As investors and other react to the U.S. Supreme Court’s decision in Citizens United to allow unlimited corporate political spending, it is more apparent than ever that shareholder proposals calling for corporate political disclosure are a waste of time.
The Capital Eye, the blog for the Center for Responsive Politics has mentioned a recent agreement between Bank of America and New York City Comptroller John C. Liu who is all agog over the fact that the company has agreed to disclose its political contributions. In these sorts of matters, the devil is in the details, to wit:
- The information Bank of America will publish is already publicly available,
- Bank of America will not publish donations made individually by its employees, including top executives who routinely contribute to political causes with their employer in mind.
- Bank of America is refusing to disclose money it donates to not-for-profit political organizations, such as the U.S. Chamber of Commerce, that now, thanks to the recent Supreme Court decision Citizens United v. Federal Election Commission, have the ability to spend unlimited amounts of money on advertisements advocating for or against specific political candidates.
The Controller is obviously giddy about his success but he has clearly missed the point. Some time ago, corporations figured out that contributing directly to political causes exposed companies to too much scrutiny. With organizations like the U.S. Chamber of Commerce willing and able to do the dirty work for them, why not give them piles of cash, launder it so that no trail could be found by the public and really affect change that matters to corporate executives. With unlimited political spending now available to corporations thanks to the U.S. Supreme Court, why bother with direct political giving? If the NY City Controller wants disclosure, no problem.
Coincidentally. our friends at MoxyVote noted on their blog recently that John Bogle, the founder of Vanguard and a leading advocate for investors argues that corporations are not people and don’t deserve the free speech treatment afforded them by a recent Supreme Court decision infamously known as Citizens United.
[p]ublic companies aren’t people. As Justice John Paul Stevens, writing for the minority, observed, the court committed a grave error in treating corporate speech the same as that of human beings. The notion that the same freedoms should apply when a public company, often with tens of thousands of owners, speaks in matters beyond the scope of its business affairs offends common sense.
Bogle then suggested an incredibly simple idea that will have executives screaming. He proposes a shareholder proposal calling for shareholder pre-approval of political contributions.
RESOLVED: that the corporation shall make no political contributions without the approval of the holders of at least 75% of its shares outstanding.
Simple and straightforward I say. Whether the SEC in its infinite wisdom would vet this remains to be seen but let’s test this out shall we?