Fredreka Schouten, USA TODAY
WASHINGTON - Campaign-finance activists and some of the nation's biggest institutional investors are trying to exert fresh pressure on the Securities and Exchange Commission to force public companies to disclose their political spending. If successful, the move would dramatically increase public information about the corporate money that now flows secretly into trade associations and other groups active in elections.
The renewed push comes as the Senate draws closer to a vote to install former federal prosecutor Mary Jo White as SEC chairwoman. Last month, the Senate Banking Committee voted 21-1 to approve her nomination and she is expected to win confirmation when a full Senate vote is held in the coming weeks.
At the same time, companies holding annual meetings this spring face 126 shareholder resolutions encouraging them to reveal more about their campaign contributions and lobbying activity or calling on them to curb political spending, according to Heidi Welsh, executive director of Sustainable Investments Institute. She tracks shareholder proposals on social and environmental issues. Many come from investor activist groups and labor unions.
That's up from 61 such resolutions in 2010 - the year the Supreme Court's Citizen United ruling helped pave the way for unlimited corporate spending by corporations and unions.
The disclosure push is part of the continuing battle over corporate political spending in the post-Citizens United era. Trade associations and other tax-exempt groups that are not required to disclose their donors poured more than $300 million into the 2012 election, according to the Center for Responsive Politics, which monitors money in elections.
Some institutional investors argue political spending poses financial risks for shareholders. Leading business groups say the disclosure is unnecessary and motivated by partisan politics.
"I want to make sure the monies for these public companies are being used to benefit shareholders and are not being used to benefit political campaigns that may be a waste of money," said North Carolina State Treasurer Janet Cowell, a Democrat who oversees an $80 billion pension fund for public workers. She is part of the Coalition for Accountability in Political Spending, a group of state treasurers and other public officials who support the SEC measure.
In March, two other Democrats in the coalition, New York State Comptroller Thomas DiNapoli and New York City public advocate Bill de Blasio, a trustee of the city's pension fund and a mayoral candidate, publicly called on White to take up the measure on her first day at the SEC. White's ascension would give Democratic appointees the majority on the five-member panel.
DiNapoli's office, which manages the state's $152.9 billion pension fund for public workers and is one of the country's largest institutional investors, has won agreements with 13 companies since 2011 to provide more information about their campaign giving.
In February, he reached a deal with wireless company Qualcomm Inc. to disclose information online about its campaign contributions and donations to trade groups. The agreement resolved a lawsuit DiNapoli had filed a month earlier, demanding to view the company's records. The pension fund owns 5.5 million Qualcomm shares, valued at $373 million, said DiNapoli spokesman Eric Sumberg.
Critics argue secret corporate money drowns out other voices in politics but have had no success winning congressional support for bills that would require more disclosure of political giving in federal races. Many now view regulatory action by the SEC as their best chance to learn more about the campaign activity of big political players, such as the U.S. Chamber of Commerce.
The disclosure proposal was first suggested in a petition to the SEC in 2011. But in December 2012, the agency put it on a list of potential rules it might consider, raising hopes among advocates that the agency would formally take up the issue and have the rule in place ahead of the 2014 midterm congressional elections. All told, a record 490,000 comments have been filed about the petition.
"We are at a tipping-point moment where the SEC has an opportunity to move this rule forward," said Lisa Gilbert of Public Citizen, one of the groups backing the SEC petition. "It's almost impossible to ignore the many investor constituencies that have weighed in and said this issue matters to them."
The U.S. Chamber has joined nearly 30 business groups in opposing the measure. The money spent by public companies "for political and trade association engagement is immaterial to the company's bottom line," chamber spokeswoman Blair Latoff Holmes said in a statement.
She said the support comes from partisan groups who "want to silence the business community by creating an atmosphere of intimidation under the cover of investor protection."
Stephen Bainbridge, who teaches corporate law at the UCLA, said companies also have legitimate business reasons to spend money in politics and don't want to be micromanaged by their investors.
"Why should shareholders have any more right to interfere with the board's decision to donate to a congressman who regulates widgets than they do to decide whether the company makes widgets in the first place," he said. "They are both business decisions that ought to be left up to the people who run the company."
It's not clear when - or whether -- the SEC will act. White, nominated by President Obama in January, has not publicly discussed the proposal. Through an aide, she declined a USA TODAY interview request this week, saying she is not granting interviews during the confirmation process.
At a recent Banking Committee hearing on her nomination, White said her top priorities would be implementing two new laws: the sweeping 2010 Dodd-Frank banking overhaul and legislation passed last year, known as the JOBS Act, that aimed to makes it easier for small start-ups to attract capital. On Dodd-Frank alone, the commission still has to take action on dozens of the law's directives.
A group of top House Republicans, including House Financial Services Committee Chairman Jeb Hensarling, R-Texas, wrote to the SEC last month, questioning why the agency was spending time on a the political-disclosure measure when it still needed to write rules implementing the JOBS Act.
"The staff is considering whether to make a recommendation" on the political spending petition, SEC spokesman John Nester said in a statement. He said the timing would be driven by the agency's "ongoing workload" on Dodd-Frank and the JOBS Act.
A growing number of companies is providing information on their election-related activity. Fifty-six of the companies in the Standard & Poor's 100, including Microsoft and Merck, have reached political disclosure and board-oversight agreements with the investor watchdog group, Center for Political Accountability.
The current crop of shareholder proposals faces an uncertain future.
Last week, Starbucks shareholders voted down a measure that would have barred the company from making political donations. In 2011, its CEO Howard Schultz led a highly publicized campaign to encourage other corporate executives to end their political giving until federal lawmakers took action to resolve the nation's debt.
Starbucks' board urged a "no" vote, saying it would hurt the company's ability to promote public policies "critical to delivering long-term value for our shareholders" and could put the coffee chain at a disadvantage with its politically active competitors.