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The following editorial appeared recently in the Seattle Times.
The Securities and Exchange Commission is considering a rule to require public-reporting companies to disclose their political contributions. The American political system needs such a rule.
Since the Supreme Court's Citizens United decision, companies have been free to spend money in politics without limit, though not directly to federal candidates. Many companies have donated through trade associations and front groups, putting the intermediary groups in the spotlight while the companies remain in the shadows.
This is dishonest. When an interested party is spending big money to reach voters, those voters need to know who is speaking to them.
Shareholder advocates have been pushing companies to disclose contributions, and some companies have agreed to do it. Boeing now says it has a policy "to prohibit trade associations and other third-party organizations from using Boeing's funds for any election-related political expenditure." That is a good policy.
More than half the Fortune 100 companies have adopted some kind of disclosure policy, says Bruce Herbert, chief executive of Investor Voice, a social-purpose company.
It is time to make disclosure a requirement for all public companies.
The objection to this is that the SEC exists to protect investors, not voters, and that political spending is too small to affect stock values. Maybe it is, but investors are also owners.
If the owners of a company want to know what political causes it supports, it ought to tell them, because it is their company. People want to know. They want to know what their company is saying, and what other companies are saying to them.
The SEC has been compelling corporate disclosure for almost 80 years. It has the power to do this, and it should do it.