Companies and Political Contributions
Friday, April 26, 2013
Publicly traded companies may soon be required to disclose political donations if the Security and Exchange Commission accepts the arguments from investors, elected officials and several corporate and securities law experts.
The SEC could make a decision as early as this month to change the rule, posing the first real test for Mary Jo White who was recently confirmed as chairwoman of the committee.
This week on Money Talking, contributors Rana Foroohar of Time magazine and Joe Nocera of the New York Times discuss whether such a change would be good for business or if it's simply politics at play.
Advocates of the disclosure say corporations should not be able to hide political donations from their shareholders. But opponents say the disclosure requirement is a bad idea. David Primo, a political science professor at the University of Rochester, told WNYC’s The Takeaway that corporate political spending does not pose any additional risk to a company beyond its day-to-day business.
Opponents also fear the rule will scare corporations from exercising their right to make political donations. “It could actually hurt shareholders if it leads to activism against corporations,” said Primo.
Some companies already disclose their political spending. Activist shareholders, especially those entrusted with public pensions like New York’s Comptroller Tom DiNapoli, have been successful in getting companies to disclose their political spending even in the absence of any federal rule.
Looking ahead, Foroohar is watching for the possibility of another bubble in the real estate market, in this case, the commercial market. And Nocera is watching if states that approved the sale of marijuana will begin taxing it like cigarettes.