Does SEC Chair have the Power to Force Corporations to Disclose Political Influence Money?

The Corporate Reform Coalition and others are attempting to engage Mary Jo White, S.E.C. Chair, to force corporations to disclose to shareholders where their investment dollars are being spent to influence the political process. Sounds like a good thing.

“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.” (Read the full Corporate Reform Coalition press release here.)

Getting Mary Jo White to act is the goal of a rather creative endeavor. Positioning Ms. White as a superhero that can save our democratic process from the evil “dark money menace,” an ad campaign is plastered in a subway entrance/exit near SEC headquarters in Washington, D.C. “The ads and video, available at, 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.” There’s also #WhereisMJW to boost the campaign’s visibility.

“’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.’”

Why run the ad campaign now? “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?’” Shareholder disclosure has a broad base of supporters.

“Disclosure of political spending is required for labor organizations. S.E.C. Chair Mary Jo White should make the same requirement for corporations,” George Kohl, senior director, Communications Workers of America, is quoted as saying.

Mary Jo White was nominated to be SEC Chair by President Barack Obama on Feb. 7, 2013, and confirmed by the U.S. Senate on April 8, 2013. The Huffington Post called her “a well-respected attorney who won high-profile cases against mobsters, terrorists and financial fraudsters over the course of nearly a decade as the U.S. attorney for Manhattan.” (Source: Wikipedia)

“In 2013, she announced plans to shift the agency away from its decades-long practice of allowing virtually all defendants to settle without admissions of wrongdoing, making it a central element in her enforcement platform.” (Source: The New York Times article “She Runs S.E.C. He’s a Lawyer. Recusals and Headaches Ensue.” by Peter Eavis and Ben Protess, Feb. 23, 2015)

A political independent, she has a reputation for toughness. Sounds like she could be a likely superhero, right? Her hands might be tied with strong ethical rope in some instances.

“Because of ethics rules that Ms. White follows, she must leave all [Cravath] cases in the hands of the commission.” [Cravath, Swaine & Moore is the firm where her husband, John, practices law. He and the firm represent many corporations, some of which are facing S.E.C. investigations. After Ms. White joined the S.E.C., Mr. White converted his Cravath partnership so that he would no longer receive a share of the firm’s profits.] “Without Ms. White, some cases have split the agency’s four remaining commissioners, pitting two Democrats who have endorsed the public uproar over financial wrongdoing against two Republicans who have expressed reservations about levying big corporate fines. Ms. White, a former United States attorney in Manhattan who promotes big fines and admissions of wrongdoing, would otherwise provide the deciding fifth vote.” (Source: Ibid)

It must be noted that Ms. White is not the only one facing recusal. At times, other commissioners must also recuse themselves. The articles goes on to say: “Private sector experience like hers sharpens the prosecutorial acumen of the agency, Ms. White’s supporters say. And they note that the S.E.C. last year announced a record number of enforcement actions, including actions she supported against Morgan Stanley and Credit Suisse.”

Here’s to hoping that the Corporate Reform Coalition’s Where is Mary Jo White ad initiative will have the desired result.

The Corporate Reform Coalition is made up of more than 75 organizations and individuals from good governance groups, environmental groups and organized labor, and includes elected officials and socially responsible investors. The coalition seeks to promote corporate governance solutions to combat undisclosed money in elections.


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