As Dark Money Monsters Torment Investors, Shareholders Need SEC Chair to Be Superhero; They Ask: ‘Where Is Mary Jo White?’
- Dale Eisman
With monsters on the loose slinging blobs of corporate cash, frantic investors ask, “Who can rescue us from this dark money menace?” In the crowd, a woman remembers rumors that the chair of the U.S. Securities and Exchange Commission (SEC) has special powers to curb corporate political spending. “Mary Jo White is the superhero we need to end this menace,” another onlooker shouts. “Where is Mary Jo White?”
That’s the narrative of a month-long ad campaign launched today by investors and public interest organizations. The goal is to persuade the SEC to require publicly traded corporations to disclose their political spending.
Since the U.S. Supreme Court’s overreaching decision in Citizens United, corporations have had greater leeway to spend shareholder money to influence politics, but no new rules or procedures have been established to ensure that shareholders – those who own the corporations – are informed of decisions about spending in politics.
Subway travelers who enter and exit Union Station in Washington, D.C. – a major transit hub near the SEC’s headquarters – will see every available ad space taken up with comic strip-style illustrations of frightened investors and voters calling on SEC Chair Mary Jo White to save them from monsters that have taken shareholder democracy hostage. SEC Chair Mary Jo White is depicted as a superhero who can rescue them from dark money threatening their investments, but where is she? The ads will be promoted by a social media campaign centered around #WhereIsMJW and including an animated video.
The ads and video, available at www.WhereIsMJW.com, are part of a push by the Corporate Reform Coalition to ensure that shareholders and voters know how much corporations spend to influence elections, and which races they fund. The ads were paid for by Avaaz, Public Citizen, Common Cause, U.S. PIRG, Greenpeace, the International Brotherhood of Teamsters and Communications Workers of America.
“From Big Oil to Big Pharma, this undisclosed dark money is rotting our corporate democracy from the inside out, and thousands of citizens are saying no more dirty secrets,” said Joseph Huff-Hannon, senior campaigner with Avaaz. “This cheeky ad campaign is calling on SEC Chair Mary Jo White to defend us and our country from these creatures. We know she can. The only question is, will she?”
“Corporate political spending requires particular investor protections because it exposes investors to significant new risks,” said Lisa Gilbert, director of Public Citizen’s Congress Watch division. Public Citizen is a co-founder of the Corporate Reform Coalition. “Corporate political spending choices may diverge from a company’s stated values or policies, or may embroil the company in hot-button issues. Investors have a right to know what candidates or issues their investments are going to support or oppose.”
The ad campaign comes in advance of the SEC’s spring announcement of its rulemaking agenda. Under former Chair Mary Schapiro, the agency had included a political disclosure rule on its 2013 agenda, but Mary Jo White removed the rule last year, sparking outrage among investors and the public and leading many to ask, “Where is Mary Jo White on this important investor priority?”
A petition requesting the rulemaking was filed in 2011 by a bipartisan committee of leading law professors. A record-breaking million-plus comments have been submitted to the SEC from retail and institutional investors in support of a rule. The comments have come from diverse sources such as John C. Bogle, founder and former CEO of Vanguard; more than 70 current and former members of Congress; five state treasurers; the Maryland State Retirement Agency; US SIF: The Forum for Sustainable and Responsible Investment; and a large group of firms managing more than $690 billion in assets.
As evidence of strong investor concern about political spending, in the past five years, shareholders have filed more than 500 resolutions on corporate political activity. In 2014, resolutions on political activity were the highest scoring proxy proposals, and four proposals received majority support despite opposition from corporate management.
This year, investors have filed more than 110 proposals around corporate political activity – more than a quarter of all shareholder proposals filed. At meetings in April and May, shareholders will go up against some of the largest companies in the world, but most will not achieve the disclosure they deserve. The ad campaign is designed to spotlight the fact that SEC Chair Mary Jo White is the superhero with the power to end the menace of dark money in investments.
“Since the U.S. Supreme Court ruled in Citizens United in 2010, the political landscape has changed drastically, but the rules of corporate governance have not caught up. The court’s opinion was predicated on disclosure and the process of corporate democracy, but the 2014 midterms were flooded with almost $200 million in dark money, and shareholders, the owners of corporate wealth, had no way of knowing where that money was coming from. Investors need SEC Chair Mary Jo White to act and require all publicly traded corporations to disclose their political spending.” – Emma Boorboor, democracy advocate, U.S. PIRG
“Disclosure of political spending is required for labor organizations. SEC Chair Mary Jo White should make the same requirement for corporations.” – George Kohl, senior director, Communications Workers of America
“Publicly traded corporations, including many in the fossil fuel industry, are getting away with hiding their political spending from shareholders and the public, polluting not only our climate, but our democracy. The public deserves to know how corporations are spending investor cash to influence elections. More than a million people have asked the Securities and Exchange Commission to take action, so the question is, ‘Where is Mary Jo White?’ ” – Rachel Rye Butler, democracy campaigner, Greenpeace
“The Supreme Court’s decision in Citizens United to unleash corporate political spending was premised largely on the idea that voters would know which corporations were investing in which candidates and how much they were giving to each. We thought a little humor might draw attention to the issue while still calling on the need for the SEC to force public companies to provide that vital information.” – Karen Hobert Flynn, senior vice president for strategy and programs, Common Cause
“Corporations are secretly spending millions of dollars on political campaigns, and as investors, the Teamsters are concerned that we cannot evaluate potential conflicts or risks.” – Jim Hoffa, general president, Teamsters. The Teamsters invest more than $100 billion in the capital markets through affiliated pension and benefit funds.
“The SEC has the authority to regulate public corporations in the public interest and to protect investors. Five years after Citizens United allowed new corporate spending in elections, Chair Mary Jo White cannot continue to evade her responsibility to update the agency’s rules to require disclosure of corporate political spending in the face of growing need and demonstrated demand.” – Liz Kennedy, campaign strategist and counsel, Demos