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Tuesday, 01 July 2014 07:07

Gutless: SEC Can Require Corporations to Disclose Big Political Contributions, But Won't

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corporatecontr(Photo: Fibonacci Blue)Could Securities and Exchange Commission (SEC) Chairwoman Mary Jo White require the disclosure of big political contributions by corporations, particularly in the wake of the Citizens United decision?

Apparently the answer is "yes," according to a June 30 "Comment Is Free" column in The Guardian, by journalist Alexis Goldstein:

The disclosure of corporate political donations doesn't require Congress: the administration could simply propose new regulations under its existing authority. Unfortunately, despite having a Democratic chair – Mary Jo White – the Securities and Exchange Commission, which could mandate such disclosures, is either too intimidated (or too captured) to act.

Despite congressional shenanigans, blame for regulatory inaction on the issue sits squarely on the shoulders of the Democrat-led SEC. After adding a political disclosure rule to its 2013 agenda, the agency quietly dropped the rule for this year.

Goldstein writes that there are probably two primary reasons that the SEC is not forcing disclosure of anonymous corporate political campaign funds: 1) the Republicans are putting budgetary pressure on the SEC; and 2) it is more than possible that former top-tier corporate attorney Mary Jo White doesn't want to force accountability.

Goldstein documents that GOP pressure in the House gets down to the SEC's bottom line: its budget. In short, the proposal for SEC congressional funding currently includes a provision to prohibit a regulation that would implement transparency:

Last week, the Republican-led House Appropriations Committee passed the bill to fund the SEC for $1.4bn (a figure less than the marketing budgets for many Wall Street firms, and $300m less than the budget requested by President Obama). Buried in the bill is a section that explicitly prohibits the SEC from using any funds from Congress to create political disclosure rules.

As for Chairwoman White, the revolving door between regulators and the regulated (and their high-paid attorneys) might be once again taking its toll:

So how is it that Republicans' statements are so much more effective in influencing Mary Jo White's SEC? Some of her critics theorize that it’s because she agrees with them. Prior to her role as Chair, she spent 10 years representing corporate clients like Bank of America and Morgan Stanley at the law firm Debevoise & Plimpton. And last October, White gave a speech before Fordham Law school that included a critique of the usefulness of company disclosures to investors, even criticizing Congress for requiring companies – like those that manufacture electronics – to disclose if they use conflict minerals (a rule long opposed by Republicans and the future of which is uncertain due to recent court rulings).

There are members of Congress who are advocating for shining sunlight upon corporate political contributions. However, they form a minority within a minority in the House. And don't count on the corporate-friendly Senate to assert transparency leadership in corporate funding; senators feed off of that mother's milk.

The SEC, Supreme Court, White House and Congress support a secret society of campaign funding for businesses with the big bucks.

It's legalized bribery - and those who are paying off our elected officials for tacit favors are protected from public scrutiny.

Copyright, Truthout. May not be reprinted without permission.