Mary Jo White, the new Chair of the U.S. Securities and Exchange Commission, was recently confirmed to a five-year term that secures her position until 2019. With that kind of job security, Ms. White should be able to rise above the partisan pressures of Washington politics and advance a proactive agenda at the SEC that furthers its mission of protecting investors and promoting transparent, well-functioning markets.
But already, Chair White’s resolve is being put to the test through the debate on a proposed SEC rule that would require disclosure of public companies’ political spending.
This petition for rule-making, which has gathered more than half a million public comments in support (more than any other petition in SEC history), was placed on the SEC’s agenda at the beginning of this year. But after meeting with stiff opposition from big business trade groups led by the U.S. Chamber of Commerce, the proposed rule has yet to be acted on by the SEC.
On August 20, small business leaders from across the country injected new life into this debate with a letter to Chair White urging the SEC to move forward with the disclosure rule. The letter, signed by leaders of state and local small business groups across the Main Street Alliance network, makes a strong business case for the political spending disclosure rule.
In the letter, the small business leaders wrote:
Consider this: as owners of small businesses, if money from our business accounts is used for political spending, we’d better well know about it. Indeed, it would be a sign of dangerously poor management on our part if we did not. And yet under current practice corporate funds can be spent in exactly this way, without the owners’ knowledge, at many of the largest publicly-traded companies in America.
While making a compelling small business case for action by the SEC, the business leaders also noted that support for transparency in political spending crosses the divide between Main Street and Wall Street. Indeed, according to a recent survey sponsored by the Committee for Economic Development, more than 80 percent of business executives (large and small) support this type of transparency.
The small business letter closed by acknowledging the pressure the SEC faces from groups that engage in secret political spending, noting:
We assure you, these groups do not speak for local, independent small business owners across America or, for that matter, for the many corporate executives who believe success in business should have nothing to do with pay-to-play politics.
We sincerely hope you will not allow pressure from groups that benefit from maintaining a regime of secrecy to deter you from moving forward with a rule that allows the SEC to better fulfill its mission and responsibilities to protect investors and ensure market transparency.
As summer turns to fall, the question for Chair White, the SEC’s newly job-secure leader, is: will the SEC order a dose of sunlight that’s good for investors, good for market transparency, and good for honest businesses… or will it submit to the pressure from corporate lobby groups that benefit from secret spending and allow them to keep playing their political games in the dark?
Want to share your support for the political spending transparency rule with the SEC? Click here to submit a comment letter.
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