Former SEC members call out agency for inaction on corporate contributions

Secret corporate political spending is a scourge on U.S. democracy. And despite inaction by the Securities and Exchange Commission (SEC) on the matter, a bipartisan collection of former SEC members are speaking out saying something has to be done now.

The Teamsters joined with others to call out the SEC last fall.

In a letter sent today to SEC Chairman Mary Jo White, former SEC Chairmen William Donaldson (R) and Arthur Levitt (D), as well as former SEC Commissioner Bevis Longstreth (D) said it is time for the agency to put in place mandatory political spending disclosure laws so that investors know about corporations' giving practices.

They noted when the U.S. Supreme Court issued its ruling in the 2010 Citizens United case, the court expected the SEC to issue rules that would give investors transparency on the company donations. And a petition signed by a record-breaking 1.2 million people also called for intervention. The three wrote:

To date, the Court’s expectation of disclosure, which can only be assured by SEC rule, has been denied. It is now five years since Citizens United and almost four years since Petition 4-637 was filed. The Commission’s inaction is inexplicable. Its failure to act offends not only us, who are alumni of this agency struggling to retain our deep pride of association, but investors and the professionals who serve them. And it flies in the face of the primary mission of the Commission, which has since 1934 been the protection of investors. To use a metaphor, mandatory disclosure of corporate political activities should be a “slam dunk” for the Commission.

The Teamsters have been outspoken critics of this inaction as well. Teamsters General President Jim Hoffa wrote in a Reuters column a year ago:

Companies increasingly are playing an outsized role in U.S. elections. In many cases, they donate money to advocate controversial policies that could antagonize their customers and undermine their businesses. Because so many of these contributions are not disclosed, however, shareholders are left in the dark and unable to evaluate potential conflicts or risks.

That's not how it should be. Unions need to disclose their contributions. And millions of people making retirement investments have a right to know about how the companies they’ve purchased shares in are spending their cash. Many times, political contributions end up biting corporations in the backside and cost their investors dearly. Teamsters, through affiliated pension and benefit funds, have more than $100 billion invested in capital markets. The union relies upon the SEC to ensure that as investors the Teamsters are provided accurate and transparent financial reports by the companies with whom we invest.

Government needs to be responsive to its citizenry. Corporations shouldn’t get a pass on following the same rules as organizations that represent workers.