No Political Spending Disclosure on SEC Agenda

By Cydney Posner

The SEC has announced its fall 2014 rulemaking agenda  and, as noted by the Washington Post,  the agenda no longer includes any intention to propose disclosure of corporate political spending. According to the SEC spokesman, the agenda represents the SEC's "best estimate as to what would be ready for Commission consideration by fall of 2014." The possibility of rules that would require corporations to disclose their political spending has been a hot topic for several years. (See my articles of 10/3/13, 5/7/13, 4/25/13, 2/26/13, 11/8/12, 6/7/12, 7/20/11, 7/14/11,11/05/10, 7/30/10 and 3/23/06.) There is no explanation for the deletion, but the agenda is clearly focused on implementing rulemaking mandated by Dodd-Frank (compensation clawback policy, pay-for-performance and pay-ratio disclosure, hedging policy disclosure) and the JOBS Act. However, the article also suggests that Chair Mary Jo White may have felt some pressure to avoid the issue: "Soon after joining the agency, White was pressed by some Republican lawmakers to abandon any plans to require the disclosures. At a House hearing, these lawmakers said the petition was a highly partisan one that would drag the agency into a political fray. The petition also has been fiercely opposed by business groups, some of which argue that the information is unlikely to be material to shareholders. White did not take a position on the issue then, but she assured lawmakers that she was an ‘apolitical' and ‘very independent' person who would defer judgment on the topic until further study by her staff." Keeping up the pressure on the other side is Senator Robert Menendez (D-N.J.), who introduced legislation (S.824 - Shareholder Protection Act of 2013) that would require political spending disclosure, as well as shareholder authorization. The bill was co-sponsored by several Democratic senators, including Richard Blumenthal (CT), Sherrod Brown (OH), Dianne Feinstein (CA), and Elizabeth Warren (D-Mass.). (See my email of 7/14/11 re a predecessor of the 2013 bill.)

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