Debunking Myths About Corporate Political Speech

April 24, 2013   •  By Sarah Lee   •  
Default Article

A piece in The New York Times today called “S.E.C. Gets Plea: Force Companies to Disclose Donations” is a good place to begin discussion of why we decided to create a new website devoted entirely to addressing the facts surrounding activist investing and corporate political spending. The site,, is a compendium of information on the issue, and includes insight and analysis from experts such as CCP’s founder and former Federal Election Commission (FEC) Chairman Brad Smith, former SEC Commissioner Paul Atkins, and James R. Copland, Director of the Manhattan Institute’s Center for Legal Policy.

According to The Times piece:

A loose coalition of Democratic elected officials, shareholder activists and pension funds has flooded the Securities and Exchange Commission with calls to require publicly traded corporations to disclose to shareholders all of their political donations, a move that could transform the growing world of secret campaign spending.

S.E.C. officials have indicated that they could propose a new disclosure rule by the end of April, setting up a major battle with business groups that oppose the proposal and are preparing for a fierce counterattack if the agency’s staff moves ahead.

The S.E.C. has been considering a petition — which has received something like a half million comments, most in favor, and many drummed up via form letter by proponents of the measure. Paul Atkins recently addressed that astounding number in an op-ed that appeared in Politico recently:

…The SEC staff will argue that it has received an unprecedented number of comment letters in support of this action. However, it does not mention that 99 percent are form letters ginned up by organizations whose narrow agendas have little to do with advancing the economic performance of companies. Real grass-roots advocates chuckle when they hear that these groups produced over [500,000] letters to the SEC. In the Internet age, small special-interest organizations frequently tap into grass-roots email lists — especially in an election year — to blast out form letters and advance political causes in Washington. With one email and a submit button, poof, you have a synthetic movement. SEC commissioners must remember their duty to protect investors by resisting special-interest efforts that would negatively affect shareholder value.

The agency may propose a new rule by the end of April to create a new corporate disclosure regime for political and lobbying activities, something CCP Chairman and Founder Brad Smith has warned against, most recently before a Senate panel earlier this month.

“Those who seek to push regulation onto other agencies often do so precisely because they seek to bypass such constitutional sensitivities that are, and ought to be a hallmark of the FEC – the agency charged by Congress with ‘exclusive civil enforcement’ of campaign finance laws,” Smith wrote in comments filed before the hearing.

For this reason, we have created a site that CCP President David Keating says is “intended to be a resource that explores the reality behind efforts aimed at limiting corporate speech.”

“Oftentimes, the facts regarding political spending disclosure are very different from the picture painted by narrow interest groups for the media investors, and policymakers.This site will examine and debunk common myths spread by activists seeking to silence corporations. The public benefits from more speech and more speakers, and any effort to target and suppress speech by any group should be rejected. Thus far, the debate has been defined by a small, coordinated group who are using the shareholder proxy process and other tactics to silence corporate speech and achieve their narrow and unrelated public policy goals. It is time investors and corporate executives had a place to go for the facts surrounding this debate.”

The hope is that, as 2013’s proxy season enters full swing, the website will help ensure that facts, and not just myths, reach the public at large.

Sarah Lee

Share via
Copy link
Powered by Social Snap