IRS Controversy Does Not Diminish Need for Fair and Balanced Disclosure of Corporate Political Spending

The Securities and Exchange Commission (SEC) needs to continue pursuing its impartial approach to opening up the books on corporate political spending, regardless of Congress members' fallacious attempts to use the IRS scandal to delegitimize the movement for disclosure rules. Several members of the House Financial Services Committee questioned Mary Jo White, SEC chair, about the commission's pending rulemaking for transparency of corporate political spending in light of the IRS controversy.

"The IRS controversy is about partisanship, not disclosure. Tying the IRS's problems to the SEC rulemaking on corporate political spending is the height of political theater," said Lisa Gilbert, director of Public Citizen's Congress Watch division. "The massive outpouring of support from investors who want material political spending information continues to stream in at the agency, and the SEC owes it to the constituency they oversee - investors - to move forward with this critical rulemaking for investor protection."

Craig Holman, government affairs lobbyist for Public Citizen's Congress Watch division, added, "The real issue with the IRS controversy is whether the agency was enforcing the tax code in a partisan, discriminatory manner, not whether electioneering nonprofit organizations should disclose the sources of their campaign funds. It is the exact opposite with the SEC petition for rulemaking for disclosure of campaign spending by public corporations. The SEC issue is all about disclosure, not partisanship."

Gilbert added, "We think that the very fact that the SEC placed the rule on its regulatory flexibility agenda, that the staff is reviewing it, and that the SEC has issued similar pay-to-play rules before, all speak to the necessity and jurisdiction of the agency around this topic."