January 18, 2012
Rep. Mike Capuano has written to the Securities and Exchange Commission (SEC) urging that the agency establish rules requiring a shareholder vote before corporate general treasury funds are used for political campaigns.
“The money belongs to the shareholders and they should have the opportunity to vote on how that money is spent, particularly when it is being used for purposes not undertaken by any U.S. corporation in decades,” stated Congressman Capuano.
The Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission (FEC) changed the campaign landscape by classifying corporations as persons, allowing them to spend freely on political campaigns. While the FEC has jurisdiction over matters regarding elections, the SEC could establish rules for corporations regarding spending from their general treasury funds. Congressman Capuano joined 42 colleagues in October of 2011 urging the SEC to draft rules requiring that corporations disclose their political spending. Today, he is asking the SEC to take it one step further by also requiring a shareholder vote before corporate treasury funds are spent on political campaigns.
“Over the years, and particularly since the Citizens United decision, shareholders have shown marked interest in participating in political spending decisions and have submitted numerous proposals to include robust political spending disclosures in proxy statements,” Congressman Capuano wrote in his letter to SEC Chair Mary Schapiro.
In July 2011, Congressman Capuano reintroduced H.R. 2517, the Shareholder Protection Act. This bill would require in statute what he is asking the SEC to implement through rules: a shareholder vote to authorize corporate political spending. H.R. 2517 would require an annual shareholder vote to approve a political spending budget. The corporation would then disclose to shareholders and the SEC the amounts spent and for what purposes. SEC action represents another way to accomplish this goal.
Congressman Capuano also called on the SEC to hold roundtable discussions within the next 90 days to consult with experts and explore the path forward. “The Citizens United decision has already heavily impacted the 2012 election cycle through the preponderance of so-called super-PACs, many of which do not disclose funding. It is likely that corporate political spending is playing a role, but the American public, and particularly the shareholders of such corporations, currently have no way to know”, Congressman Capuano wrote. The letter is attached.
Contact: Alison M. Mills (Rep. Capuano) 617-621-6208