WASHINGTON, Jan. 9 (UPI) -- A battle is brewing over the U.S. Securities and Exchange Commission's decision to consider a new disclosure rule on firms' political spending, observers say.
If approved, the regulation could require all publicly traded companies to spell out how much money they allot for political activities, providing the fullest picture yet of how involved corporate America has become in politics since the 2010 U.S. Supreme Court ruling making it legal for corporations to spend virtually unlimited sums on independent political activity, the Los Angeles Times reported Tuesday.
While opposed by many in the business community, the SEC's action is favored not only by campaign finance reform advocates but also shareholders and institutional investors who say they believe good corporate governance dictates an accounting of how much money is spent on politics and whether it is in a corporation's interest, the Times said.
"As an institutional investor, you take a look at the decline in transparency surrounding this, and it gets really hairy for people putting money into publicly traded securities," Pennsylvania Treasurer Rob McCord, a Democrat, said Tuesday in a conference call organized by the Corporate Reform Coalition. "You can't account for how much money is being spent on politics, and why."
In opposing the potential rule, the U.S. Chamber of Commerce and others argue, among other things, the SEC lacks authority to issue such a regulation and that political spending isn't material to a company's bottom line.