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Senators urge SEC on political spending

Friday 20 January 2012 - by

Senators have called on the Securities and Exchange Commission to use its authority to force corporations to disclose their political spending in a bid to raise transparency.

US Democrat senator Robert Menendez spearheaded the calls from 14 senators who say that allowing corporations to influence elections without the consent of their shareholders is wrong.

Menendez says: "I whole-heartedly disagree with the Supreme Court's Citizen's United decision that essentially gives corporations the power to influence elections without the consent or knowledge of their shareholders. And I have been fighting to right this wrong.

"We may not be able to overturn this decision, but the SEC can take immediate action and require the public disclosure of political spending by corporations."

At present, corporations are allowed to use general treasury funds for electioneering communications as well as payments to third-parties to run political adverts. These are known as political action committees or 'super Pacs'. They are not required to disclose this spending to the public or to seek approval from the company's shareholders.

The group of senators are pushing for a shareholder protection act which would enforce full disclosure of any political spending by any publicly-owned corporation and would also require shareholder authorisation for this spending.

Investors would need to approve a corporate budget for political expenditures on an annual basis via a majority vote and any expenditure over $50,000 would need to be individually approved. Additionally, the disclosure of each expenditure and individual board member votes would need to be disclosed online within 48 hours.

Menendez says that super Pacs are on their way to spending more than direct campaigns in 2012.

He adds: "These super Pacs have seemingly benign names like 'Americans For This' and 'Americans For That'.

"Make no mistake about it: these are not grassroots movements. They are corporations trying to influence the outcome of elections to whichever candidate will improve their bottom line, even if that's at the public's expense.

"When a corporation hides behind the curtain of the Supreme Court's decision, the integrity of our electoral process is compromised."

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