Citing their "fence-sitting" on the crucial question of whether to force corporations to reveal their political spending, top Senate Democrats on Thursday stalled a Banking Committee vote to confirm the two nominees to join the Securities and Exchange Commission (SEC).
Proponents say such a disclosure rule is necessary in the wake of the Supreme Court's 2010 decision in Citizens United, which unleashed unlimited spending into the U.S. political system. The SEC is in a unique position, they say, if not to get corporate money out of politics altogether, then at least to help shine a light on how corporate dollars are spent directly or indirectly to impact elections and influence policy.
According to Reuters on Thursday, "The resistance posed by Charles Schumer of New York, Robert Menendez of New Jersey, Jeff Merkley of Oregon, and Elizabeth Warren of Massachusetts, led to procedural confusion and the Republican Committee Chairman, Richard Shelby of Alabama, decided to delay the vote."
As the Wall Street Journal reported at the time:
Both Ms. Peirce and Ms. Fairfax, who were nominated by President Barack Obama last fall, resisted taking a clear position on the thorny issue of forcing public companies to report their political spending. Senate Democrats have pushed SEC Chairman Mary Jo White to begin drafting a rule that would require the disclosure, while Republicans say the amounts are immaterial and shouldn’t have to be disclosed.
“I think there is certainly an argument to be made that it is material,” Ms. Fairfax said. Ms. Peirce said she would want to read the details of any disclosure requirement before taking a position.
Sen. Charles Schumer (D., N.Y.) later warned the two lawyers he was “leaning against both of your nominations” because their answers weren’t straightforward enough for his liking.
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Added Menendez in a press release on Thursday:
Within the past month, both during and after the Committee's nomination hearing, I asked both SEC nominees for assurances that they understand the value of this important disclosure to shareholders. After hearing and reading their responses, I remain concerned that if these two nominees are confirmed, the SEC will continue to obfuscate on this critical policy matter for investors.
In a letter (pdf) to SEC chair Mary Jo White last year, 44 Democrats including Warren, Merkley, Menendez, and Schumer said that requiring public companies to disclose how they use company resources for political activities would "bring much needed accountability to shareholders and transparency to corporate political spending." Only 2.2 percent of all public companies in the U.S. do so, the letter noted, "and they do so voluntarily."
Not doing so, Warren told reporters on a call in January, is "fundamentally wrong," as "it creates an elite that can use investors' money to promote their own political preferences."
Following Thursday's development, the director of Public Citizen's Congress Watch Division said the message to the SEC nominees "is loud and clear: the SEC must issue a rule requiring disclosure of corporate political spending."
Public Citizen's Lisa Gilbert urged "the banking committee Democrats to continue to question both Peirce and Fairfax on the critical need for this rule and to make it an issue throughout the confirmation process."
More than 1.2 million people have submitted public comments to the SEC calling for a rule requiring publicly held companies to disclose details of their political spending.