Senate and House Democrats have brought forward a revised proposal that would mandate that shareholders are notified of and approve any spending of corporate money towards political spending. The Shareholder Protection Act of 2011, which was introduced by Rep. Mike Capuano (D-Mass.) and Sen. Robert Menendez (D-N.J.), will hopefully curb unaccountable political spending by company executives, while giving shareholders a say in whether a company should get involved in electoral politics.<\/p>\n
Prior to 2010, corporations weren\u2019t allowed to spend on federal campaigns\u2014that is, until the US Supreme Court ruled last year that they could give money to non-profit groups with issue-based advertising. The decision, in Citizens United v. Federal Election Commission<\/em>, worried many Democrats because that kind of spending is protected from public disclosure laws dealing with campaign contributions. (Prior to that there was the legislature known as the DISCLOSE ACT, which Congress blocked in 2010. The DISCLOSE ACT mandated that there be more disclosure regarding union and corporate money that is given to outside organizations for political purposes.<\/p>\n Per this new measure, companies that want to put money into campaigns would have to get shareholders to approve a budget for this. A corporation\u2019s board of directors would have to approve expenditures greater than $50,000 and these would have to be publicly disclosed. Payments to outside organizations for political purposes would also have to be disclosed.<\/p>\n The bill also covers spending for:<\/strong> Melendez, who served as Democratic Senatorial Campaign Committee chairman, said that he considers it \u201cfundamentally wrong\u201d for corporations to influence elections and be able to make decisions about our nation\u2019s policies. He said that during his time as chair, he saw corporate funding of about $70 million to combat candidates that he supported.<\/p>\n It does not appear likely that Republicans and campaign finance regulation opponents will back this new proposal. Center for Competitive Politics President Sean Parnell has said that with its \u201cregulations on their political speech,\u201d the Shareholder Protection Act is a \u201cthinly disguised effort to silence the business community.\u201d He called the bill an attack on the First Amendment and wants Congress to reject it.<\/p>\n Citizens United v. Federal Election Commission<\/em><\/strong> Citizens United v. Federal Election Commission<\/em> overruled two precedents. McConnell v. Federal Election Commission<\/em> upheld the portion of the Bipartisan Campaign Reform Act of 2002 (it limits union and corporate campaign spending) and Austin v. Michigan Chamber of Commerce<\/em> upheld limits on corporate spending directed at either opposing or supporting a political candidate.<\/p>\n Our institutional investment fraud lawyers<\/a> work hard to help our clients, who have suffered financial losses because of misconduct by Wall Street firms and\/or their their employees get their money back. Unfortunately, it is the investors who end up suffering because of broker misconduct<\/a>.<\/p>\n Related Web Resources:<\/strong><\/p>\n Justices, 5-4, Reject Corporate Spending Limit<\/a>, NY Times, January 21, 2010<\/p>\n Citizens United v. Federal Election Commission <\/a>(PDF) Dodd-Frank Reforms Will Lower Deficit by $3.2B Over the Next Decade, Estimates CBO, Institutional Investor Securities Blog, April 8, 2011<\/p>\n
\n\u2022 \u201cElectioneering communications\u201d involving a federal candidate.
\n\u2022 Messages directly calling for a vote for or against a candidate.<\/p>\n
\nIn a 5-4 decision, the Supreme Court ruled that the government is not allowed to ban corporations from engaging in political spending in candidate elections and that to do so is a regulation of political speech and free speech. President Barack Obama said the Supreme Court\u2019s decision was a victory for Wall Street firms, oil companies, health insurance companies and other powerful interests.<\/p>\n
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\nH.R. 2517: Shareholder Protection Act of 2011<\/a>, GovTrack<\/p>\n
\nMore Blog Posts:<\/strong>
\nSecurities Lawsuits Expected to Reach Record High in \u201911, Says Advisen Ltd. Report<\/a>, Institutional Investor Securities Blog, April 23, 2011<\/p>\n