Today Congressman Mike Capuano (D-MA) and Senator Robert Menendez (D-NJ) reintroduced the Shareholder Protection Act which requires CEOs to seek authorization from a majority of shareholders before a corporation can spend money from its general treasury on political activities. It also requires the disclosure of these expenditures.
"The Supreme Court's decision in Citizens United v. FEC fundamentally re-wrote the nation's campaign finance laws. When the court ruled that corporations should be treated as persons under the First Amendment regarding election spending, it gave corporations an outsized voice in the political process. This decision allows corporations to overshadow the voice of the voter," stated Congressman Capuano who first filed this bill in 2010.
"Since the Supreme Court ruled in Citizen's United that corporations are people and can spend money unlimitedly, there has been a tsunami of cash influencing our elections and undermining our democracy," said Senator Menendez. "Enough is enough. Individual citizens should determine the outcome of our elections, not multi-billion-dollar corporate interests, or worse, a foreign government, so it's time we pass this legislation to give shareholders a voice over how their corporate dollars are spent on elections."
The Citizens United decision allows CEOs to spend unlimited corporate treasury funds on campaigns. One of the effects of this decision is that corporations have been able to conceal their campaign spending by funneling the money through electioneering nonprofit groups. These groups in turn buy campaign ads without disclosing the corporate donors. According to Open Secrets, more than $1 billion was spent by outside groups in the 2012 federal elections. Much of this money went through trade associations and non-profits with minimal disclosure.
The Shareholder Protection Act of 2013 would:
require a majority of shareholders to authorize an overall political budget before general treasury funds can be spent on political activities;
require a Board of Directors vote to authorize each expenditure over $50,000 within the overall budget approved by shareholders;
require the disclosure of corporate political spending to shareholders, the SEC, and the public on a quarterly basis, and board approval of significant expenditures disclosed on-line within 48 hours.