Which checkbook?

Much of corporate money enters the political fray cloaked by intermediaries such as trade associations, the ultimate black box.  The company doesn’t have to tell shareholders they are paying for politics through a trade association and the trade associations have jealously guarded the names of their corporate donors.  Thus, when ads appear during election season brought to you by the Chamber of Commerce or the National Association of Manufacturers, voters and shareholders are equally in the dark about where the money for that ad really came from.

This needs to change.  Rights often are paired with responsibilities. Citizens United gave corporate managers the right to spend corporate treasury funds on politics.  Or in other words, to use the corporate checks to pay for electioneering.  But with that right, comes the responsibility to be transparent to the company’s true owners: its shareholders.

This is why two pieces of legislation in Congress are absolutely critical for the post-Citizens United world: (1)  The Schumer Van Hollen DISCLOSE Act would require more transparency of who funds political ads by requiring disclaimers to clearly state the sponsor and the sponsor’s top five donors, as well as requiring more fulsome reporting from trade associations and other nonprofits that are bankrolling political ads.  (2) The Shareholder Protection Act would require not only notice from companies to shareholders of political spending, but also board and shareholder approval of future corporate political expenditures.

Combined, these two measures would ensure during the Midterm elections, if a CEO pays for political ads with a corporate checkbook instead of his own, that everyone from voters to investors, knows it.

Ciara Torres-Spelliscy is an attorney at the Brennan Center for Justice at NYU School of Law and the author of Corporate Campaign Spending: Giving Shareholders a Voice.