New Court Case Seeks SEC Political Disclosure Rules

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By Kenneth P. Doyle

Feb. 8 — A new federal appeals court case has been filed calling for the Securities and Exchange Commission to issue a rule requiring corporations to disclose political spending.

The nonprofit Campaign for Accountability said it filed a petition Feb. 8 in the U.S. Court of Appeals for the District of Columbia Circuit calling for the new SEC disclosure rule. The petition was filed on behalf of activist investor Stephen Silberstein.

It was the latest in a series of court actions filed in an effort—thus far unsuccessful—to persuade the SEC to pay more attention to the disclosure of political spending.

The SEC has hinted in past years that it might adopt a new rule to require publicly traded companies to disclose political spending not revealed under existing campaign finance rules. However, disclosure proposals have faced fierce resistance from business groups and Republicans in Congress. More recently, the SEC has indicated it has no immediate plans to write a new disclosure rule .

‘Dark Money.'

The Campaign for Accountability was launched as a new watchdog organization last year “to expose misconduct and malfeasance in public life.” The organization is headed by Anne Weismann, who previously served as counsel for the nonprofit Citizens for Responsibility and Ethics in Washington (CREW). The Campaign for Accountability does not disclose donors funding its operations, according to its spokesman, Daniel Stevens.

“With billions of dollars flowing into the presidential election, shareholders deserve to know how the companies they own are spending corporate funds,” Weismann said in a statement announcing the latest court action. “Despite overwhelming public support, the SEC has refused to shed a light on how much money corporations have contributed to ‘dark money’ groups and other political organizations.”

The Campaign for Accountability court petition asked the court to order the SEC to propose a rule requiring corporations to disclose to shareholders and the public their use of corporate funds for political activities.

In a 2013 regulatory agenda, the SEC Division of Corporation Finance said it would consider whether the agency should issue a rule regarding the disclosure of political spending. In 2014, Silberstein submitted a petition to the SEC requesting the agency to require public companies to disclose their political activities, which the SEC ignored, according to the Campaign for Accountability.

Previous Cases Dismissed

Last month, a federal district court dismissed a lawsuit on behalf of Silberstein filed by the Campaign for Accountability, which sought to force the SEC to enact a regulation requiring corporate disclosure. The suit alleged that the SEC violated the Administrative Procedure Act by failing to act on Silberstein’s 2014 petition to the SEC. The case was dismissed by Judge Rosemary Collyer of the U.S. District Court for the District of Columbia, who held that only the U.S. Court of Appeals for the District of Columbia Circuit had jurisdiction over the issue .

In a separate but related case decided last year, a federal judge in New York dismissed a lawsuit alleging that insurance giant Aetna Inc. violated federal securities law by withholding from shareholders information about the company's political contributions . The suit was filed on behalf of Silberstein by CREW.

The suit charged that Aetna failed to disclose to shareholders its contributions to groups spending money to influence campaigns, despite pledges to reveal its political spending.

Aetna Suit Cited $7 Million

The suit cited information about Aetna contributions to tax-exempt groups involved in campaign spending, including more than $7 million provided in 2011 to the U.S. Chamber of Commerce, the nation's biggest business lobby, and American Action Network (AAN), a conservative nonprofit. Both the Chamber and the AAN have spent millions of dollars in recent years on political ads favoring Republicans and attacking Democrats.

Granting Aetna's motion to dismiss the case, the judge said in a 29-page ruling handed down March 26 that information about Aetna's political contributions had been widely reported by 2013 and was even discussed in a company proxy statement that year. The statement sought to dissuade voters from adopting a shareholder proposal to require greater disclosure of Aetna's political spending.

When the case against Aetna was filed in 2013, the then-director of CREW, Melanie Sloan, said it was the first case of its kind. In the wake of the 2010 Supreme Court ruling in Citizens United v. Federal Election Commission, which struck long-standing restrictions on corporate political spending, supporters of campaign finance regulation have pushed unsuccessfully for greater disclosure of such spending through legislation, regulation and court action.

To contact the reporter on this story: Kenneth P. Doyle in Washington at

To contact the editor responsible for this story: Heather Rothman at

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