Transparency in Corporate Political Spending Act would allow the government to require public companies disclose their political spending
The potential requirement has been blocked for six years by a policy rider passed by Congress.
Context
2010’s Supreme Court decision Citizens United v. FEC struck down dollar limits for corporate or union spending on political advocacy, saying they ran afoul of the First Amendment. Though such organizations remain limited in the amount they can contribute directly to a candidate’s political campaign, through so-called “super PACs” they can now spend unlimited amounts on political advocacy for or against a candidate.
The 5–4 Supreme Court decision was supported by five Republican-nominated presidents and opposed by four Democratic-nominated ones. Since then, the results of the decision have borne out a conservative tilt. In the 2020 election cycle, 2,276 super PACs spent more than $2.1 billion total — with 56 percent of that money going towards conservative causes.
Since Democrats recognize that Citizens United remains the law of the land for now, especially since the Supreme Court’s conservative majority has only expanded since 2010, some have proposed an idea: if such spending can’t be capped, perhaps it can be fully disclosed.
History of the proposal
In 2013, the Securities and Exchange Commission (SEC) during the Obama Administration proposed a rule requiring all publicly-traded companies to disclose their political spending, but they dropped it a few months later. Throughout 2014, Obama’s SEC Chair Mary Jo White refused to take up the issue, saying she was hesitant to issue rules that “exert societal pressures on companies.”
In 2015, Republicans took control of both the House and Senate. That year, Congress added a policy rider to an appropriations law that prevented Obama’s SEC from developing such a rule. From 2017 to 2020, Donald Trump’s SEC Chair Jay Clayton opposed such a rule, meaning the commission was never going to act on it anyway.
Could that change in 2021? At his Senate confirmation hearing, Joe Biden’s SEC Chair nominee Gary Gensler stopped short of outright endorsing the proposal, but said the commission “should consider” it. The problem for Democrats is, even if the SEC does want to implement the rule, they’re still blocked from doing so by a December 2020 policy rider to a larger appropriations law.
What the bill does
The Transparency in Corporate Political Spending Act would repeal that policy rider, opening up an avenue for the SEC to potentially require publicly-traded companies disclose their political spending.
It was introduced in the House on January 21 as H.R. 403, by Rep. Andy Levin (D-MI9).
What supporters say
Supporters argue that the American people should have full information available about how the companies they buy products and services from are spending their money. What if the lawnmower or microwave or television you bought is being used to support a candidate you hate?
“It is more apparent than ever that Americans have a right to know how major companies influence our politics,” Rep. Levin said in a press release. “Secret corporate spending poses a threat to our democracy, to citizens’ faith in their political system and to investor confidence.”
“For years, an appropriations rider has stopped the SEC from taking commonsense steps to increase transparency in corporate political spending,” Rep. Levin continued. “This legislation will remove that rider and pave the way for increased oversight of our country’s wealthiest corporations and donors.”
What opponents say
Opponents counter that the SEC’s job is economic in scope, but this proposal would expand its mandate into dangerous and less-than-fully-economic territory.
“The overwhelming majority of political activity — corporate or otherwise — is publicly disclosed under current regulations, and federal law already requires the disclosure of all material corporate activity,” Center for Competitive Politics Legal Director Allen Dickerson said in a press release. “This proposal would have involved the SEC in the difficult business of regulating political speech, a job for which it is poorly equipped, and which would have proved a distraction from its important work in the economic sphere.”
Odds of passage
Rep. Levin previously introduced the bill in 2019. It attracted 16 cosponsors, all Democrats, but never received a vote in the House Financial Services despite being controlled by Democrats at the time.
The current version has attracted a slightly larger 18 cosponsors, all Democrats. It awaits a potential vote in the House Financial Services Committee.
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This article was written by GovTrack Insider staff writer Jesse Rifkin.
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