On the SEC Disclosure Rule, the People Have Spoken

September 4, 2014
Gretchen Goldman
Research Director, Center for Science & Democracy

One million comments. Today I’m celebrating one million comments.  What’s the significance of one million comments? Let me explain.

An SEC petition hits one million public comments

Back in January, UCS asked its supporters to comment in support of a petition to the U.S. Securities and Exchange Commission (SEC) asking the agency to require companies to better disclose their political activity.  Our  report, Tricks of the Trade, and prior work showed the alarming secretive influence that companies and their trade associations have on climate change policy action (and inaction). The SEC has the power to address this. In response, more than 19,370 UCS supporters submitted a comment to the SEC.  Today, those comments join many others to reach this significant milestone.

And it is significant. Never has the agency come close to receiving this much public interest in a rule. Proposed by a group of high-profile law professors in 2011, the ‘SEC disclosure rule’ would help address the wave of secret money flowing into our political system since the Supreme Court’s 2010 Citizens United decision. The Citizens United decision has given a new scale to the term “money in politics”—on the order of a staggering $6.3 billion in the 2012 election cycle. This affects our democracy in profound and concerning ways. With no limits on spending and no transparency for donors, money can influence our political system with no accountability for the forces behind it.

Since the Supreme Court's 2010 Citizens United decision, spending in elections, especially from dark money groups, has skyrocketed. Credit: Center for Responsive Politics/opensecrets.org

Since the Supreme Court’s 2010 Citizens United decision, spending in elections, especially from dark money groups, has skyrocketed. Credit: Center for Responsive Politics/opensecrets.org

From climate to chemicals: Secret money harms the public interest

This has serious consequences for evidence-based policy making. What happens when moneyed interests aren’t aligned with the public interest? We can get policy decisions that don’t protect the public. We’ve seen money trump evidence before—take climate change, drug safety, chemical regulation. In all these cases, public health and welfare has suffered when decisions protected profits rather than people, while those responsible for influencing the decision making away from the public interest can stay in the dark, with no accountability for their actions.

When our decision makers are debating tough issues, we should have an open dialogue. Citizens have a right to know who is influencing those decisions and what evidence is being considered. The SEC disclosure rule would require publicly traded companies to better disclose their political activities to the SEC. With such a rule in the place, the public and company investors would be able to see how companies spend their money on political activities, providing more accountability and transparency for those who stand to have big influence on our political system. (For a full primer on the impact of Citizens United and the SEC rule, see my past posts here, here, and here).

The million-comment question: Overwhelming support and a silent agency?

SEC Chairman Mary Jo White removed the corporate political disclosure rule from the agency's rulemaking agenda in 2013. Will one million comments encourage her to put it back on? Photo: U.S. SEC

SEC Chairman Mary Jo White removed the corporate political disclosure rule from the agency’s rulemaking agenda in 2013. Will one million comments encourage her to put it back on? Photo: U.S. SEC

If one million Americans are actively supporting a Securities and Exchange Commission rule, you know it’s an issue that affects us all. The people have spoken and they want a more transparent and accountable political system. Indeed, a press release from the Corporate Reform Coalition (of which UCS is a member) points out that polling shows that eight out of 10 Americans (81 percent) believe that corporations should only spend money on political campaigns if they disclose their spending immediately.

But will the SEC respond to this overwhelming and unprecedented support? Keep your ears to the ground to find out. The agency has been fairly quiet since it dropped the disclosure rule from its rulemaking agenda back in November 2013. This year in February, SEC Chairman Mary Jo White made vague reference to the rule in a SEC Speaks speech when she stated that the agency “will focus on making specific recommendations for updating the rules that govern public company disclosure.” But we’ve yet to see the commission prioritize the issue in an official way. Will this significant milestone change that? That is the million-comment question.