[EL] ³Petition for Disclosure on Political Spending Gains Support²

Wed Nov 13 19:24:40 PST 2013

Thank you for the shout out, Kurt.  

A few things might be of interest if you don’t have the time for a full law review on what the SEC has already done in the realm of money in politics:

First I would remind the list that investors have been commenting at the SEC.  Statistically one out of every two American households is invested whether directly in individual stocks or indirectly through their pension or 401(k).  

If you want to look at all the comments at the SEC on the petition for a new rule on transparency of corporate political spending they are here: http://www.sec.gov/comments/4-637/4-637.shtml. In particular, this comment is from elected officials who invest roughly $1 trillion in public pension funds: http://www.sec.gov/comments/4-637/4637-84.pdf.  This comment is from investors with $690 billion under management: http://www.sec.gov/comments/4-637/4637-11.pdf.  This one is from John Bogle who founded Vanguard: http://www.sec.gov/comments/4-637/4637-22.pdf. 

Of possible interest to students, I made an interactive graphic timeline of the SEC’s regulations of money in politics with the help of the Sunlight Foundation that is available here: http://sunlightfoundation.com/blog/2013/06/17/the-sec-and-dark-political-money/

If you are unaware of the scope of the illegal corporate political funds uncovered by the SEC in the 1970s, here is the report from the SEC to Congress on its post-Watergate investigation of questionable and illegal payments by Corporations: http://www.sec.gov/spotlight/fcpa/sec-report-questionable-illegal-corporate-payments-practices-1976.pdf. It was this investigation that led to the Foreign Corrupt Practices Act. 

And the Blount v. SEC case from 1995 where the D.C. Circuit upholds the SEC’s power to regulate pay to play in the municipal bond market is always a good read: http://scholar.google.com/scholar_case?case=14899047487846550890&hl=en&as_sdt=6&as_vis=1&oi=scholar.  

Ciao,
Ciara

Ciara Torres-Spelliscy
--------------------------------------------------
View my research on my SSRN Author page:
http://ssrn.com/author=584767
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________________________________________
From: law-election-bounces at department-lists.uci.edu [law-election-bounces at department-lists.uci.edu] on behalf of Kurt Walters [kwalters at campaignmoney.org]
Sent: Wednesday, November 13, 2013 12:19 PM
To: Smith, Brad; law-election at uci.edu
Subject: Re: [EL] ³Petition for Disclosure on Political Spending Gains Support²

Perhaps she could speak more knowledgeably about the subject than I can,
but Ciara Torres-Spelliscy has an excellent law journal article entitled
"Safeguarding Markets from Pernicious Pay to Play: A Model Explaining Why
the SEC Regulates Money in Politics"
(http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2184554) on SSRN that
responds to this idea, citing previous examples of the SEC regulating
money in politics and curbing pay-to-play.

The first paragraph of the abstract:
"At first blush, the SEC¹s regulation of money in politics may seem to
fall outside of its jurisdiction, but this is a mistake.  This view
ignores three previous times when the SEC stepped in to curb pay to play:
(1) in the municipal bond market in 1994; (2) in the public pension fund
market in 2010; and (3) in investigating questionable payments
post-Watergate from 1974 to 1977.  The result of the first two
interventions led to new Commission rules and the third intervention
resulted in the Foreign Corrupt Practices Act (a federal statute)."

----
Kurt Walters

Research & Policy Analyst
Public Campaign Action Fund
(202) 640-5598
kwalters at campaignmoney.org

On 11/13/13 11:15 AM, "Smith, Brad" <BSmith at law.capital.edu> wrote:

>Allen Dickerson and I address the issue from an administrative law
>perspective in the Harvard Business Law Review:
>http://www.hblr.org/wp-content/uploads/2013/10/HLB208_crop.pdf. It's part
>of a very good symposium on corporate political spending.
>
>As Craig's post indicates, this is part of an effort to get the SEC
>further involved in regulating campaign finance, something beyond both
>its mission and its expertise. That's what our article, "The Non-Expert
>Agency," addresses.
>
>Bradley A. Smith
>
>Josiah H. Blackmore II/Shirley M. Nault
>
>   Professor of Law
>
>Capital University Law School
>
>303 E. Broad St.
>
>Columbus, OH 43215
>
>614.236.6317
>
>http://law.capital.edu/faculty/bios/bsmith.aspx
>
>________________________________________
>From: law-election-bounces at department-lists.uci.edu
>[law-election-bounces at department-lists.uci.edu] on behalf of Craig Holman
>[holman at aol.com]
>Sent: Wednesday, November 13, 2013 10:22 AM
>To: joseph.e.larue at gmail.com; law-election at uci.edu; rhasen at law.uci.edu
>Subject: Re: [EL] ³Petition for Disclosure on Political Spending Gains
>Support²
>
>Through deregulation and lack of enforcement, very little is left of what
>by all rights should be a very robust transparency law established by
>BCRA.
>
>The law itself is quite clear that the sources of funds behind campaign
>ads are subject to disclosure. Section 201 of BCRA, for example, lays out
>the disclosure requirements for groups funding electioneering
>communications. BCRA clearly states that all major donors to the person
>making the electioneering communication must be disclosed, not just those
>who contributed for a campaign ad. The provision reads in part: ³Every
>person who makes a disbursement for the direct costs of producing and
>airing electioneering communications in an aggregate amount in excess of
>$10,000 during any calendar year shall, within 24 hours of each
>disclosure date, file with the Commission a statement containing . . .
>the names and addresses of all contributors who contributed an aggregate
>amount of $1,000 or more to the person making the disbursement during the
>period beginning on the first day of the preceding calendar year and
>ending on the disclosure date.
>
>The FEC altered its disclosure regulation interpreting the law at the end
>of 2007 requiring an entity that makes electioneering communications to
>disclose ³the name and address of each person who made a donation
>aggregating $1,000 or more to the corporation or labor organization,
>aggregating since the first day of the preceding calendar year, which was
>made for the purpose of furthering electioneering communications.² BCRA
>makes no such exception.
>
>As a result, this language has recently been interpreted by a growing
>number of outside groups to mean that only those donors who specifically
>³earmark² funds for a campaign ad need be disclosed -- which has meant a
>dramatic fall in donor disclosure from nearly 100% donor disclosure in
>2004 and 2006 to about half that today. This requirement that only donors
>who earmark their funds for campaign ads has been extended by the FEC to
>independent expenditures as well as electioneering communications. The
>public (and shareholders, unless a corporation has its own internal
>voluntary disclosure rules) is now left in the dark as to who is funding
>the groups that sponsor electioneering communications and independent
>expenditures.
>
>It is largely suspected -- though it cannot be documented because of the
>lack of disclosure -- that most of this "dark money" comes from corporate
>treasury accounts.
>
>The petition before the SEC requests rulemaking to establish transparency
>for shareholders as to how a corporation's CEO is spending their money on
>electioneering communications and independent expenditures funneled
>through outside groups as well as contributions to lobbying campaigns.
>
>
>
>Craig Holman, Ph.D.
>Government Affairs Lobbyist
>Public Citizen
>215 Pennsylvania Avenue SE
>Washington, D.C. 20003
>T-(202) 454-5182
>C-(202) 905-7413
>F-(202) 547-7392
>Holman at aol.com
>
>
>-----Original Message-----
>From: Joe La Rue <joseph.e.larue at gmail.com>
>To: law-election <law-election at uci.edu>; Rick Hasen <rhasen at law.uci.edu>
>Sent: Wed, Nov 13, 2013 7:06 am
>Subject: [EL] ³Petition for Disclosure on Political Spending Gains
>Support²
>
>Regarding this:
>
>³Petition for Disclosure on Political Spending Gains
>Support²<http://electionlawblog.org/?p=56699>
>Posted on November 12, 2013 8:34 pm<http://electionlawblog.org/?p=56699>
>by Rick Hasen<http://electionlawblog.org/?author=3>
>WSJ
>reports.<http://blogs.wsj.com/cfo/2013/11/12/petition-for-disclosure-on-po
>litical-spending-gains-support/>
>
>I'm confused.  Don't corporations already have to disclose their
>independent expenditures, the same as everyone else?  I'm not sure that
>it's always "voluntarily," as the author says.  But it is done, isn't it?
> And, if so, what's the point of this proposal, other than more
>regulation and more hoops for those who want to engage in political
>speech to jump through?  Am I missing something?
>
>Joe
>___________________
>Joseph E. La Rue
>cell: 480.272.2715
>email: joseph.e.larue at gmail.com<mailto:joseph.e.larue at gmail.com>
>
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