Senators Elizabeth Warren, D-Mass., and Robert Menendez, D-N.J., want us to believe a simple progressive fairy tale that we have been hearing ad naseum for years now: the government couldn’t possibly abuse its power to silence political opponents.
On Wednesday afternoon, Sens. Menendez and Warren are holding a press conference to encourage the Securities and Exchange Commission to require disclosure of all political activity from publicly traded companies. Currently, public corporations aren’t required to disclose any “non-material” political activity.
In reality, this is a push to discourage corporations from exercising their right of free speech and political association. After all, since corporations are already banned from making direct contributions to federal candidates, the proposed measure forces corporations to publicly disclose their support to non-profit organizations such as trade associations and 501(c)(4)s.
So how does this help shareholders?
It doesn’t. The rule is designed to tie the political activities of non-profits directly to the corporations that support the organizations, even if the corporation had no knowledge of the organization’s specific activities. In the past, this information has been used to publicly harass corporations and bully them into “voluntarily” giving up on engaging in First Amendment protected activities.
For the most part, corporate political activity is already publicly available. For example, if shareholders cared, they could find out all about Sen. Menendez’s political backers on the aptly named “Open Secrets” website, which simply puts publicly available FEC data into a more aesthetically pleasing format.
This effort is simply one more entry in a series of incumbent politicians, of both parties, using the power of the government to protect themselves from criticism. It is no wonder, then, that supporters of this regulation have made the laughable claim that “public support for this rulemaking has generated more than 640,000 supportive comments on the SEC’s website.” In fact, “public support” for this rulemaking consists of a handful of comments, and hundreds of thousands of form letters sent out by various advocacy organizations. Even the SEC’s website groups them together as such!
Menendez and Warren want us to believe that this is all for the good of corporate stewardship, and not a blatant ploy to harass and intimidate their political opponents. After all, when has the government ever used agency regulation to do that?