Congress and SEC Mulling New Rules for Corporate Campaign Donations
As the new year begins, both Congress and the Securities and Exchange Commission are pondering what to do about secret corporate campaign donations. The outcome could mean general counsel would be grappling with several new rules on corporate giving.
The SEC quietly took a step toward forcing corporations to disclose their gifts in late December.
On the Friday before the long Christmas 2012 weekendand without a press releasethe agencys Division of Corporation Finance posted an agenda item with the Office of Information and Regulatory Affairs. It simply states, The Division is considering whether to recommend that the Commission issue a proposed rule to require that public companies provide disclosure to shareholders regarding the use of corporate resources for political activities.
The Corporate Reform Coalitiona group of investors, shareholders, activists, and academicsTuesday urged the SEC to act quickly on the reform.
The SEC has been under growing public pressure to consider a disclosure rule after the U.S. Supreme Court unleashed unlimited independent spending in its Citizens United v. Federal Election Commission decision in 2010.
The courts landmark opinion also endorsed strong disclosure laws. So a bipartisan panel of law professors filed a petition with the SEC in August 2011, requesting that the agency pass a corporate disclosure rule.
About 30 percent of campaign contributions are secret, dark money, said Stephen Spaulding, in-house counsel at the nonprofit advocacy group Common Cause. Spauldings group on Tuesday also urged the SEC to adopt a disclosure rule.
According to the Sunlight Foundation, another nonpartisan organization devoted to government transparency, groups that do not disclose their donors spent at least $213 million in the 2012 general election.
Meanwhile, a disclosure billthe Democracy is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Actwas reintroduced with bipartisan support in the U.S. House of Representatives on the first day of the 113th Congress last week. It is the third time that lawmakers have tried to pass the DISCLOSE Act, which would require contributors of at least $10,000 to publicly reveal their gifts.
Common Causes Spaulding praised the bill, telling CorpCounsel.com, The [DISCLOSE] Act would show whether members of Congress are in the pockets of special interests by showing where the money is coming from.
Spaulding explained that it previously passed the House and garnered a majority of 59 votes in the Senate, but failed by one vote to get past a Republican filibuster and onto President Barack Obamas desk. A filibuster requires 60 votes to end it.
His comments came as Senate leaders said they would introduce legislation to change filibuster rules this month.
The filibuster reform bill is supported by such groups as the American Sustainable Business Council Action Fund, which represents some 150,000 small- and medium-sized businesses. The group has labeled the current filibuster situation dysfunctional, abusive, and undemocratic.
It is also backed by Common Cause, which has brought a federal suit challenging the 60-vote threshold as unconstitutional.
On another front, the nonprofit advocacy group Public Campaign Action Fund released a report last week suggesting that corporate campaign contributions are fueling the record amount of filibustering.
According to David Donnelly, executive director of the money-in-politics watchdog group, The filibuster is being used to benefit corporate interests, and the report connects those dots. The use of the filibuster is about who controls the legislative agenda.
The groups report, entitled Cashing in on Obstruction [PDF], was released January 3. It accuses Republican senators of averaging 130 filibusters in each two-year session of Congressdouble the number in each session when the Democrats were last in the Senate minority.
Donnelly told CorpCounsel.com this week that most corporate contributions went to Senate minority leader Mitch McConnell (R-Kentucky). The report lists the dollar amounts McConnell received from named corporations with interests in certain bills that were killed by filibuster.
In response, Robert Steurer, communications director in McConnells Washington D.C. office, on Wednesday defended McConnells record and attacked the report as a shameless hack job.
Steurer went on: The fact that this [report] is peddled on the same week Senator McConnell is credited by Republicans and Democrats alike for saving the country from falling off the fiscal cliff shows how partisan and out of touch the authors of this garbage really are. The thesis of the shoddy work could be proven false in less than 10 minutes by an intern with an iPhone.
In the past McConnell has defended the filibuster, calling it one of the most cherished safeguards of our government, and he has attacked attempts to limit it, saying such efforts are a naked power grab.
But Spaulding countered that the much-used filibuster has been an abuse of the system. Weve seen the filibuster and Senate rules completely twisted like a pretzel to hide from the American people open and robust debate on bills like the DISCLOSE Act, he said. It has harmed our democracy.