Provided Congress allows, [the SEC] will determine the winner in the long-running battle over whether publicly traded companies should reveal their currently hidden political contributions, known as “dark money.”
Stockholders have long been agitating that the companies they own improve the transparency of their political spending. This is often done through shareholder resolutions, which are a bit like ballot questions, to require companies disclose their spending on campaigns and lobbying. In part as a result of these efforts, more than half of the S&P 500 have agreed to be open about their political activities. They now share information that would otherwise be opaque and untraceable, including money flowing through dark money trade associations and so-called social welfare organizations, such as Crossroads GPS, the conservative group founded by George W. Bush operative Karl Rove.
But the trend toward transparency is still being met with resistance. Goldman Sachs wrote to the SEC in December to block its shareholders from voting on a lobbying disclosure proposal in part because the amount of money at issue “relates to operations that account for less than five percent of the Company’s assets.” The shareholders withdrew their proposal.
Ford Motor Company also complained to the SEC that two shareholder proposals (one on lobbying and one on electoral spending) were duplicative and that the latter should be excluded from Ford’s annual proxy.
Fortunately, last week the SEC rejected Ford’s argument allowing both proxy votes to move forward.The SEC’s stance with Ford is a welcome change from last year’s alarming decision which blocked a proxy question at ExxonMobil to disclose campaign spending because there was another to reveal how much money was spent on lobbying. At least in the view of the SEC back then, the two questions were “substantially duplicative,” as if disclosing lobbying spending was the equivalent of disclosing campaign spending.