With the most expensive election season in United States history looming heavy in the background, campaign finance reformers have high hopes that federal regulators may consider a new rule requiring corporations to reveal their political spending to shareholders.
The Securities and Exchange Commission (SEC) recently placed the rule on its regulatory agenda, and SEC staff will consider whether to recommend that the commission propose a new rule under an April timeline.
In 2011, a bipartisan committee of ten law professors petitioned the SEC to consider such a rule, and the petition drew 322,000 comment letters from investors, members of Congress and others concerned about campaign finance disclosure, according to reform groups.
The SEC regulates markets and investing, not elections, but the disclosure rule would shed light on corporate political spending by requiring publicly traded companies to report such activity to shareholders.
Under SEC rules, there is no legal deadline for the commission to take action on the disclosure proposal, and the commission is currently busy with a long list of requirements and proposals related to the Dodd-Frank Wall Street reform package, according to an SEC official with knowledge on the subject.
Campaign finance reformers, however, expressed confidence at a Tuesday news conference that the SEC will move forward.
"There are many, many rulemaking petitions that sit in the file.... The fact that they put this on the agenda is a very good sign that they intend to move forward on it," said Adam Kanzer, a disclosure proponent and director of the shareholder advocacy department at Domini Social Investments.
Robert Jackson, a law professor at Columbia University and one of the original petition filers, said in a statement that he hopes the SEC will "shine light" on corporate political spending this year.
For reformers, a proposal from the SEC would be an important step toward dealing with the fallout of the Supreme Court's 2010 Citizens United v Federal Election Commission decision that gave rise to super-PACs and allowed corporations and other large donors to spend unlimited sums to influence elections.
Corporations and mega-donors can funnel money through third-party groups, like the US Chamber of Commerce, that refuse to reveal details on donors who financially support their political activities. The US Chamber of Commerce spent $36 million during the 2012 election, largely in support of Republican candidates.
Outside campaign groups spent more than $1 billion supporting and opposing political candidates in the 2012 election season.
Nonprofit "social welfare" groups, like Karl Rove's Crossroads GPS, spent massive sums on political advertising in 2012 but were not required to reveal their donors.
Pro-GOP nonprofits outspent their Democratic counterparts by at least eight times, and Crossroads GPS alone reported $70.6 million in independent expenditures, according to the Center for Responsive Politics (CRP).
A 3-3 vote deadlocked the Federal Elections Commission in 2011 and prevented the regulators from revisiting disclosure rules and closing loopholes that allow corporations and other wealthy donors to funnel electioneering funds through third-party groups without disclosing the details to the public, according to the CRP. Republicans in Congress have blocked recent efforts by Democrats to require such disclosure.