SEC Nominees Should Support Political Spending Transparency, Groups Say

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By Yin Wilczek

June 12 — Twenty-one organizations June 12 asked President Barack Obama to ensure that nominees to the Securities and Exchange Commission support rulemaking to require corporate political spending disclosures.

In a letter to the White House, the organizations—including Public Citizen, Citizens for Responsibility and Ethics in Washington and Greenpeace—observed that investors, former SEC chairs and commissioners, state treasurers, members of Congress and others have called for the requirements.

“Any qualified nominee to the agency should be in support of something so robustly requested by investors and in favor of moving this rulemaking forward,” they said. “We encourage the administration to use this regulation as a signpost for the quality of potential candidates.”

The term of SEC Commissioner Luis Aguilar, a Democrat, expired earlier this month, though he is expected to stay on until his replacement is named. Daniel Gallagher reportedly is resigning his post as a Republican member of the commission.

1.2 Million Comments

In the wake of Citizens United v. Federal Elections Commission, 558 U.S. 310, 2010 BL 15350, diverse groups—including institutional investors, private citizens and investor advocates—have pressed the SEC to require political spending and lobbying disclosures. A 2011 petition by a group of law professors asking for the disclosures has garnered more than 1.2 million comments, the overwhelming majority in support of the rulemaking. 

The commission also has been sued over its failure to promulgate rules on the issue. 

Democratic Outrage 

Most recently, Sen. Elizabeth Warren (D-Mass.) faulted SEC Chairman Mary Jo White for sidestepping Democrats' calls for the disclosures—a project White removed from the commission's regulatory agenda in November 2013.

Attorneys previously told Bloomberg BNA that with the current divided commission, rulemaking on political spending transparency is highly unlikely. However, they added that there may be more visibility on the matter during the 2016 election cycle.

Many of the organizations that wrote to the White House June 12 have been vocal on the need for the SEC to act.

In their letter, the organizations also criticized the SEC's revolving door, charging that Wall Street insiders moving “back and forth between financial firms” and the commission have created an agency whose decision-making is “biased toward the interests of the financial industry” and away from those of the public and investors. “A drastic change in approach is needed as we select new nominees to run this important agency,” they said.

The Project on Government Oversight, a nonpartisan government watchdog group, called on President Obama June 8 to replace White with someone who will provide “real accountability” and stop the “wide open” revolving door.

To contact the reporter on this story: Yin Wilczek in Washington at ywilczek@bna.com

To contact the editor responsible for this story: Ryan Tuck at rtuck@bna.com

The letter is available at http://op.bna.com/car.nsf/r?Open=ywik-9xell3.

The Citizens United opinion is available at http://www.bloomberglaw.com/public/document/Citizens_United_v_Federal_Election_Commission_130_S_Ct_876_175_L_.