- Regulator faces friendly fire at Banking Committee hearing
- Senate’s Schumer says agency’s resistance ‘hurting America’
U.S. Senate Democrats unleashed a barrage of criticism at President Barack Obama’s hand-picked head of the Securities and Exchange Commission over her refusal to pursue rules that would force corporate donors to disclose political contributions.
Senators Charles Schumer of New York and Elizabeth Warren of Massachusetts led the attacks on SEC Chair Mary Jo White at a hearing in Washington on Tuesday, reflecting Democrats’ decision to turn up the heat on the issue during a presidential campaign in which the influence of big-money has been decried by candidates in both parties.
“You’re hurting America,” Schumer said to White in response to her refusal to begin work on the political spending rule. “I wish you would change your mind.”
Democrats have pushed the SEC to enact new disclosure requirements after the U.S. Supreme Court’s 2010 decision in the Citizens United case, where it ruled that companies and unions could spend unlimited money on election ads. Republican lawmakers last year passed a measure barring the SEC from working on a rule, but that hasn’t stopped Schumer and others from demanding action.
White removed the request for rulemaking from the SEC’s agenda in 2013 and defended that move Tuesday, saying that while she respects both sides of the argument over whether spending should be disclosed, the issue isn’t one that she sees as a priority.
Warren challenged White, telling her that she should be doing more to ensure investors have enough information -- including political contributions -- about companies in which they invest. She criticized the SEC for ignoring the political disclosure rule while pursuing a study of whether companies are disclosing too much information.
“Instead of making up work to help giant corporations, the SEC should do its job,” said Warren. “A year ago I called your leadership at the SEC extremely disappointing, today I am more disappointed than ever.”
“I’m disappointed in your disappointment,” White responded, adding that she couldn’t “disagree anymore with your characterization of what we’re trying to do to improve our disclosure regime for investors, to make it better.”
Democrats have made the push for a political spending rule a key part of their policy agenda. Campaign finance disclosures was a central issue in a package of proposals Democrats unveiled last week that will likely bolster support from progressive voters ahead of the November election.
While some companies voluntarily provide information on their political spending, the SEC would likely need to create a rule for all investors to be able to get that kind of information. Opponents have said such a rule would be unconstitutional; advocates say it would increase transparency and hold companies more accountable to their shareholders.
Disclosure requirements on corporate political spending has also caused ongoing upheaval for the Senate Banking Committee. The panel delayed a vote earlier this year on advancing several key financial services nominees, including two for SEC candidates, after Democrats raised concerns that they wouldn’t push for political spending requirements. The delay has meant the SEC is no closer to having a full panel of officials who get a say on rules for public companies and whether to punish individuals and corporations for violations of securities laws.