New York State Comptroller Thomas P. DiNapoli and New York City Public Advocate Bill de Blasio recently took to the New York Times editorial page to ask the SEC to “do what Congress and the courts have been unable or unwilling to do;” and to do it, if necessary, solely with the votes of Democratic commissioners. What is it they want done? Specifically, they want the Commission to force corporations to disclose their contributions to nonprofit organizations and trade associations.
In support of this attempt to use the federal bureaucracy to bypass the legislative process, they point to the support a similar rule has received in comments to the agency from the broad public. But that support has been almost entirely premised on hostility toward the Citizens United ruling and corporate political speech generally, rather than concerns for shareholder well-being. Of the comments the agency has received, most have come in form letters ginned up by de Blasio himself, along with unions, that rail against Citizens United and corporations. And much of the hostility toward Citizens United is founded on an incorrect understanding of Citizens United and partisan ideology – especially the belief that Citizens United favors conservative ideas – rather than a proper understanding of the First Amendment. In short, de Blasio and DiNapoli are using the Citizens United decision to advance a partisan agenda of state tracking of political activity.
Federal law already requires political action committees (including Super PACs) to disclose all donations, individual or corporate; corporate PACs disclose all their activity; and corporations that make political expenditures themselves disclose that fact. But DiNapoli and de Blasio want more. They want the SEC to force disclosure of contributions to, and membership rosters of, tax-exempt social welfare groups and trade associations that make politically related expenditures. DiNapoli and de Blasio don’t like what these associations have to say, so they have decided to try to use the SEC – an agency that has no business, expertise, or mandate to decide anything related to election law – to hinder corporate commentary on politics.