It’s a brave new world of corporate power, thanks to the Supreme Court’s Citizens United vs. Federal Election Commission decision, and corporations, in their newly clarified role as “persons,” are gearing up to spend their profits freely in federal elections.
However, since the massive profits generated by corporations happen in part as a result of investments approved of by their shareholders, the new “license to spend” that corporations have been given by the Supreme Court raises several important questions.
Should shareholders have a say on whether or not their money is used for political purposes? And, should shareholders be informed of the use of their investments for political spending?
I believe that the answer to both questions is definitively “yes,” and that the Shareholder Protection Act (H.R. 4537), legislation recently introduced by Rep. Mike Capuano (D-MA), is an important component of the critical legislative reaction to the Citizens United opinion.
The potential for increased corporate spending to flood our elections system in the wake of the decision presents real risks – both to American democracy and to shareholders.
And because investing has expanded over the past few decades – today, nearly one in every two American households owns stocks – when we talk about giving shareholders a say in how their money is spent, we are literally talking about the public, not an elite class of investors. Unchecked corporate political spending is a threat to two key shareholder rights.
First, the right to a fair return on their investment, and secondly (and most ironically in the context of Citizens United), the first amendment right to remain silent in political debate or to support a candidate of their choosing. When a CEO chooses to use corporate money to support causes which may be antithetical to a given shareholder’s wishes, in essence he or she is violating the shareholder’s first amendment rights.
Rep. Capuano’s Shareholder Protection Act is a key component of a wider solutions package to correct the Supreme Court’s decision that Rep. Chris Van Hollen (D-MD) is planning to introduce. (See my previous column for details.) The Capuano bill will have a hearing next week, and will help stress the point that shareholders should have the right to approve corporate spending.
The idea that U.S. corporations can make unlimited political expenditures without giving its shareholders any knowledge of the spending or receiving their consent is an appalling one. Congress should quickly support Rep. Capuano’s Shareholder Protection Act and work to attach it to Rep. Van Hollen legislative package, two pieces of legislation that are very clearly in the public interest.
We need to create a world where no one will ever have to wonder if their invested money is supporting a cause they don’t believe in. The Shareholder Protection Act takes us one step in that direction.
By Lisa Gilbert, U.S. Public Interest Research Group (U.S. PIRG) Democracy Advocate,In the Public Interest, Huffington Post blog column
