Five years ago, President Obama decried the U.S. Supreme Court’s widely unpopular decision, Citizens United v. FEC, in his first State of the Union address. Tonight, Obama will give his second-to-last SOTU. And if Obama does address the need to rein in secret campaign money, as the Daily Beast implies, most of America will thank him.
Public disapproval of Citizens United has only deepened since the Court issued its ruling in 2010. Asked about corporate political spending, between 80 and 90 percent of Americans across party lines agreed that corporate political spending “drowns out the voices of average Americans,” that corporations and corporate CEOs have “too much political power,” and that corporate political spending has made federal and state politics more negative and corrupt. Overwhelming disgust with special interest money in politics is one thing that seems to transcend party lines.
Majorities across parties also agree about one key solution to the problem: greater transparency requirements. Three-quarters polled are in support of new rules that would require corporations to disclose their political spending. According to the Center for Economic Development, 90 percent of business executives support full disclosure of political contributions made by individuals, corporations and labor unions to political committees or other groups that spend money in elections.
Since we can’t count on a deadlocked Congress to take up the issue of transparency, in the wake of the presidential signing of the recent massive spending bill (the “CRomnibus”), which included a provision that allowed the richest to spend 10 times more when giving to political parties, the need for the Obama administration to act in support of transparency and accountability in political spending has never been more pressing.
White House Press Secretary Josh Earnest said in a briefing before the congressional vote on the bill that Obama believed there should be “significant reform” of the campaign finance system and that “we should have a public debate about it.” It is imperative that the White House spur that debate as well as reestablish its bonafides as a reform administration. There a number of ways it could do so just by increasing transparency.
The administration could enact a long-dormant proposal to require disclosure from government contractors who receive taxpayer dollars. It could support well-crafted new IRS rules defining political activity. Or it could support a Securities and Exchange Commission (SEC) rulemaking requiring publicly held companies to disclose their political spending—an idea that has garnered a record million-plus supportive comments.
Surprisingly, corporate America agrees. Half of the companies in the S&P 100 now make their political contributions transparent and require their directors to oversee the process.
These companies have changed their policies to preserve their own reputations. Nobody wants to become the next Target, which faced boycotts and widespread criticism in 2010 after making a large contribution to a candidate whose anti-gay stances enraged its customers.
Shareholder proposals have been an important driver of enhanced disclosure and oversight, supported by a critical mass of investors. In 2011, investors managing assets worth some $700 billion wrote to the SEC supporting the rule that would require public companies to disclose to shareholders the use of corporate resources for political activities. Former Vanguard mutual fund CEO John C. Bogle and six state treasurers also support the rule.
In addition, the Obama administration would have the support of many investment professionals. In a new survey by the CFA institute, a global association of investment professionals, of the more than 1,500 investors surveyed, 60 percent supported the idea of requiring full disclosure of donations made by political causes with company dollars.
In Citizens United, Justice Anthony Kennedy wrote that with disclosure, “shareholders can determine whether their corporation’s political speech advances the corporation’s interests in making profits, and citizens can see whether elected officials are ‘in the pocket’ of so-called moneyed interests.” But five years after that game-changing decision, shareholders and citizens are still in the dark, aware that secret money flows rig the game but unable to gauge which companies are doing the spending. It’s time for the administration to take action and improve the clarity of the system.
Lisa Gilbert is the director of Public Citizen’s Congress Watch.
Lead photo: Brian Stansberry, via Wikimedia Commons