Fight Over Political Donations Complicates U.S. Spending Billby and
Republicans want to bar SEC from passing disclosure regulation
Interest groups have sought rule on corporate campaign giving
A provision that blocks regulators from making companies disclose their political contributions is threatening to complicate the passage of a bill funding the U.S. government after Democratic lawmakers said they were outraged it got in the legislation.
Slipped in by Republicans, the measure would bar the Securities and Exchange Commission from working on a rule that forces public corporations to reveal their campaign donations, according to a version of the spending bill released Wednesday. While interest groups and liberal lawmakers have repeatedly urged the SEC to approve a regulation on political giving, it hasn’t been a priority for Chair Mary Jo White, who pulled the item from the agency’s agenda in 2013.
The $1.1 trillion spending bill would fund most federal agencies through September 2016 and lawmakers are scrambling to pass it to avoid a government shutdown. The House plans to approve stopgap legislation Wednesday that funds the government through Dec. 22 to give Congress time to consider the full-year measure.
The SEC provision on political spending “further stacks the deck against the middle class,” said U.S. Representative Steve Israel, a New York Democrat who chairs his party’s congressional campaign committee. It’s “unclear” whether Democrats can use leverage to get it out of the spending bill before a Friday vote, he said.
U.S. Representative Gerry Connolly, a Virginia Democrat, said he’s also “concerned” about the provision. “Every vote is a balancing act where you weigh pros and cons,” he said in an interview.
U.S. Representative Steny Hoyer, the House’s second-ranking Democrat, said the SEC measure probably won’t derail the spending legislation.
“I don’t think it’s going to be a poison pill, but it’s something we didn’t like,” he told reporters in Washington. “There are going to be things both sides don’t like.”
White has faced intense lobbying and criticism for not passing a campaign finance rule since becoming SEC chair in 2013. In March of this year, Public Citizen and other groups paid to plaster cartoons of her wearing a cape and tights all over Washington subway stations along with the phrase: “Mary Jo is the superhero we need to end this menace.” U.S. Senator Elizabeth Warren, a Massachusetts Democrat, then wrote a letter to White in June calling her tenure “extremely disappointing,” pointing to inaction on the political spending rules as one of her failures.
The lawmaker and interest group pressure on White should die down if President Barack Obama signs a spending bill that bars the SEC from working on the rule.
Debate over corporate political spending gained new prominence after the U.S. Supreme Court ruled in a 2010 case known as Citizens United that companies and unions could spend unlimited money on election ads. While companies are required to report donations made through political action committees, they don’t have to report contributions to third parties, including industry groups such as the U.S. Chamber of Commerce, which fund ads for and against candidates.
Supporters of the SEC’s involvement say shareholders deserve to know about political activity that could offend customers and, if controversial enough, impact a company’s profits. Skeptics, including many business groups and securities lawyers, say political spending is an insignificant cost compared with other corporate expenses.
White herself said in October 2013 that some rules the regulator was being pushed to adopt “seem more directed at exerting societal pressure on companies to change behavior, rather than to disclose financial information that primarily informs investment decisions.”