Congressmen Salud Carbajal (D-Calif.) and and Zoe Lofgren (D-Calif.) have reintroduced the Corporate Political Disclosure Act, H.R. 1053. This legislation requires publicly traded corporations to disclose political expenditures through the Securities and Exchange Commission to their shareholders and the general public.
The legislation would complement Congress’ first bill of 2019, the For the People Act (H.R. 1), legislation that also seeks to reform disclosures on corporate donations. H.R. 1 seeks to reform the campaign finance system and expose dark money in politics by upgrading online political ad disclosures and requiring all organizations involved in political activities to disclose their large donors.
Since Citizens United v. FEC ruling, undisclosed spending in campaigns has increased dramatically. According to the Center for Responsive Politics, special interest groups spent nearly $1.5 billion on the 2016 presidential election, Carbajal, also a co-sponsor of H.R. 1, noted.
“Shareholders deserve to know exactly where their money is going when they choose to invest in a company,” Carbajal said in a statement. “For years, Congressional Republicans have blocked the Securities and Exchange Commission from shining a light on the political contributions that shareholder funds are supporting. That must change. [Citizens’ voices] shouldn’t be drowned out by billions of dollars in secret political advertising backed by corporations that place making a profit above the public interest.”
In the absence of legislation or SEC rulemaking on this issue, there has been a recent trend where shareholders are turning to the proxy process for efforts to compell corporations to become more transparent about their political spending. Also, 294 out of S&P 500 companies have implemented some form of disclosure of their spending on political campaigns and lobbying activities, according to the 2018 CPA-Zicklin Index. The Corporate Political Disclosure Act would create a uniform reporting requirement through the SEC.