Shaheen Supports Bill to Bring Accountability & Transparency to Corporate Political SpendingMarch 02, 2021
(Washington, DC) – Today, U.S. Senator Jeanne Shaheen (D-NH) helped reintroduce the Shareholder Protection Act of 2021 to ensure public companies are more transparent and disclose their political spending activities to their shareholders. This common-sense bill led by Senator Bob Menendez (D-NJ) would require large corporations to receive authorization from a majority of its shareholders before managers can spend money on political activities.
Corporate political spending is material information to shareholders, who deserve full visibility into the causes supported by the companies in which they choose to invest. Some public companies’ decision to suspend or reevaluate further political donations is an acknowledgment that political donations can significantly affect a company’s reputation and financial health. Without public disclosure of political contributions, shareholders are left in the dark about decisions that may affect a company’s bottom-line.
“The public deserves transparency around how corporations and special interests funnel dark money to support political causes and influence politics. The flow of dark money is deeply unfair not only to shareholders, whose money is spent without their knowledge to sway campaigns and elections, but also to ordinary citizens who lack the same capacity to make their voices heard,” said Shaheen. “We must stem the flow of money in our politics, and requiring corporate executives to report to their shareholders how they plan to spend their money is an important first step towards accountability. I’ll keep working in Congress to close the floodgates of corporate political spending so we can return the power to everyday Americans and strengthen our democracy."
The Supreme Court’s 2010 Citizens United v. FEC decision opened the floodgates for corporate executives to spend unlimited money from company treasuries to disproportionately influence election outcomes, undermining the health of American democracy. While the Supreme Court has ruled that companies should be treated as people for purposes of free speech in electoral campaigns, the rights of the actual people investing in these large corporations—shareholders—have been largely overlooked. To date, more than 1.2 million securities experts, institutional and individual investors, and members of the public have pressed the U.S. Securities and Exchange Commission (SEC) for a political spending disclosure rule. Yet, no political spending disclosure standards have actually been established, which has allowed corporate executives to continue spending shareholder money without disclosure to and approval from the very investors funding those contributions.
The Shareholder Protection Act:
- Requires shareholders to authorize, on an annual basis, a political activities budget requested by a company. The budget must receive a majority of votes representing all outstanding shares. Fiduciaries voting on behalf of their investors must disclose their vote to investors.
- Covers political spending activities affected by the Citizens United decision, including electioneering communications and independent expenditures. Dues and payments made to trade associations and other tax-exempt organizations are included if they could be used for such spending.
- Requires a company’s board of directors to vote to authorize each expenditure over $50,000 within the overall budget approved by shareholders.
- Requires public companies to disclose (online, to shareholders, and the SEC) individual board member votes and the details of each such approved expenditure.
- Requires the GAO to periodically report to Congress on implementation and compliance.
In response to the destructive Citizens United decision, Senator Shaheen has led efforts in Congress to overturn the case and mitigate the damage done. During the 116th Congress, Senator Shaheen introduced a Constitutional Amendment with former Senator Tom Udall (D-NM), the Democracy for All Amendment, that would overturn the Citizens United ruling and help get big money out of politics. Shaheen has long supported Congressional action to crack down on dark money in politics. Shaheen called out millions of dollars’ worth of dark money ads in New Hampshire and across the country that sought to derail bipartisan efforts in Congress to end surprise medical billing. A report by the New York Times revealed that the group behind this ad campaign, Doctor Patient Unity, is a front for private equity firms on Wall Street.
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