U.S. Senate: Broad Coalition Calls for Senate Hearings on Corporate Governance Solutions in Wake of Citizens United
Today, the Campaign Legal Center, as part of a broad coalition of organizations, called on the Senate Banking Committee to hold hearings on the need to increase corporate disclosure and accountability to shareholders with relation to corporate political spending in the aftermath of the Supreme Court’s Citizens Uniteddecision.
The letter cites the fourfold spike in political spending in federal election by outside groups, funded largely by corporate interests, between the 2006 and 2010 midterm elections. The early signs of corporate attempts to sway the 2012 presidential cycle are even more ominous.
“Two years after the Citizens United decision, shareholders remain in the dark while a flood of corporate political spending plays an increasingly disproportionate role in picking winners and losers in our elections,” said Meredith McGehee, Campaign Legal Center Policy Director. “The staggering amounts of money spent by outside groups in the midterms elections – which saw more than $22 million spent in the Colorado Senate race alone – shook public confidence in our democratic process. All early indicators for 2012 point toward an even more extensive erosion of public confidence in the system and by extension public trust in Congress which has already fallen to its lowest point ever.”
The letter urges the committee to hold hearings this year to send a clear signal that it is willing to hold management accountable to stockholders and ensure that “political spending decisions are made transparently and in pursuit of sound business goals” for the for the good of the market and of our democracy.
The full text of the letter follows below. February 14, 2012 The Hon. Tim Johnson (D-S.D.)The Hon. Richard Shelby (R-Ala.)The Hon. Jack Reed (D-R.I.)The Hon. Michael Crapo (R-I.D.)Banking, Housing and Urban Affairs Committee, andSecurities, Insurance, and Investment Subcommittee U.S. Senate, SD-534Washington, D.C. 20510
RE: Hearing Request: Corporate Governance Solutions to Citizens United
Dear Chairman Johnson and Ranking Member Shelby,
We are writing to request that the Senate Banking Committee hold a hearing this year on the need to increase disclosure and accountability to shareholders around corporate political spending to mitigate the damage done to our nation by the Supreme Court’s decision in Citizens United v. Federal Election Commission.
Americans have become increasingly unhappy with the impacts of the unrestricted corporate and special interest money influencing our political system. In fact, 92 percent of the American people believe that the extent of corporate influence on our political system is a problem. Only one month after the Citizens United decision, polling revealed that about eighty percent of Americans of all partisan persuasions disagreed with the ruling.
The Supreme Court’s decision to give corporations the right under the First Amendment to spend unlimited funds from their corporate treasuries to support or attack candidates is troubling for several reasons.
In the electoral arena, this decision has brought a flood of new money into elections, ratcheting up the cost of campaigns and increasing the time and resources needed for fundraising. Spending by outside groups funded largely by corporate interests and intended to influence the 2010 elections, was more than four times as high than in 2006, the last mid-term cycle. The ads funded by unaccountable corporate interests fueled massive partisan attacks that helped to shape the election cycle. The spending that we are already seeing in the 2012 cycle through SuperPAC and other conduits is even more shocking.
In the legislative arena, the mere threat of corporate political spending gives corporate lobbyists a large new club to wield when negotiating with lawmakers, and makes it harder for legislators to vote their conscience.
In corporate governance, there are no rules or procedures established in the United States to ensure that shareholders – those who actually own the wealth of corporations – are informed of, or have the right to approve, decisions on spending their money on politics.
Corporate disclosure and the raised voices of shareholders can help provide a framework to rein in some of the damage to our democracy in this troubling new political landscape.
Senator Menendez and 12 colleagues, four of whom are also on the Senate Banking Committee, have introduced legislation that would give shareholders a voice in the process of how their company’s money is spent—The Shareholder Protection Act S.1360.
In addition a petition has been filed at the SEC calling on that agency to create rules dealing with political spending by publicly traded corporations. Over 25,000 comments have been filed in support of the petition. The SEC should move forward creating these rules quickly, as responsible corporate governance requires the involvement of informed shareholders.
We urge the Senate Banking Committee to use this next session of the 112thCongress to advance the discussion around shareholder empowerment in the wake of a seemingly endless flood of corporate money in our elections.
Holding management accountable and ensuring that political spending decisions are made transparently and in pursuit of sound business goals is important for both the market and for democracy.
Campaign Legal CenterCenter for Corporate PolicyChesapeake Climate Action NetworkCitizen WorksCitizens for Responsibility and Ethics in WashingtonCoalition for Accountability in Political Spending (CAPS) CAPS Members Include: Public Advocate Bill de Blasio, New York City Governor Pat Quinn, State of Illinois State Treasurer Janet Cowell, North Carolina State Comptroller Tom DiNapoli, New York State Treasurer Bill Lockyer, California State Treasurer Rob McCord, Pennsylvania City Controller Wendy Greuel, Los Angeles Representative William A. Current, Sr., North Carolina House of Representatives Representative James Pilliod, NH House of Representatives County Commissioner Toni Pappas, Hillsborough County, NHCoffee Party USACtW Investment GroupDemocracy 21Democracy for AmericaDemosGreenpeaceInternational Brotherhood of TeamstersLeague of Conservation VotersMain Street AllianceMassachusetts LaborersNational Consumers LeagueNell Minnow, board member GMI ratingsNew Progressive AllianceNorthStar Asset Management, Inc.($160 million AUM)People For the American WayPublic CampaignPublic CitizenSean H. Webb-Trustee-Marin County employees' Retirement AssociationSocial Equity GroupState Treasurer Denise Nappier, ConnecticutSunlight FoundationThe Laborers’ International Union of North America (LiUNA)U.S. Public Interest Research GroupWest Virginia Citizen Action