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Sep 02, 2015

Democrats call on SEC to force firms to disclose political spending

Campaigning ahead of 2016 election also creates pressure to ban payouts to executives who leave to work for government

A group of 44 US senators are calling on SEC chairman Mary Jo White to oblige companies to tell investors how much money they spend – and where – on political campaigns. The call comes as campaigning ahead of the 2016 presidential elections increases pressure on regulators to take a stance on politically charged issues.

The 42 Democratic senators and two independents wrote to White to request that she make political campaign spending disclosure a ‘top priority for the SEC in the near term’ and asked her to explain her actions if she does not include the issue on the commission’s agenda for the upcoming year.

‘Because shareholders are the true owners of a corporation, a public company should be required to disclose to [them] how their money is being spent,’ the senators write in the letter filed with the SEC. ‘When it comes to spending on political activity, only 2.2 percent of all public companies in the United States make such disclosures, and they do so voluntarily.’

Shortly after White took office, she withdrew debate over a political campaign spending rule from the commission’s agenda, prompting a series of complaints from investor groups, labor unions and several US state treasurers, as well as former SEC chairs Arthur Levitt and William Donaldson.

The senators point out that the Supreme Court decision in 2010 that eliminated restrictions on corporate campaign spending ‘reversed a long-standing precedent and has moved our country in a different and disturbing direction when it comes to corporate influence in politics.’

At the same time, US presidential candidate Hillary Clinton writes in an article for the Huffington Post that she would support legislation banning companies from making ‘golden parachute’ payments to executives who leave to work for the government.

‘In some cases it can affect public trust – for example, if a public servant’s past and future are tied to the financial industry,’ Clinton writes. ‘That’s when people start worrying that the foxes are guarding the henhouse.’