Monday, 13 May 2013 10:36

Chance to Limit Citizens United Damage if SEC Chair Requires Big Money Transparency


                                                                                                                                        Mary Joe White, SEC Chair

maryjowhiteMary Jo White is Obama's new chair of the Securities and Exchange Commission (SEC).  She was a controversial candidate, given her and her husband's financial and legal connections to financial firms that are under SEC regulation.In fact, White's fitness for regulating Wall Street was the subject of a BuzzFlash at Truthout commentary on March 13 of this year, "Mary Jo White and the Incestuous Mutually Beneficial Relationship Between Regulators and Wall Street."    

But White is likely to have an early chance to prove that she is not totally part of the elite revolving door that allows the financial and corporate world to, in essence, regulate themselves through having their own become the regulators. White will soon be presented with a proposed SEC rule (the drafting of the regulation preceded her arrival at the agency) which would help to undercut – although not eliminate – the democracy-weakening Citizens United decision.

According to a Tampa Bay Times editorial: 

Shareholders in publicly traded corporations have a right to know if their investment is being spent on political campaigns. And voters have a right to know what interests are trying to persuade them. But three years after the U.S. Supreme Court opened the floodgates for American corporations to pour money into campaigns, the transparency it urged in that same decision does not exist. A proposed rule before the U.S. Securities and Exchange Commission offers the best hope yet that publicly traded corporations will have to fully disclose donations to political organizations.

It's notable that since the 2010 ruling in the Citizens United case, few publicly held corporations have donated to super political action committees, which are regulated by the Federal Elections Commission and require disclosure of contributions. Instead, corporations have sent hundreds of millions of dollars to tax-empt groups such as the U.S. Chamber of Commerce, Karl Rove's Crossroads Grassroots Policy Strategies, the American Gaming Association or the National Retail Federation, all of whom engage in political activity on behalf of candidates but are not subject to the same PAC disclosure standards.

The proposed SEC rule would end that charade and require publicly traded corporations to reveal how they spend shareholder money for political purposes.

A recent UPI article sheds more light on the possible SEC regulation:

A proposed federal regulation that would undo some of the effects of the U.S. Supreme Court's Citizens United ruling has been languishing at the Securities and Exchange Commission for a year and a half, but there are signs the commission may be making a decision on it relatively soon.The regulation would force tens of millions of dollars in up-to-now secret political donations from corporate general funds into the light.SEC spokesman John Nester issued a statement last week that didn't contain specifics, but indicated the proposed regulation would be up to bat in the coming weeks or months.

As Bill Moyers and Michael Winship noted of White on Truthout:

In our last episode of that ongoing Washington soap opera, “As the Door Revolves,” we introduced you to former federal prosecutor Mary Jo White, pursuer of drug lords and terrorists, who left government to become a hot shot Wall Street lawyer defending such corporate giants as JPMorgan Chase, UBS, General Electric and Microsoft. Oh yes — and former Goldman Sachs board member Rajat Gupta, currently appealing his insider trading conviction.The New York Times reports that White and her husband, who’s also a corporate litigator, have a net worth of at least $16 million and investments that might be valued as high as $35 million.

Now, courtesy of President Obama, Mary Jo White’s been named to head the SEC, the Securities and Exchange Commission — the very agency that regulates her clients and everyone else doing business in the stock market.

SEC Chairman White will shortly have a chance to prove that she is more than a member of the permanent ruling class of the wealthy whose motto is, "First of all, do no harm to your fellow elites, whatever their financial misdoings."

She can approve the regulation that will allow the sun to shine on currently undisclosed large financial political contributions to groups such as Karl Rove's Crossroads, secret buyers of the government that are flourishing due to the Supreme Court Citizens United decision.

(Photo: Wikipedia)

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