The Election and Corporate Governance: Political Contributions and the Role of the SEC

In the aftermath of the election, attention is likely to return to the need to impose greater transparency on corporate campaign contributions.  While Citizens United ruled out most types of substantive regulation, the case specifically approved an approach  premised around greater disclosure. 

The DISCLOSURE (‘‘Disclosure of Information on Spending on Campaigns Leads to Open and Secure Elections Act of 2012’’) Act, HR 4010, seeks to do this.  The premise of the legislation is that corporations (and other organizations such as unions) must file a report with the Federal Election Commission that discloses campaign contributions. Presumably, in the aftermath of the election, this provision will again return to the forefront. 

The SEC presumably has the regulatory authority to require disclosure of this information.  Moreover, there is a strong regulatory reason for the SEC to do so.  The DISCLOSURE 2012 ACT leaves execution of these requirements to the FEC, not the SEC.  In other words, congressional intervention would largely give control over the disclosure process to another agency.  This is not an appropriate outcome and perhaps explains stories floating around that the SEC is prepared to act in this area.