Tag Archive for ‘Citizens United’
In the 2012 campaign cycle an astounding $6 billion dollars was spent, with American corporations contributing roughly one third of that total. Just as political pundits are assessing the aftermath of the campaigns, a public affairs adviser for big companies suggests that it’s time for corporate America to take a hard look at the return on its investment.
The emergence of nonprofits as the leading conduit for anonymous spending in this year’s presidential campaign is often attributed to the Supreme Court’s 2010 Citizens United ruling. But a closer look shows that there are several reasons that tens of millions of dollars of secret money are flooding this year’s campaign.
News organizations generally cultivate a reputation for demanding transparency. But now many of the U.S.’s biggest media companies – which own dozens of newspapers and TV news operations – are flexing their muscle in Washington in a fight against a government initiative to increase transparency of political spending.
Corporate governance activist Robert AG Monks argues that American corporations today are like the great European monarchies of long ago. “Corporations have effectively captured the United States: its judiciary, its political system, and its national wealth, without assuming any of the responsibilities of dominion,” he writes. “Evidence is everywhere.”
While the Supreme Court in Citizens United envisioned a world where shareholders could hold managers accountable for political spending, corporations have clever legal ways to hide their role in politics from the public. Over the past few weeks, a growing consensus among shareholders, corporate leaders and corporate law experts has emerged. All are urging increased transparency for corporate money in politics.
The authors of a new research paper say the Supreme Court’s 2010 Citizens United decision to permit corporations to spend unlimited sums to influence federal elections was premised on two yet-unfulfilled promises: Corporations would disclose their expenditures, and shareholders would be able to police such spending. Action by the SEC to require disclosure, they argue, might now “prove to be a favor” to businesses – and actually increase corporate valuations.
The Shareholder Protection Act, introduced today in the U.S. Congress, addresses governance problems left in the wake of the Supreme Court’s 2010 decision in Citizens United, which enables corporations to spend an unlimited amount of money on political advertising. The bill is modeled on the U.K. Companies Act, which requires prior shareholder approval of corporate political donations.
The proposal by NorthStar Asset Management, a Boston money manager, requested that the company annually report on its political policies and contributions, disclose future anticipated spending, and provide an analysis of how such spending matches company values or policy. Although the measure was defeated, it is considered to be a template for similar proposals at other corporate annual meetings.
The Supreme Court heard oral arguments on a case between AT&T and the Federal Communications Commission, revisiting the legal concept of “corporate personhood” last strengthened under the court’s Citizen United ruling on corporate campaign spending. (That controversial ruling has its first anniversary this week.)
A constitutional law expert says the U.S. Supreme Court ‘s January ruling in the Citizens United campaign spending case raises a host of corporate governance issues that should be addressed by legislation before the 2012 Presidential election. “One of the reasons that this is such an objectionable decision,” she argues, “is it allows corporate managers in publicly traded companies to spend what Justice Brandeis called ‘other people’s money.’”