A good rule of thumb in politics is that when someone says he wants to reform the system, he's often just trying to tilt it in his own direction. Somehow, "fairness" always has a way of delivering control to the groups the reformer prefers.
That is the case with the current push to get the Securities and Exchange Commission to require the disclosure of all corporate spending on political activity. This would primarily affect money given to groups that lobby on companies' behalf, such as the Chamber of Commerce and the National Association of Manufacturers.
Advocates frame this as an effort to provide openness and transparency. But the real motive here is to pressure corporations to reduce their political spending, in the process undermining a vital counterweight to left-wing environmental and labor groups.
This is the latest front in the Left's war against corporate involvement in politics and policy since the Supreme Court's Citizens United decision. This effort goes beyond that, though, because that case involved only election-related activity. The proposed SEC rule would involve lobbying and issue campaigns, as well.
The SEC push was initiated by a group of law professors and has since been joined by the usual group of liberal activist groups and Big Labor, in this case calling themselves the Corporate Reform Coalition. "The SEC has a responsibility to protect investors by regulating the securities markets to ensure that they have the information they need to make investment decisions," coalition member Public Citizen said in statement last week. "Shareholders have a right to know how the companies in their investment portfolio are spending their invested money."
Why should shareholders worry about this political giving? Public Citizen explains that it "may endanger the company's brand by embroiling it in hot button issues." Endanger it how? From Public Citizen and the other coalition members, who may try to punish their political spending with PR campaigns, boycotts and other pressure tactics. You know the routine -- you have a nice company here. Be a shame if something happened to it ...
In and of itself, disclosure sounds like a reasonable enough goal, until you realize that shareholders can already require this corporate disclosure by voting for it at shareholder meetings. But liberal groups haven't been able to find shareholders who are fuming over this lack of disclosure. After all, corporate political activity, for good or ill, is usually conducted to help increase the value of the corporations that shareholders own. In short, the activists are now trying to get the SEC to do their work for them.
Everybody affected by the government's rules and regulations has a right to make his or her voice heard and to do so without fear of reprisal. And, yes, that includes companies and the people who own them.
There is nothing wrong with companies making such information public -- and some of them do. But if shareholders don't care to do so, the SEC has no business forcing them to do it. If other shareholders want the information made public but find themselves in the minority, that's democracy. They can always sell their shares and invest in a company whose shareholders see it differently.