May 22, 2013

Status of SEC’s Political Contribution Disclosure Rulemaking: Not Yet (& Maybe Never)

Each time I see an article from the mass media indicating that an imminent proposal from the SEC on political contribution disclosure rules, I tweet about how misinformation is so easily spread (here is the latest example of misinformation). A rumor of a proposal coming in April started last year – which I quickly blogged as being unlikely. Now in the course of testifying before a House committee, SEC Chair White laid to rest the rumors that a proposal was coming soon, as noted in this Reuters article. As noted in this Davis Polk blog, House Republicans were disturbed to learn that the SEC is considering such a petition, believing the initiative to be “highly partisan” in light of the controversy surrounding the IRS’ examination of certain groups. Rep. Garrett pressed Chair White to commit that the SEC will not be “bullied by these outside radical groups.” However, Chair White declined to take a position.

As would be expected, there is a groundswell of public support for a SEC rulemaking, evidenced by the 600,000 signatures on the petition for rulemaking and pieces like this Forbes’ article.

Note that Congress has already had SEC Chair White testify in hearings twice during her first month in office. And Ning Chiu blogs about how Chair White has responded to Sen. Rockerfeller’s inquiry about cybersecurity disclosures, noting that Corp Fin has issued comments to about 50 companies.

The Movement for More Political Contribution Disclosures

In this podcast, Lisa Gilbert of Public Citizen’s Congress Watch explains how the movement to elicit more political contribution disclosures is proceeding, including:

– What is Public Citizen (and what is your role there)?
– What has Public Citizen done to help support the political spending disclosure rulemaking petition?
– How are interested parties working together to support the petition?
– What are the political forces at work on this issue?
– What other types of efforts do you foresee to obtain greater disclosure from companies?

Recently, Prof. Lucian Bebchuk submitted a new comment letter to his petition to the SEC…

House Bill: Shareholder Approval of Political Contributions

Meanwhile, Rep. Capuano (D-MA) and Sen. Menendez (D-NJ) re-introduced the Shareholder Protection Act last month, a bill that would amend the ’34 Act to require shareholder approval for political expenditures and require political contribution disclosure in 10-Qs. Here is the related press release.

Meanwhile, President Obama has come out against the House’s “SEC Regulatory Accountability Act,” as noted in Jim Hamilton’s blog

– Broc Romanek