight is the best of disinfectants," in support of disclosure policy.
• William Donaldson, a former GOP Chair, joined Schumer, Merkley, and Menendez on a call last week to urge the new nominees to prioritize a political spending disclosure rule.
• The Senators believe that a disclosure policy is consistent with the SEC's requirement for public companies to disclose material information to its investors.

Statistics:

• 2% of public companies in the United States make voluntary disclosures of their political spending.
• 1 million public comments were received by the SEC in favor of a rule requiring corporate political spending disclosure.
• 8 Democratic members of the Senate Banking Committee signed the letter urging the SEC nominees to support a disclosure rule.
• The letter was signed by Senators Jeff Merkley, Charles E. Schumer, Sherrod Brown, Bob Menendez, Jack Reed, Jon Tester, Mark Warner, and Elizabeth Warren.

Sources:

• [1] Calculation made using number of public companies that disclose corporate political spending divided by total number of public companies.
• [1] Dan Strumpf, "U.S. Public Companies Rise Again," The Wall Street Journal, Markets, February 5, 2014, http://www.wsj.com/articles/SB10001424052702304851104579363272107177430
• [1] Tim Devaney, "Investors Urge Corporate Political Spending Disclosure," The Hill, May 20, 2015, http://thehill.com/regulation/business/242655-investors-push-sec-to-disclose-dark-money-in-politics.
• [2] Former SEC Chairmen William Donaldson and Arthur Levitt and former SEC Commissioner Bevis Longstreth letter to the SEC, May 27, 2015, https://www.sec.gov/comments/4-637/4637-3105.pdf