Sending Office: Honorable Bill Foster
I invite you to join me as an original cosponsor of the Shareholder Political Transparency Act of 2020, which will shed light on corporate political spending by public companies and provide much needed transparency to investors and the public.
The Supreme Court’s 2010 ruling in Citizens United v. Federal Election Commission opened the door to unlimited political spending by corporations. This decision was premised on the assumption that “the procedures of corporate democracy”
would ensure that political spending remained accountable to shareholder interests. Unfortunately, there is no hope that shareholders can use the ballot box to ensure corporate accountability if they are not provided with information on the kinds, and amounts,
of political spending that companies are engaging in.
Today, a significant amount of corporate political spending is not disclosed—many public companies use investor funds to contribute to dark money entities that are not required to disclose their donors. And while some types of corporate political
spending are required to be disclosed under federal election laws, these disclosures are not designed to protect investors, and are too consuming for the average investor to track down and review.
Investor interest in receiving this kind of information has been growing. Shareholder proposals requesting disclosure of corporate political spending have been one of the most common types of shareholder proposals in recent years. According to
the Harvard Law School Forum on Corporate Governance and Financial Regulation, disclosures on political contributions and lobbying became the most common environmental, social, or governance (“ESG”) shareholder proposal in 2019, representing 28.8% of all ESG
proposals. And in response to investor concerns, more than half of the companies in the S&P 500 have already voluntarily agreed to disclose, to varying degrees, information on their political activities.
Still, for investors to obtain comparable information from the large number of existing public companies that do not currently disclose such information, and to receive such information in a uniform and consistent manner, requires further legislative
action. My bill would amend the Securities Exchange Act of 1934 to require public companies to make quarterly disclosures to their shareholders to provide them with descriptions of the kinds and amounts of political spending that they engage in. It would also
require public companies to disclose, on an annual basis, any political spending that it intends to make in the forthcoming year, to the extent known by the company.
Investors deserve transparency when it comes to corporate political spending that uses their capital. My bill is a common sense step to shining a light on these important practices. For more information or to cosponsor, please contact Diem-Mi
Lu (firstname.lastname@example.org) in my office.
Member of Congress
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