Political-Disclosure Rule Seekers See Hopeful Sign on SEC Agenda

Proponents of a U.S. Securities and Exchange Commission rule to require public companies to disclose political involvement say they see movement toward such a measure even as the agency signals nothing has changed.

In one of a dozen additions the SEC recently made to its rulemaking agenda at the website of the White House’s Office of Information and Regulatory Affairs, the agency added plans for a proposed rule under an April timeline. An August 2011 petition signed by 10 law professors called for a rule to illuminate how companies contribute to political campaigns -- an idea that has drawn more than 300,000 comment letters.

“The staff is considering whether to recommend a proposal.” John Nester, an SEC spokesman, said in response to a question about whether the inclusion in the agenda meant progress was being made on a rule. Agency officials have made similar comments since the petition was filed in August 2011.

The rule would require companies to disclose contributions to groups engaging in political activities, such as the U.S. Chamber of Commerce, which spent $36 million largely in support of Republican candidates without identifying donors.

Congressional efforts to require such disclosure have been blocked by Senate Republicans, and the Federal Election Commission has been stopped by a 3-3 party line vote from beginning to revisit its disclosure rules.

Dodd-Frank Burden

The SEC hasn’t set a date for action, Nester said, and the timing will depend on the agency’s completion of Dodd-Frank Act requirements. The agency’s rulemaking burden under the 2010 financial-regulation overhaul still includes a long list of contentious rules, some of which haven’t yet been proposed.

“It would be unusual, for sure, for the agency to place a proposed rule on the agenda and not plan at least for the staff to prepare a proposal for the commissioners to review, which, I’d speculate, they are doing now,” said Robert J. Jackson Jr., a Columbia University law professor who was one of the signers of the original petition.

Inclusion of the proposal on a list is a sign of progress, according to Lisa Gilbert, director of Public Citizen’s Congress Watch, part of a Washington-based group that advocacy group that favors stronger campaign finance laws.

“Before this point, what had happened was a filed petition by academics, and there had been no commitment from the SEC to do anything about it,” she said. “We can see that the SEC has now committed to consider the rule-making petition.”

Supporters of the measure plan to hold a conference call tomorrow to push the SEC to complete work on the rule this year.

The commission led by Chairman Elisse Walter, a Democrat, is one member short and is operating with two commissioners from each party.

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