Letter from Michael Waldman, Executive Director of the Brennan Center
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Dear Speaker Pelosi,
The Brennan Center for Justice at New York University School of Law writes to you to respectfully encourage a floor vote on the Shareholder Protection Act of 2010 (H.R. 4790).
This bill was introduced by Rep. Michael Capuano (D-MA) earlier this year, is strongly supported by Rep. Barney Frank (D-MA), and passed through the Financial Services Committee on July 29, 2010 with strong support from the Committee by a 35 to 28 vote.
As you know, in Citizens United vs. FEC the U.S. Supreme Court ruled that corporations have the right to spend unlimited funds from their profits to support or attack candidates. This has already begun to reshape politics. (See today’s New York Times story, “G.O.P. Allies Drive Ad Spending Disparity”).
The nation’s corporate and securities laws need to catch up with the new Citizens United world for publicly-traded corporations. Current laws contain no corporate governance procedures established to ensure that shareholders – those who actually own the corporations – are informed of, or have the right to approve, decisions to spend corporate treasury funds on election campaigns.
The Shareholder Protection Act creates a sensible framework to give shareholders a meaningful say about corporate political spending. It provides for prior approval by shareholders for an annual political expenditure budget chosen by the management for a publicly held corporation. Similar shareholder protection rules have worked well in the United Kingdom since 2000.
A poll by People for the American Way earlier this year found strong support for post-Citizens United reforms. Specifically, 75% of Americans believe that a publicly-traded company should get shareholder approval before spending money in an election.
The House took a strong first step in passing the DISCLOSE Act. The Shareholder Protection Act is a practical and badly needed next response to Citizens United. This is a common-sense, simple reform with real appeal to the American people – one that will continue strong efforts to defend our democracy.
If you or your staff have any questions about this legislation, please contact Brennan Center Counsel, Ciara Torres-Spelliscy.
Sincerely,
Michael Waldman
Executive Director
Brennan Center for Justice
at New York University School of Law