Corporate political funds may be unmasked by shareholder rights

Scumbag-in-chief Thomas says corporations have a right to political secrets

A U.S. Supreme Court ruling last year opened the floodgates to corporate political donations, much of it secret, but a process begun in another government agency may force those donations into the light of day…

The Supreme Court’s narrow decision in Citizens United vs. the Federal Election Commission…said the political speech of corporations was protected by the First Amendment. That applied even if the funds corporations were spending in political races belonged to stockholders…

Justice Kennedy said limiting corporate political contributions was an exercise in thought control…Not that Justice Kennedy has anything against thought control on behalf of corporations.

Since then, Americans were faced with the prospect of increasingly expensive elections funded by increasingly covert political donations from corporations, not from individuals, with both major parties, Democratic and Republican, scrambling for their share of unlimited money.

Riding to the rescue were 10 corporate law professors who call themselves the “Committee on Disclosure of Corporate Political Spending.” In August, the group submitted a “petition for rulemaking” to the Securities and Exchange Commission with a simple message: “We ask that the commission develop rules to require public companies to disclose to shareholders the use of corporate resources for political activities.”

In other words, if executives want to participate in high-stakes politics using corporate funds, they should have to publicly tell stockholders what they’re doing. After all, those corporate funds belong to the stockholders, not corporate management with their own political agendas…

“Disclosure of corporate political spending is necessary not only because shareholders are interested in receiving such information, but also because such information is necessary for corporate accountability and oversight mechanisms to work,” the petition argued. “The Supreme Court has often recognized, and indeed relied upon, these accountability mechanisms, particularly when corporations use shareholder resources for political purposes…

The petition was filed using Rule 192. Under the rule, if the SEC decides to act on the petition it must file notice in the Federal Register of the time and place of the rulemaking procedure.

But the SEC is under no compunction to act on the petition at all. Meanwhile, the money is flowing and the clock is ticking toward the 2012 election.

The odds are split on whether or not the SEC actually gets off their rusty-dusty and does anything about this petition for a decision.

On one hand, given the history of who the SEC actually thinks they work for there is little or no reason to expect anything to done which positively supports the needs of shareholders much less the public at large.

On the other hand, the SEC is still a bit gunshy about appearing to be complete phonies under the corporate thumb – even though it’s true – because of all the bad press they’ve gotten for ignoring the buildup of corruption that dropped everything from the Madoff Ponzi fraud to the subprime massacre and the resulting Great Recession – into their responsible laps. They may do something about the petition just to cover their buns.

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