As noted here and here, Interfaith Center on Corporate Responsibility Executive Director Laura Berry was one representative of several groups asking the Securities and Exchange Commission to adopt new corporate political disclosure rules in October. Ms. Berry was joined by Sen. Elizabeth Warren (D-Mass.) and numerous other liberal/progressive advocates who wanted to put up regulatory roadblocks to corporate political speech guaranteed by the U.S. Supreme Court’s Citizens United ruling.
The SEC, however, determined it would not proceed with stifling free speech despite what the Washington Post described as
A groundswell of support … with retail investors, union pension funds and elected officials at the state and federal levels writing to the agency in favor of such a requirement. The idea attracted more than 600,000 mostly favorable written comments from the public — a record response for the agency. And with Mary Jo White’s arrival as SEC chairman in April, the initiative’s supporters hoped for action.
‘But she obviously did not really recognize the significance of this,’ said Bruce Freed, president of the Center for Political Accountability, which has pioneered the push for political spending disclosures. ‘She is not looking at investor protection and corporate governance broadly. You do not see those as primary drivers of her agenda.’
Freed authors the corporate disclosure proxy resolutions introduced by ICCR and other religious advocates. Ms. White, according to the Wall Street Journal, properly understands the function of the SEC has nothing to do with political finance disclosure:
Readers will recall that former SEC Chairman Mary Schapiro, egged on by Democratic Commissioner Luis Aguilar and Members of Congress, overrode the objections of career staff in demanding a new disclosure rule. The liberal objective was to impose heavy reporting requirements on business—but not on labor unions—for providing financial support to groups engaged in public debate.
SEC staff rightly objected that it’s not their job to regulate political speech and that such regulation does nothing to protect investors, which is the agency’s core mission. Congratulations to current SEC Chairman Mary Jo White for refusing to go along with this partisan operation.
The Center for Competitive Politics, a Washington-based group, also commended Ms. White for avoiding SEC mission creep that would further a decidedly liberal agenda. In a press release issued Dec. 2, CEP quoted former Federal Election Chairman Bradley A. Smith:
We applaud the SEC for refusing to allow itself to be dragged into regulating political speech in pursuit of a partisan agenda…. The SEC can now return its focus to protecting investors and regulating capital markets, and leave campaign finance law to the FEC and the Congress.
And CCP Legal Director Dickerson:
The overwhelming majority of political activity—corporate or otherwise—is publicly disclosed under current regulations, and federal law already requires the disclosure of all material corporate activity…. This proposal would have involved the SEC in the difficult business of regulating political speech, a job for which it is poorly equipped, and which would have proved a distraction from its important work in the economic sphere.
A record number – more than 600,000 – of comments advocating new rules was submitted to the SEC, but CCP President David Keating commented that these were mainly astro-turfed:
The reform campaign was hollow, designed to cause a knee-jerk reaction by members of the public rather than solve an actual problem for investors…. Less than .01% of the submitted comments were substantial letters, as opposed to the hundreds of thousands of form letters that essentially spammed the SEC. Thankfully, Chairwoman Mary Jo White, the SEC and its staff realized that they are ill-suited to the policing of political speech, which would have dragged the agency down the same dangerous trail blazed by the IRS.
Note that the WSJ and CCP identify the legitimate role of the SEC as protecting investors rather than forcing companies to disclose donations to nonprofits and campaigns. This is something Ms. Berry, ICCR and Mr. Freed should keep in mind before mounting yet another attack on the First Amendment. Why am I not optimistic?
Robert Kennedy notes Christian social thought has paid less attention to business than the prevalence of the latter would merit. Professor Kennedy, with experience in the business world and expertise in theology and management, begins to redress this deficiency in this monograph.