"Reform Is Needed To Stop Us From Going Down The Rabbit Hole Of Corporate Spending"
Our guest blogger is Lisa Gilbert, a Democracy Advocate for U.S. PIRG.
Things in the world of campaign finance are getting, as Alice said, “curiouser and curiouser!”
As a nation, we have officially ventured down the rabbit hole of big corporate spending in political campaigns, as a Texas company recently placed the first campaign ad paid for solely by corporate profits. This ad comes as a direct result of the January 21 Supreme Court decision in Citizens United vs. Federal Election Commission which ruled that corporations are “persons” and therefore have as much of a right to spend their money advocating for candidates as you and I.
When KDR Development placed an ad against state Rep. Chuck Hopson (R-TX), and paid for it directly from its company coffers, it gave our country the first glimpse of what many expect to be a landslide of corporate spending in elections. As Fred Wertheimer, veteran campaign finance reformer, testified before the Senate Rules Committee in February, “the 5 to 4 Supreme Court decision in the Citizens United case is the most radical and destructive campaign finance decision in the Court’s history.”
Congress is now actively engaged in looking for ways to address the problems the Supreme Court’s opinion created. We need a solution – and fast – to protect the upcoming midterm election from being bought and sold by corporate interests.
One critical component of any legislative solution needs to be shareholder approval.
The massive profits generated by corporations happen in part through investments by their shareholders. Now that corporations have been given the right to freely spend those investments in elections, they should also be required to disclose their political spending to their shareholders, and shareholders should be granted the right to consent or oppose that political spending through a vote.
Investing has expanded over the past few decades, and at this point nearly half of American households own stocks. So when we talk about protecting shareholders and giving them a say in how their money is spent, we are literally talking about a vast subset of the public, not some elite class.
Shareholder approval is a reform angle which could begin to dig us out of Alice’s rabbit hole and protect our democracy. Justice Kennedy himself wrote, “shareholder objections raised through the procedures of corporate democracy, can be more effective today because modern technology makes disclosures rapid and informative.”
The Shareholder Protection Act (H.R. 4790), introduced by Rep. Mike Capuano (D-MA), would require 51 percent of shareholders to sign off on corporate political spending; we urge Congress to include this bill in the upcoming leadership reform package expected to introduced after recess.
When a CEO chooses to use corporate money to support causes which may be antithetical to a given shareholder’s wishes, in essence he or she is violating the shareholder’s First Amendment rights. Curious…especially in light of the first amendment principles the Supreme Court claimed to defend with their Citizens United decision.
Congress needs to reclaim a First Amendment which was not created to protect corporations, and work to ensure the protection of the rights of individual citizens. If we don’t pass strong legislation and do it quickly, our democracy is going to continue to go down the rabbit hole, and words much stronger than “curious” will be needed to describe the state of affairs.