As a follow-up to our post of February 7th regarding increased stockholder interest in the disclosure by public companies of their political expenditures and activities, we note that in a speech to securities law practitioners on February 24, 2012, SEC Commissioner Luis A. Aguilar called for the SEC to adopt rules requiring public companies to provide uniform and consistent disclosure of their corporate political expenditures. “Requiring transparency for corporate political expenditures cannot wait,” Commissioner Aguilar stated, citing the SEC’s responsibility to “ensure that investors are not left in the dark while their money is used without their knowledge or consent.”
Commissioner Aguilar pointed out that the Supreme Court’s 2010 decision in Citizens United v. Federal Election Commission, which struck down restrictions on certain corporate political spending, also indicated that while the government could not suppress speech altogether, it would be permitted to regulate political speech through disclosure requirements. He noted that numerous commentators have urged the SEC to address this issue, and observed that in 2011, proposals related to political spending were the leading topic among stockholder proposals appearing in public company proxy statements.
According to reports, SEC Chairman Mary Schapiro expressed the view that shareholders already have the ability to require public companies to disclose their political expenditures, noting that “[c]ompanies that receive a shareholder proposal asking them for disclosure about political contributions have been required to put those shareholder proposals in the proxy, so there is a mechanism for shareholders to directly represent to the companies they own to have that issue put forward for a shareholder vote.”